It’s feared families will turn to illegal sources of credit to stay afloat this winter (Picture: PA)
The government has admitted the cost of living squeeze hitting people this winter could trigger a feeding frenzy for loan sharks.
Illegal lenders may seek to cash in on an abundance of households struggling to make ends meet amid soaring inflation and stagnant wages.
The Treasury says it is looking at plans for safe forms of quick lending to cut the black market off at the source.
Britain is in the early stages of what could turn out to be the longest recession on record and prices keep going up.
It’s feared extra costs associated with Christmas could push families already short in cash into deeper debt.
Treasury minister Andrew Griffith told the House of Commons he wants to ‘prevent the demand for this product’ but admitted illegal lending could thrive in the coming months.
His comments came during an adjournment debate on the issue introduced by Conservative former minister Paul Maynard, who urged the government to do more to tackle the problem.
Treasury minister Andrew Griffith said the government is aware of a possible increase in illegal gambling (Picture: PA)
The Blackpool MP spoke about one of his constituents who thought was borrowing money from a friend but when she struggled to repay, ‘her lender made it her business to know when money went into her account so they could make her repay’.
He went on: ‘The more she repaid, the more she needed to borrow. But that wasn’t all. Michelle received threats.
‘Michelle had her window smashed, and as she tried to sleep at night she was shouted that, making her own home an unsafe place to stay.
‘It got so bad that Michelle and her two children were put into temporary housing. Why? Because she borrowed 50 quid.’
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Mr Maynard added: ‘I raise these issues not only because they are a blight on our communities, but because we’re facing an increase in the cost of living.’
In his response, Mr Griffith said: ‘I know that people across the United Kingdom are worried at this time about the cost of living, some of them are seeing their disposable incomes decrease or be squeezed.
‘We are fully alive to the fact that this may induce people to turn to illegal lenders.
‘To help the most vulnerable, we have announced £37 billion of support for cost of living this financial year and we’ve taken decisive action to support millions of households and businesses with rising energy costs this winter through the energy price guarantee and the energy bill relief scheme.’
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More people may be forced to turn to illegal lenders in order to make ends meet this winter.
