SNP Work and Pensions spokesman John Mason today slammed plans from the UK Government to charge up to 28% interest on loans from the Government's social fund.

The proposals put forward by the Department for Work and Pensions would see the currently interest free loans from the Social Fund, which is available to support less well off households with emergency costs such as home repairs, channelled through credit unions at MAXIMUM lending rates.

John Mason MP for Glasgow East said: "This is a step too far from loan shark Labour.

"If the government is going to charge 28% interest those in need would be just as well getting a credit card.

"The social fund is a vital service for people on low incomes and benefits including many in my constituency.

"With rates at this level Brown is behaving as badly as the banks he has bought.

"To make it worse this report even acknowledges the importance of the social fund in protecting people from loan sharks - before going on to become one itself.

"When interest rates are down to 2% this is an outrageous proposal from the Government and no amount of backtracking will change it.

"Labour should be ashamed of themselves for trying to draw the good work credit unions do into their loan shark scam."

Notes:

1. The impact assessment of Purnell's proposals states; "Interest would be charged in return for these services but this would be at affordable rates compared to those charged by commercial lenders in the same market. We propose to set it at the maximum charged by Credit Unions of 2% per month (26.8% APR)."

2.The average Store Card Lending rate is between 25 and 30%

3. Credit Care rates have an average of 17.5%

4. The UK is the only EU country without an interest rate cap on loans, Austria, France, Germany, Italy and Switzerland all have caps at 22% or less.