Gordon Brown yesterday criticised huge interest rate hikes by credit card firms, warning that they must behave �responsibly�.
Gordon Brown yesterday criticised huge interest rate hikes by credit card firms, warning that they must behave "responsibly".
The Prime Minister insisted it was unacceptable to saddle British customers with big increases as the recession bites. The government would act to establish "clear principles" to make sure companies treated people fairly, he added.
Mr Brown's comments came on a day when economic issues dominated the agenda of all three main Westminister parties. The Conservatives unveiled a £2.5bn tax break scheme to help companies hire the medium-term unemployed, while the Liberal Democrats echoed the Prime Minister's demand for international co-operation to solve the financial crisis.
Downing Street said Mr Brown had been alarmed by recent examples where credit rates had gone up by 10% overnight, and a store card which was charging 200%.
The intervention came after a study of 240 credit cards showed that, while the Bank of England had dramatically reduced its official bank rate from 5% in May to 3% this month, the cost of borrowing on cards had gone up.
The research by banking experts Defaqto showed that, since May, the average annual percentage rate on cards rose from 17.2% to 17.6%.
Speaking at his regular Downing Street press conference, Mr Brown said: "I think we have got to bring the credit card industry in to talk to them to join with us in establishing clear principles to apply to the costs people face on their existing debts.
"This new responsible approach to lending that I think that the credit card industry wants to support will help households through the difficult period that they have. I think by setting new rules and establishing clear practices, the public will be in a better position to look at the credit card industry as a whole."
The PM's spokesman said the industry had been summoned to the Department for Business, Enterprise and Regulatory Reform to discuss the issues, he added.
Mr Brown again dropped heavy hints yesterday that the government was set to cut taxes in a bid to kick-start the economy. He also insisted again that any reductions and investment packages should be co-ordinated globally to have the maximum impact, and called for a deal on liberalising world trade to be struck "within days".
Ahead of a crunch gathering of world leaders in Washington this weekend, the premier told journalists: "The most important thing I'm saying today is if we have a fiscal stimulus in Britain and it is not repeated in other countries then it will have far less effect and far less benefit than if it were done in every other major economy around the world."
David Cameron called for tax breaks for businesses that take on new workers from the dole queue, claiming the move could cut unemployment by 350,000 in a year.
The Tory leader set out proposals for companies to be given a £2500 National Insurance break for every job awarded to someone who has been unemployed for three months or more. While rejecting Mr Brown's plan to increase borrowing to stimulate the economy as "irresponsible", Mr Cameron said he would not simply allow joblessness to soar.
LibDem leader Nick Clegg warned that the world could only dig its way out of recession through international co-operation.
In a speech to the Royal Commonwealth Society, he welcomed the opportunity for wider co-operation offered by the election of Barack Obama as the next American president. "Global co-operation is the best - I believe the only - answer to these problems. The only way to dig our world back out of recession," he said.
