Financial Inclusion/Family Budgets

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 31st March 2014.

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Photo of Damian Hinds Damian Hinds Conservative, East Hampshire 2:30 pm, 31st March 2014

What steps his Department is taking to promote financial inclusion and to help families to budget.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

Through universal credit, the Department for Work and Pensions is investing £38 million in expanding credit union services to help more people to access affordable credit. A budgeting support package will be available to all those who need it through universal credit. At the same time, the Government are clamping down on loan sharks and doorstep lenders who have taken advantage of vulnerable people for too long.

Photo of Damian Hinds Damian Hinds Conservative, East Hampshire

In this 50th year of credit unions in Britain, may I commend the Secretary of State for what he continues to do to support the sector? Will he update the House on what is being done to tackle the excesses of the payday lenders he mentioned?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

The Financial Conduct Authority will limit continuous payment authorities, which allow payday lenders to take money out of people’s bank accounts, to two payments. The FCA will keep that under review. It is also preventing CPAs if a person would be left without money to buy essentials or for priority debts. We have already seen some payday lenders leave the market because it is being restricted in the right way. It is worth saying that before the last Government came to power, payday lending did not exist, but it spiralled to £1 billion-worth under them.

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries)

Has not the source of the pressure on family budgets been policies such as the freeze in child benefit and the cuts to tax credits, which have left families hundreds of pounds worse off?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

The biggest pressure on family budgets was the fact that far too many people lost their jobs as a result of the crash in the economy, in which GDP fell by 7.2%. Since then, we have reformed welfare. It is difficult when people are out of work, but we are doing huge amounts to get them back into work. As my hon. Friend the Minister of State has said, more people are in work, more women are in work and more young people are beginning to get into work, so we are getting more people into a position to look after themselves.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

Financial resilience for families in my constituency can be a real challenge. One of the biggest impacts on the family budget can be the loss of a loved one. Does the Secretary of State think it is now time to consider whether social fund funeral payments should be index linked to inflation to ensure that they keep pace with the cost of funerals?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I am certainly prepared to discuss the matter with my hon. Friend if he wants to come and see me about it. I keep that area of the social fund under review, as he knows. We localised about £200 million of the social fund to councils so that they could deal with the problems people face directly. We also kept the remaining money, so a total of about £1 billion goes out to all sorts of things, such as funeral payments, support for loans and support for people in hardship. This is a big push by the present Government to help people ahead of payday lenders.

Photo of Kate Green Kate Green Shadow Minister (Work and Pensions)

Last week the BBC reported that just 6% of households affected by the bedroom tax had managed to move. Also last week, a report from Real Life Reform showed that nearly eight out of 10 tenants hit by the bedroom tax were in debt, with borrowing increasing by an average of £52 each week and families increasingly relying on loan sharks. Rather than preaching about careful budgeting, why do Ministers not just scrap this hated and unworkable tax, which is sending people spiralling into debt?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

It is interesting that the Opposition and the hon. Lady take the view that people moving is a bad thing. Let me just tell her—[Interruption.] It is interesting that they say that, but 30,000-plus people—I will repeat that: 30,000 people—who were in overcrowded accommodation have now had the opportunity for the first time to move into houses where they are not overcrowded. The hon. Lady and the Opposition left us with a quarter of a million people in that position—250,000—so in 10 months over 10% have had the opportunity to move and we are saving over £1 million a day. I call that a success.