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Paul Blomfield MP and consumer watchdog boss Sue Lewis talk payday lenders

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Payday lenders such as Wonga, QuickQuid and Payday UK have been criticised by consumer groups, politicians and even the archbishop of Canterbury in recent weeks, over their excessive interest rates and ‘dubious’ business models which, according to some, make the poor poorer. Sue Lewis, head of a new consumer watchdog, and Labour MP Paul Blomfield, who recently launched a campaign against ‘rip-off’ lending, talk to Blue & Green Tomorrow about the industry.

The Independent reported on Saturday that Sue Lewis, the head of the Financial Services Consumer Panel, had described payday lenders as “a good product” and even suggested that she had compared taking out a payday loan to buying a meal on a credit card.

She ensures Blue & Green Tomorrow, however, that her comments were taken slightly out of context by the paper, and that in actual fact, what she was “defending” was a morally disciplined version of the payday lender.

Morals have played a big part in the payday lender debate, with figures such as the archbishop of Canterbury Justin Welby commenting on their treatment of the most vulnerable in society.

A survey by the Citizens’ Advice Bureau recently looked at complaints made to them by consumers and found that one in five cases were possibly fraudulent on behalf of the loan companies, more than a third involved cases where money was being taken from consumers’ accounts without authorisation, 12% amounted to harassment and 80% of borrowers were not made aware of how to complain. CAB concluded that 75% of cases could have cause for complaint.

It certainly appears to be the case that there is a moral void within many constituents of the payday loans industry. So much so that the regulator the Financial Conduct Authority (FCA) recently launched a consultation to gather a set of recommendations on how to regulate it.

Lewis welcomed the consultation, saying, “There are some awful practices and appalling cases that have been going off within this market and I welcome the FCA’s decision to go out to consultation on this and bring some of these companies under control.

“I do believe however, that the business model of ‘buy now, pay later’ can be really helpful to consumers, but it must be on the understanding from both sides that the amount can be easily repaid.

The Independent quoted Lewis as saying that she saw no problem with taking out a payday loan to fund a night out, a comment she admits was “probably silly”. However, she stresses the underlying meaning, saying, “If people are taking out a loan for a night out and they can afford to pay it back, then there is no problem with that. If someone takes out a loan fully aware of the rates to be paid back, that is their choice.”

But sadly, not all consumers are taking out loans to pay for a good night out. Paul Blomfield, Labour MP for Sheffield, launched the Charter to Stop the Payday Loan Rip-Off campaign in parliament a few weeks ago. He is also calling for tougher regulations on payday lenders.

But what are people spending the money they borrow from payday lenders on? Blomfield says, “All the evidence from Citizens’ Advice and from Which? shows that the people who are taking out these loans are people who are struggling to make ends meet, whose income doesn’t stretch for a month, who are taking them out for food, for energy bills or for domestic crises where they have no alternative.”

Lewis adds, “If people are borrowing to eat, that’s a social problem that no amount of regulation can fix. There is a wider problem here; we can fix the behaviours of the payday lenders, but then that doesn’t fix the problem that people can’t afford to meet the cost of living. More should be done in social policy to fix these serious problems.”

Coming on to the problem of advertising, Blomfield said the payday lenders were “luring” customers in where the loans aren’t within their interests.

What these companies are doing is targeting the poor and making them poorer through the charges and penalty payments”, he says.

His charter, which has the backing of more than 40 MPs from all parties in Westminster, aims to tackle these problems through tougher regulations. It also has the backing of CAB, Which? and Church Action on Poverty, to mention a few.

Blomfield says that the UK needs to learn from the tough regulations imposed on payday lenders by other developed countries that they operate in.

“We need to […] get the regulations right and ensure that there’s a tough regime that stops payday lenders from ripping people off.”

He also calls for robust affordability checks, so that consumers aren’t burdened with debt that the lenders know they’re not in a position to repay, adding, “We’ve got a once in a generation opportunity to get this right, we need to get the regulations right so that some of these practices can’t happen.”

Blomfield is the latest public figure to be critical of payday lenders. The archbishop of Canterbury, declared war on payday loan companies back in July, saying he would “compete [them] out of existence”. Labour MP Stella Creasy has also been vocal in the past, leading the Sharkstoppers campaign that is calling for tougher regulation.

Meanwhile, Labour leader Ed Miliband recently promised to force payday lenders to “pay back to communities”, saying he would increase taxes on such companies and give the proceeds to credit unions. These institutions have often been favoured by consumers as the lender of choice.

What is clear is that there is a clear moral disregard by some of the payday loans companies. What they are doing is profiting from poverty and increasing the burden on the poor in order to make as much money as possible.

With the right regulations, which should include stringent checks on potential customers, payday lenders can provide a useful tool, though. They can help increase competition within the credit markets, which is vital.

What they should not do however, is abuse their position of responsibility, as they have done in the past, and profit from the poor.

You can sign Paul Blomfield’s Charter to Stop the Payday Loan Rip-Off here.

Further reading:

Payday lenders face strong calls for tighter regulation

Credit unions: a growing movement

Research shows consumers prefer longer ‘payday’ loans from credit unions

‘We will compete you out of existence’, archbishop tells payday lenders

‘Out of control’ payday lenders accused of irresponsible practices

Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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