Legal Advice (Debt)

Oral Answers to Questions — Lord Chancellor's Department – in the House of Commons at 11:30 am on 20th May 2003.

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Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden 11:30 am, 20th May 2003

What steps the Lord Chancellor is taking to increase the availability of legal advice on debt.

Photo of Rosie Winterton Rosie Winterton Parliamentary Secretary (Lord Chancellor's Department)

Assisting vulnerable individuals and families on debt issues is one of the key priorities for the community legal service. Through the work of more than 200 community legal service partnerships and with the support of initiatives such as the partnership innovation budget and the Legal Services Commission's methods of delivery pilots, we are devising new ways of delivering front-line debt advice services to local communities.

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden

I thank my hon. Friend for her answer. Does she agree that some of the most intractable problems that hon. Members meet at our advice surgeries relate to debt owed by severely disadvantaged people? Such debt is often multiple and is owed by people who not only have limited incomes, but do not have the access to mainstream credit facilities that many of us enjoy. Does my hon. Friend agree that there is a serious role for organisations that form part of the legal service partnerships, such as the Wandsworth and Merton law centre and the Merton money advice service, to which I often refer people? Those bodies need to be well known and easily accessible, and people need to have confidence in them. Only too often, people's response to debt problems is to stick their heads in the sand and not deal with them. What are the Government doing to involve such organisations in improving the services that are provided?

Photo of Rosie Winterton Rosie Winterton Parliamentary Secretary (Lord Chancellor's Department)

My hon. Friend is absolutely right to draw attention to that issue. In particular, I wish to praise the work of the Wandsworth and Merton law centre, not least because of the presence of Bob Nightingale, who chairs the Law Centres Federation. My Department produced a pamphlet with the Law Centres Federation that highlighted not only debt problems but the fact that people who have such problems may also face housing and social security problems—a spiral of decline that can lead to social exclusion. The way of getting out of that is to ensure that good legal services are available. Through the community legal service partnerships, we want to work with organisations such as law centres and others to ensure that we improve the availability of that advice.

Photo of John Bercow John Bercow Conservative, Buckingham

Given that in the last Parliament, the Government legislated to establish the principle of the levy of interest in cases of late payment of commercial debt and that, periodically, large numbers of citizens in this country fall into debt precisely because of late payment by Government agencies of benefits or other entitlements, does the hon. Lady concede that, in principle, there is a compelling case for establishing, as a matter of course, that when the Government have erred and are late in paying people their dues, they should pay them not merely the sum, but interest on top of it?

Photo of Rosie Winterton Rosie Winterton Parliamentary Secretary (Lord Chancellor's Department)

That matter has been looked into not only by this Government but by previous Governments. I rather think that responsibility for it lies with the Department of Trade and Industry, but I shall certainly ensure that the hon. Gentleman's comments are passed on.

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

Law centres and citizens advice bureaux play a vital role in assisting people who get into debt and face financial exclusion, yet for the first quarter of this year, I spent much of my time fending off the possible closure of my two law centres. Only with the assistance of the Association of London Government were we able to pull those centres back from the brink. Even so, the Association of London Government does not have sufficient funds to ensure that the whole of London has adequate financial advice services.

Has my hon. Friend discussed with the Office of the Deputy Prime Minister whether the "futurebuilders" programme offers us an opportunity to resource voluntary organisations and law centres in providing financial advice and debt counselling across London and the country as a whole?

Photo of Rosie Winterton Rosie Winterton Parliamentary Secretary (Lord Chancellor's Department)

I am aware of the work that my hon. Friend has put in on behalf of her local law centres, which she has raised with me before. Overall, contract funding for law centres from the Legal Services Commission has risen. She makes an important point about "futurebuilders". Some £125 million is available over the next three years to assist the voluntary and community sector in improving service delivery. Most of that money is for capital expenditure, but in view of my hon. Friend's comments I shall consider whether there are ways in which we can assist law centres, and let her know the outcome.