The British government will today announce plans to deal with bad lending practices by financial institutions.

Officials said proposals to update the 1974 Consumer Credit Act would be outlined in a policy White Paper, which will be presented by the Trade and Industry Secretary, Ms Patricia Hewitt.

Among other measures, ministers have been investigating whether credit card lenders levy excessive fees and if their advertising makes clear the charges involved.

"Irresponsible lending by institutions is something that we are going to tackle in our paper that is published tomorrow," the UK Chancellor of the Exchequer, Mr Gordon Brown, said yesterday.

"The social effects of people overborrowing are something that we have got to take into account," he added.

In October, Mr Matt Barrett - chief executive of Europe's biggest credit card lender, Barclays - raised eyebrows by saying borrowing on credit cards was too costly.

He told a parliamentary select committee that he had advised his four young adult children to limit their credit card borrowing.

The credit card industry has been on the defensive as the government has pressed companies to give customers more information and lend responsibly - only one area where the banking sector has come under pressure. - Reuters