Government white paper outlines loan and debt proposals

The UK government has announced a raft of new measures designed to help consumers avoid the need for debt help during the current financial difficulties.

A white paper published on Thursday outlined a range of proposals to help promote responsible borrowing and lending, including plans to crack down on persistent rogue traders.

The government will insist that lenders explain their products to consumers and carry out a full check on their credit history to ensure people can exercise greater control over their finances.

Ministers also plan to ban unsolicited credit card cheques, which often tempt consumers to borrow money they cannot afford.

Business secretary Lord Mandelson said: "We're already providing targeted help to protect people from falling into debt and to support those who get into difficulty.

"But we need to do more. Our aim is to help consumers make better-informed borrowing decisions."

The proposals have since been welcomed by price comparison site moneysupermarket.com, although it pointed out that such measures are unlikely to help those who are already heavily burdened by debt.

Nevertheless, the website said the plans will "bode well for future borrowers".

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