Stella Creasy sees today’s announcement that the government does want to cap the cost of payday loan credit as a recognition that Labour was right to campaign on this issue and that consumers are suffering as a result of the current arrangements. But listen again to George Osborne’s Today interview and you’ll note another recognition: that Ed Miliband and colleagues are enjoying some success when they talk about markets not working for consumers.
The Chancellor insisted that this new cap on the interest rates, penalties and arrangement fees for companies such as Wonga did not contradict Conservative free market philosophy, but repeatedly referred to a consensus amount free market thinkers that regulation was needed to make markets work for people. He told Today that ‘people who believe in the free market like myself want that free market to be properly regulated’.
Never mind the evidence that the Treasury says changed ministers’ minds sufficiently for them to instruct the Financial Conduct Authority to cap the charges: what is most interesting here is the rhetoric. Lynton Crosby may be telling political cabinet not to talk so much about the cost of living, even though they are panicked by the apparent success Labour is enjoying on this issue, but Osborne is accepting here that not only is Labour appearing to enjoy success in talking about the cost of living, but it is enjoying success in talking about markets and whether they work for consumers. The big overarching themes of Ed Miliband’s attack strategy at the moment are making markets work for ordinary people (which includes work on the cost of living) and decency in politics (which currently involves complaining that the Tories are doing the sort of mud-slinging about the Co-op that Labour would leap at the chance to do were this latest toxic banker in the Conservative fold).
Some Conservatives will be horrified that Osborne is aping the language of his rivals on markets, as it could suggest that Labour has the greater wisdom on this issue which the Tories will have to imitate. But there is clearly a desire on the Chancellor’s part to argue that concern about the consumer isn’t a Labour-only trait.
P.S. There is great excitement about why the Treasury has decided to do this now. But one very simple explanation is that payday loans have only in the past few weeks moved from the Business department to the Treasury’s remit. This is still rather amusing as they were the domain of Lib Dems Jo Swinson and Vince Cable and now a Conservative chancellor is slapping them with more regulation. But the change of policy has as much to do with administration rather than a Damascene conversion forced by Labour.