If he will make a statement on the impact on the economy of the level of personal bankruptcies and home repossessions.

The Treasury continually monitors the levels of household liabilities and assets, and their implications for the wider economy are examined as part of the pre-Budget report and Budget forecasting.

Hard-working families are facing a three-pronged attack of rising interest rates, rising debt and rising unemployment. That will feed through into greater home repossessions and personal bankruptcies, with a severe knock-on effect on the economy. Does the Minister agree that it is time to provide better access to free financial advice, time for health warnings on credit promotions, and time to show greater flexibility in the social fund at times of economic downturn?

I do not share the hon. Gentleman's downbeat assessment of the economy. At the moment, the number of home repossessions is half what we inherited in 1997 and only a fifth of the 1991 rate. We have had a decade of stability, and strong and stable economic growth; net household wealth has actually risen in real terms by 65 per cent., so I do not recognise the rather gloomy place that the hon. Gentleman seems to inhabit.

Perhaps the underlying cause of house repossessions and bankruptcy is the level of personal indebtedness, so it is important to educate people about its effects, particularly if they are over-borrowing in relation to their income. Is it not sometimes too easy for people to become bankrupt, as they do not always realise the implications for future borrowing and for their future lives more widely?

I thank my hon. Friend for that question. We have set aside £120 million for the fund on financial inclusion and education, which seeks to teach some of those lessons and to counter some of the advertising that drives small numbers of people into over-indebtedness. That is one clear aim of the Government's financial inclusion policy.

The hon. Lady will know that UK interest rates are now the highest in the G7 and are perhaps likely to rise higher. To what extent does she believe that the record levels of insolvency are at least in part due to that cause?

The hon. Gentleman is right in that interest rates have risen slightly over the recent period—[Hon. Members: "Slightly?"]—but they are still on average only half what they were during the Tories' period in office. We need to remember that we have had a decade of stability with growth in incomes, employment and wealth. The hon. Gentleman is scaremongering about the current situation.

I welcome my hon. Friend to her new position and acknowledge her remarks about irresponsible advertising. More particularly, is she concerned about celebrities who endorse products that are totally unsuitable for the people at whom the advertising is directed, and does she have any plans to tackle the problem?

My hon. Friend makes an extremely good point about advertising in general, and the Financial Services Authority has been looking into it, particularly in respect of misleading advertisements, of which we have seen many examples of late. It is important that the industry adhere more effectively to the voluntary codes presently in place. If there is no sign of improvement, we will certainly look into what more the Government can do through regulation.

I congratulate the hon. Lady on her move into the Treasury team. Does she agree, however, that our country faces a growing crisis of young people in debt? The latest figures from the Insolvency Service for the first quarter of 2007 show a 24 per cent. increase in personal bankruptcy on the same period last year. In my Constituency, the citizens advice bureau tells me that people in debt in their 20s are now the largest group with whom it deals. Does she not accept that in taking away the 10 per cent. tax rate at the last Budget, and disproportionately taxing young people more, the Government are now part of those young people's problems in trying to service debt? Does not she agree that the Government should look closely at the matter, and decide on severe action, instead of taxing those young people more?

I thank the hon. Lady for the welcome to me, and return that welcome to her on her first Front-Bench appearance. I hope that she will have many more such appearances, and that she enjoys her time on the front bench— [Interruption.] On the Opposition Front Bench, that is.

With regard to young people in debt, financial education is an issue, and that is why recent announcements have been made about changing the curriculum. We must ensure that the £120 million put aside in the financial inclusion fund is spent on increasing the sophistication of financial understanding to match the ongoing sophistication in the financial services industry and the techniques sometimes used by the advertising industry to tempt people into debt.

The hon. Lady must remember that although debt levels are higher, asset levels are also higher, because we have had a stable economy. Therefore, the £1 trillion in personal debt is set against £7 trillion in assets. As the economy grows, asset values grow. Because we have low inflation—at half the rate that the hon. Lady's party managed when it was in office—people can sensibly borrow more money than before. That is what is happening.

My hon. Friend will be well aware of the worrying increase in the use of individual voluntary arrangements. Those are totally inappropriate for many people who find themselves in financial difficulties. What more can be done, either directly or through the regulator—the Financial Services Authority—to make sure that those arrangements are used only when appropriate?

My hon. Friend is right to say that it is extremely important for the new IVAs to be used in the appropriate way. They were introduced to ensure that bankruptcy was not the only option, and they can be appropriate in certain circumstances. It is important that the Insolvency Service, the financial services industry and our education system teach people how to use the instruments introduced to deal with debt in a way appropriate for them. It is important that people do not rush into uninformed decisions.