Financial Times FT.com

MPs condemn plan for loans to poor

By Jean Eaglesham, Chief Political Correspondent

Published: December 21 2008 22:45 | Last updated: December 21 2008 22:45

Ministers were forced into an embarrassing U-turn on Sunday after contentious proposals to charge interest on emergency government loans to poor people provoked a political backlash.

The government later blamed a poorly drafted consultation paper for “confusion” over the plans. But Labour’s embarrassment was compounded by the fact that James Purnell, the work and pensions secretary, signed the foreword to the consultation document.

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