Brown urges card firms to clean up
Prime Minister Gordon Brown has announced plans to make credit and store card operators "clean up their acts" with a set of consumer protection measures to be unveiled over the coming week.
Mr Brown said that "sharp practices" like increasing interest rates on existing debts without explanation, issuing unsolicited credit card cheques and relaxing credit limits without being asked should end.
His comments came in a podcast, released on the 10 Downing Street website and YouTube on the 80th anniversary of the Wall Street Crash, in which he pledged to reform the financial sector and restore growth in the UK economy by the end of the year.
Following Friday's surprise announcement that the British economy shrank by 0.4% in the third quarter of 2009 and was officially in the longest recession since records began, Mr Brown warned it would be "suicidal" to put recovery at risk by cutting spending now, as Conservatives advocate.
"Although there are signs that confidence is beginning to return in some areas, we need to be cautious," he said.
"Now, more than ever, is the time for steady and clear policies. That is why it would be suicidal to put recovery at risk by suddenly cutting off the funding and investment that is supporting young people, families and businesses through the most challenging times in a generation."
Mr Brown insisted that "the battle to stop this global downturn becoming a second Great Depression is being won" as a result of countries being willing to co-operate internationally on co-ordinated interventions.
He said he would press forward with this international co-operation at Thursday's European Council summit in Brussels, when EU leaders "need to plan to further mobilise our resources in support of businesses and jobs".
Discussing the action he is taking on credit arrangements, Mr Brown said: "We are announcing measures to make the credit and store card companies clean up their act to get you a fairer deal. Sharp practices by lenders - such as hiking interest rates on existing debts without explanation, sending out unsolicited credit card cheques and raising credit card limits without being asked - these sharp practices should end."
Mr Brown also promised further action on excessive bonuses in the City. "We are also continuing to act on unfair and excessive bonuses being paid in the banking system that your money helped to save," he said. "We must bring financial markets into closer alignment with the values that everybody holds: hard work, responsibility, integrity and fairness. My pledge to you is to make reform of the financial sector a reality and to see Britain's economy return to growth by the turn of the year."
