Tory MP tells of student debt woe

Andrew Percy, the Conservative MP for Brigg and Goole, said he “bristles” at stereotypes of the supposedly overprivileged members of his party while he continues to pay off the enormous credit card debts he accrued at York University in the 1990s.

Mr Percy, 36, was speaking in a Commons debate on the debt problems facing many people in modern Britain, and the dangers posed by the high-interest payday lenders appearing on high streets in growing numbers.

“I bristle when I am told, ‘You’re a millionaire Tory MP who doesn’t understand real life’,” Mr Percy said. “That happens too often – but it was not the case with me. I struggled with high levels of debt that I am still dealing with.”

Mr Percy, a former history teacher and local councillor in East Yorkshire, told MPs he racked up tens of thousands of pounds of credit card debt while funding himself through university in his late teens and early 20s.

“I did not realise at the time that I would be one of those who might struggle,” he said. “I did not realise that it had to be paid back, and that the interest would be huge.

“The minimum payments are often less than the interest accrual every month... I’m still dealing with the debt I encountered getting myself through university.”

The MP, who now earns a backbencher’s £66,000-a-year salary, said he is fortunate enough to be in a situation where he can “get to grips” with his repayments.

“I am lucky,” he said. “But others will be condemned by their debt for very many years.”

The Government announced in November that it will cap the cost of payday lending, following mounting concern about the impact firms are having on deprived areas. But Mr Percy said it was equally important to educate children about the cost of high-interest loans, both on personal finances and on real lives.

“Until we get to the bottom not just of how to work this into the curriculum, but of how to demonstrate the impact on people’s lives in the longer term, we will not make real progress,” he said.

Mr Percy said it was time for British society to address what he called the “‘we want things today’ culture” which has pervaded the country over recent times.

“My grandparents never had any debt in their entire lives,” he said. “They saved for everything, and they tried to embed that idea in their grandchildren. It failed spectacularly in my case – I listened to them on many things, but clearly not on debt.”

Paul Blomfield, the Labour MP for Sheffield Central, who is attempting to push a private member’s Bill regulating payday lending through Parliament, said the Government’s proposed reforms were not sufficient to help people trapped in spiralling debt cycles.

“I thought I would share the case of one Sheffield woman,” he told MPs. “She has asked to be kept anonymous, so let us call her Susan. Her case is all too typical.

“She was struggling to keep up with bills and to make ends meet. She took out a payday loan to help tide her over, but still found she was short at the end of the month.

“By rolling over the initial loan and taking out new ones to pay off that debt, she found herself in a spiral of increasing debt.”

Mr Blomfield said the Government’s move to cap interest rates and clamp down on advertising do not got far enough.

But Treasury Minister Sajid Javid insisted banning “irresponsible” advertising is key to ensuring people are not exploited or misled.

“It is essential that all payday loan advertising is responsible and is not designed to target children,” he said.