Government refuses loans to low-income families in our region- Liberal Democrats

9.14.30am GMT Fri 30th Jan 2009

43,670 pensioners and families in the East Midlands had their application for a crisis loan turned down by the Government last year, figures highlighted by the Liberal Democrats have revealed.

Applications for the loans, aimed at low-income families and pensioners unable to get credit elsewhere, rose by more than 27% last year to 112,390. The figures come at a time when the Government is encouraging banks to increase lending.

Michael Mullaney, Liberal Democrat Parliamentary Spokesman for Bosworth said, "People who apply for crisis loans are desperate and have nowhere else to turn, yet too often they get turned away when they should be getting help.

"It is very worrying that with the recession hitting our area hard, even more people will turn to the Government for help. Yet the evidence for the past year is that more and more people will be turned away by Government run Job Centre Plus.

"At a time when the Government is demanding that the banks lend more, here we have the Government itself doing the opposite.

"The Government has got to practice what it preaches to the banks and make more cash available to families through these loans."

ENDS

Notes to Editors

1. Crisis Loans are paid by the Social Fund to help people who are unable to get credit elsewhere meet expenses in an emergency or because of a disaster.

2. Figures released by DWP show that the average crisis loan was £71.89 in 07/08 and £76.89 in 06/07.