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The Queen’s Speech had nothing to say about debt but, unfortunately, debt continues to blight millions of our citizens, and the situation is getting worse. Nearly a third of people expect their finances to worsen in the next year, with only 14% expecting their situation to improve. The number of people saving is dropping, with a quarter of British adults having no savings at all. I am pleased that the Government have committed to breathing space, even though it will only come in in 2021, but what about the other plank in that strategy: statutory debt repayment plans? They will need primary legislation, and I was surprised to see no plan for that in the Queen’s Speech.
In the meantime, the Government can do much more to help those who have fallen into problem debt. We need increased funding for debt advice. I am not just talking about public money; I am talking about initiatives such as the Financial Conduct Authority’s levy on lenders and the “fair share” scheme. The banks are simply not paying enough, and the utility companies are not stepping up to the plate by joining the scheme. It is great to have policies for vulnerable customers and to try to prevent debt, but people will fall into debt because they lose their job or become sick. If organisations will not act voluntarily, there is a strong case to compel them, and Her Majesty’s Treasury should take note.
The Government also have an important role to play in reducing debt by overhauling their own debt collection practices, particularly the use of bailiffs. At the very least, we need an independent regulator of bailiffs and a commitment to use a fairer and more enlightened form of debt collection that puts the ability to pay first. The Government should also look at the policies that are helping to create debt in the first place, such as the freezing of benefits since April 2016 and the five-week wait for universal credit claims. Some 49% of benefit claimants affected by the freeze have struggled to meet essential costs, and many are using food banks. The Government should end the freeze and reduce the five-week wait by bringing forward the first non-repayable payment to no later than two weeks into a universal credit claim.
Another struggling group are the 1950s-born women. They did the right thing. They worked, they brought up their children, and many looked after elderly relatives, but they have been hit by successive rises to the pension age. The women who had just 18 months’ notice under the Pensions Act 2011 were particularly hard hit, so it is of no surprise that many of them tell me that they are falling into debt or using food banks. They are angry, and rightly so, that their great contribution has been of so little value to this Government. I commend St John Rigby College, Winstanley College and Wigan and Leigh College, which take students from across my constituency. They have struggled with underfunding for many years, but they continue to provide an excellent education for young people. It is time to raise the rate.
Older people, families and young people are all struggling. Few have any confidence that their finances will improve. There is much this Government could have done not just to improve the safety net when people need a little help but to ensure that the safety net is needed less and less.