Why students need to join the fight for fair credit

By Callum Munro and Kate Talbot

In recent months, payday lending has gone from being a background story to a front line political issue. At Labour Party conference, Rachel Reeves MP (in her old role as Shadow Chief Secretary to the Treasury) committed the Labour Party to capping the cost of credit. Stella Creasy has been made Shadow Consumer Rights Minister, in order that she can continue her tireless campaigning with the weight of a ministerial brief. And the fact the campaign has developed to promote access to fair credit hasn’t gone unnoticed: Ed Miliband announced his planned levy on payday lenders while joining his local credit union. However, certain groups of missing from this conversation: they are at best underrepresented, at worst, ignored. Students are one such group.

Labour Students from across the UK voted for this campaign to be the 2013-2014 priority, because students on so many different campuses were saying that they saw payday lending was becoming a problem for students. The excessive concentration on rising tuition fees is of course important: however it hides the fact that the real and immediate problem for many students is not high fees, but rather the cost of day to day living. Like everyone else in Britain, the cost of rent and food is rising much faster than inflation, and much faster than student loans. What we aren’t trying to do is demonise those who need access to short term credit: many of us have been in that position. What we are trying to do is make sure that there are fair and regulated options, where it is impossible to end up owing ten times what you originally borrowed.

It is exciting that this is part of a growing movement which is being recognised by those at the very top of the party: recent announcements from the Labour leadership are hugely welcomed, but with the caveat that there is always more to do.  A levy on payday lenders to fund credit unions is fantastic, and more than doubles the current government’s offer of support. But in order to offer a real alternative to a multibillion pound market we need more than a £13 million tax. Banning payday lending adverts from children’s TV shows is an interesting and important step: there really is a huge issue with normalising this type of borrowing, and using puppets and cartoon characters to promote it as harmless and even fun.

We are seeing this normalisation being aimed at students too: only last year Wonga was forced to remove articles from its website which claimed that while your student loan is “intended for living and education costs, it’s all too easy to fritter away the money once you have it. Wonga encourages responsible borrowing because, depending on your trust rating, you can borrow as little as £1 up to £1000, as long as you can repay it within a month.” It also encouraged students to use Wonga to pay for holidays abroad: “When your mates tell you about finding a deal on plane tickets to the Canary Islands, you’ve got some options. Maybe you don’t have the money to pay for the whole thing now, but you will when you get your wages at the end of the week. Enter Wonga!” Although this more blatant targeting has been removed, students are still encouraged to take out payday loans: indeed there are some companies set up specifically for students to use.

For Callum Munro, National Chair of Labour Students, working with Movement for Change is the most natural thing Labour Students could do. ‘The training and support in community organising they provide is incredible and we are very proud to have such a relationship.’ There are shared values, shared missions and shared successes. You can read about Finn, Erin, and Connor, as a few examples of those who have benefitted from the partnership. Just last week we were celebrating 153 workers at the University of Dundee receiving the Living Wage, after a long and challenging – but also fun – campaign.

The issue is incredibly important, but so too is the wider leadership development and power that can be built in the student movement. Often, those involved in student politics are dismissed as amateurish and ineffective: this is not true of the ambitions of Labour Students. There is huge potential for the campus credit campaign: talent and enthusiasm combined with training and development from Movement for Change means a successful and effective year lies ahead.

Callum Munro is National Chair of Labour Students. Kate Talbot is a Community Organiser at Movement for Change

This weekend, Labour Students will launch their Campus Credit campaign at their political weekend in Manchester where 120 students from across the country will come together to plan their campaign for the year ahead. Labour Students are working in partnership with Movement for Change, who will help to train and develop students at campuses across the UK.