We need a free market in credit cards – just like everything else

There are some commercial decisions that are intrinsically difficult to defend. The plot of the last Captain America film, for example. Ryanair’s charges for bags that are slightly too big. The price of the new iPhone, and just about anything done by the lovable folks over at Foxtons. Credit cards changes come very close to that category. Almost but not quite. In fact, if the Labour party gets its way, and imposes controls on them, we may find that out to our cost.

In what will probably be the first of a whole week of populist measures, the shadow chancellor John McDonnell today announced that, if in office, he would impose limits on what could be charged on cards. No one would have to pay back more than they originally borrowed. In effect, the rate of interest would be controlled, a move which, according the Labour party, would help those trapped in persistent debt.