Lord Stevenson of Balmacara:

Moved by Lord Stevenson of Balmacara

11: Clause 34, page 40, line 30, at end insert—“(4B) The regulations may also include the following as part of the scheme—(a) provision to ensure that debt advisers that are responsible for the delivery of debt advice in support of a plan for the repayment of some, or all, of an individual’s debts have been properly authorised by the FCA;(b) provision to ensure that when an individual is deemed suitable to enter into a plan for the repayment of some or all of their outstanding debts, the organisation holding funds on behalf of the individual and making the agreed repayments to creditors must be a charity or other not-for-profit organisation properly authorised by the FCA;(c) provision to ensure that the aggregate provision payable in respect of the costs of operating the repayment plan, other repayment plans, the debt respite scheme and the wider debt advice services being provided meets the reasonable annual costs of the organisations involved; (d) provision that the debts that are dealt with under a plan for repayment include those owed to Her Majesty’s Government and those owed to other UK public bodies and service providers;(e) provision that when an individual has entered into a plan for the repayment of some or all of their outstanding debts, they will receive protection from any warrant or action from bailiffs appointed by a UK court.”Member’s explanatory statementThis Amendment allows further probing of the Government's plans to establish the Statutory Debt Management Scheme.

My Lords, I declare an interest as a former chair of StepChange, the debt charity. Amendment 11 has exactly the same wording as the amendment to Clause 34 that I moved in Committee. The purpose is to give the Government a further opportunity to set out in more detail their plans for the introduction of the statutory debt management plans in England and Wales—not, sadly, in Northern Ireland, yet—to complement that which is already working as a very successful scheme in Scotland. We are getting there by patchwork, even if we are unable to do so from top down, as we might wish.

I am very grateful to the Minister and officials for facilitating discussions about the detailed SDMP proposals, and for his very full letter of yesterday, which sets out the Government’s position very clearly. It is a very good letter to have, and we got a lot of reassurance from it.

I also touch on Amendment 12 in the names of the noble Baroness, Lady Bennett of Manor Castle, and the right reverend Prelate the Bishop of St Albans, which introduces an interesting and important aspect of debt management plans—a bit of detail, in fact. It is about the concept of negotiated debt settlements on behalf of debtors, which are already part of the current debt management plan process in operation in Scotland, and in England in an informal way—not statutorily backed. A realistic quantum for the outstanding debt is clearly a key metric when plans have been drawn up for what should constitute an affordable repayment schedule, so it makes sense to both sides if the final figures reduce the outstanding debt in as short a time as possible. I look forward to hearing further from the noble Baroness and the right reverend Prelate, if he is able to join us, about how they see this working in practice. I think they are probably more suited to regulatory action than statutory action in the Bill, but we will wait to see how the case comes out when it is argued.

Yesterday’s letter from the noble Lord, Lord True, is extremely helpful, and I thank him for it. In it, he explains that secondary legislation will spell out matters of detailed policy and implementation for the SDRP and confirms that, as these will be introduced by the affirmative resolution procedure, Parliament will be given adequate opportunity to debate and scrutinise the regulations. I welcome that. In Committee, my main concern was timing, and the letter says that the Treasury intends to consult on the draft regulations as soon as possible after the Bill receives Royal Assent. We will keep an eye out for them and hope that it will not be too late after Royal Assent comes through.

On implementation, the letter makes it clear that, understandably, there needs to be time for IT changes and preparing the scheme guidance. It suggests that 18 months would give adequate time for stakeholders to prepare after regulations have been laid. I have no reason to question that timing but, given that the letter goes on to suggest that the SDRP may not actually be in use until the end of 2024, it seems to me that we are talking about a delay of perhaps three and a half years once work has started. I wonder whether the Government might want to look at that timetable again. We need to get this right, clearly, and time must be given for that, but Ministers are aware that the SDMP is complementary to the debt relief scheme, which we were just talking about in relation to Northern Ireland, which is due to operate on a much tighter timetable—to be introduced, I think the Minister said, in early May. To be honest, I do not think I would be alone if I said that the Minister’s hope, as expressed in his letter, that this timetable reassures noble Lords that the Government’s work will proceed at pace is not altogether convincing. Perhaps the Minister will respond at the end of the debate.

The letter also contains some very helpful reassurance on other policy matters. Debtors are to be protected from most creditor enforcement during an SDRP, including enforcement by bailiffs. That is a great relief to hear. We will come back to that in a later amendment. It might be helpful if the Government could clarify what creditor enforcement would not be protected under an SDRP. That would be useful to have on record. The letter confirms that the widest range of personal and business debt should be eligible for inclusion in an SDRP. It is good to have that confirmation and to know that, in particular, that includes local government as well as Crown debts. Again, it is useful to have that clarification on the record.

Only those with appropriate authorisations from the FCA will be able to offer SDRPs, unless they are a local authority that offers money advice and is therefore exempt from FCA authorisation. Again, that clarification is helpful and welcome. Debt advice providers will not be able to charge a fee to debtors for accessing an SDRP. Again, that clarification is extremely welcome.

Finally, the letter covers the wider question of funding for the SDRP. I will not go into the detail here but I want to make it clear that we welcome the paragraph of reassurance that funding will be provided separately for free debt advice, which will go a long way towards reassuring those institutions that have used the fair-share funding formula to invest heavily in fintech and telephone services, which allows them to scale up the debt advice available free at point of use. Particularly during the pandemic, that is welcome news and the rock on which the plans for the debt respite scheme and SDRPs rest.

I and others in the debate would be happy to continue discussions on these issues with the Minister in due course, as he suggested in his letter. However, we wanted to put on record that we welcome what he said and the willingness of Ministers to engage. I look forward to further discussions with them in due course. I beg to move.

My Lords, the next Speaker is the noble Baroness, Lady Bennett. The speaker after her, the noble Baroness, Lady Morgan, has withdrawn, so the speaker after the noble Baroness, Lady Bennett, will be the noble Lord, Lord Davies.

My Lords, it is a pleasure to follow the noble Lord, Lord Stevenson of Balmacara, and I offer my thanks for his support for the concept of Amendment 12, to which I shall speak. It appears in my name and is kindly supported by the noble Lord, Lord Sikka, and the right reverend Prelate the Bishop of St Albans.

Amendment 12 seeks to secure a discounting of debt for people entering proposed statutory debt repayment plans—something that the noble Lord, Lord Stevenson, noted has already occurred in Scotland. I set out in Committee that that is a large group of people with incomes above those eligible for debt relief orders, but with assets and income generally below those covered by voluntary agreements on bankruptcy. All those other agreements operate in ways that can result in debt being cleared in a relatively short period, much shorter than those to be covered by statutory debt repayment plans. I will not repeat all that detail again.

However, this amendment represents a development of an amendment presented in Committee to secure a fair debt write-down in respect of debts sold on the secondary market. For that initial amendment and this amended one, I pay tribute to the large amount of work done by the Centre for Responsible Credit, from which noble Lords will have received a briefing. While a strong argument exists to support this proposal, entirely legitimate concerns were raised in the debate that the impact of such a move on the operation of the secondary market would need to be properly considered. The noble Lord, Lord True, also raised a concern about the need for equitable treatment of debtors in the scheme. Taking those concerns on board, this new amendment, rather than being prescriptive, is permissive in nature and seeks to ensure that discounts on debt are secured, where appropriate, with the full agreement of creditors.

Amendment 12 recognises that many creditors listed on debt repayment plans, regardless of whether the debt originated with them or they bought it on the secondary market, will often prefer to receive a lump sum as full and final payment as opposed to low levels of instalments spread out over many years. As a result, many creditors already offer a significant discount on the total level of debt if a lump-sum settlement can be made. While the StepChange debt charity has a dedicated team to provide advice to debtors concerning possible full and final settlements, not all debt management plan providers do so. There arises a potential conflict of interest, as SDRP providers are likely to be reimbursed on a percentage basis of the total debt collected. Securing discounts for big debtors would reduce their revenues.

This amendment would therefore ensure that the Government are provided with a power to instruct SDRP providers, where appropriate, to enter into debt settlement negotiations on behalf of debtors entering the scheme. Hopefully this is not needed, but it is important that such a power exists.

In addition, it ought to be possible for SDRP providers to go further. With appropriate funding and regulation, business models could be encouraged that would allow SDRP providers to themselves buy out, and therefore discount, debts registered on their plans. For example, in recent months we have seen instances of debt of £10,000 being discounted by as much as 40% in return for full and final settlement. Enabling such debts to be bought out and subsequently collected by SDRP providers would mean the debtor would have to repay only £6,900, even after taking into account a 15% fee for the provider. It should be possible to achieve a result that is beneficial to creditor and debtor alike. I stress that building this negotiated settlement approach into the SDRP is likely to be welcomed by creditors, who in many cases are already prepared to discount heavily for lump sums in full and final settlement.

It is not my intention to push this amendment to a vote at this stage, but I seek a commitment from the Minister to continue to explore and work on this issue. I hope he can commit to a meeting between the department and interested noble Lords to see how we can take this forward, possibly in regulation.

My Lords, I speak in support of Amendments 11 and 12. I do not intend to delay us particularly long at this time of night, but I want to take the opportunity to pursue an issue.

My involvement in the Financial Services Bill has been a learning experience for me, as a new Member, in the way in which we are able to progress issues through the course of a Bill and the opportunities arising at different stages to make points and develop what it is possible to achieve, as opposed to what we would like in a perfect world. I have made plain my support for a more fundamental debt jubilee, but that is clearly a discussion—a fight—for another day. The amendments before us today clearly provide a useful step forward—a small step, but one that is still worth while.

I want to say a word on behalf of the debtors, those people who have taken on debts for all sorts of reasons—some good, some bad. You cannot just look at the debtors in this situation and say, “That is where the problem arose.” Quite clearly, bad debts are part of the business plan of people who lend money. We have learnt to an extent during these debates that there are issues in how you develop a plan so that, when debts are discounted, it is not just commercial organisations that benefit and there is also the opportunity for those who have unwisely or mistakenly taken on debts to gain some advantage from the discounting of debts. That is really what we are trying to work towards here.

I support these amendments and hope the Government will be able to take on board the issues raised. The underlying issue—this is the point I have pursued before—is that there is a public interest in dealing with debt and relieving people of the debts they have taken on; it does not help just the individuals concerned. Lowering the level of debt and removing onerous debts help us all generally, and particularly at the moment when we are looking for an economic revival. I hope the Government take on board the ideas behind these amendments and work towards a scheme that helps not just the debtors but all of us.

The next Speaker after the noble Lord, Lord Holmes, will be the noble Baroness, Lady McIntosh of Pickering.

It is a pleasure to speak to this group of amendments, and I declare my interests as set out in the register. I congratulate the noble Lord, Lord Stevenson, on the way in which he introduced this group, and on all the work that he has done in this area, not least with StepChange. More than a step change, he has done more than many marathons around this subject. Not just your Lordships’ House, but the nation, is in his debt for the work he has done on debt.

I also thank the Minister for his engagement throughout the Bill. I know that he is completely committed to this area, and I congratulate him on the engagement and the time he has spent with me and other noble Lords. It is safe to say that this is an issue that will run longer than this Bill. As with so many other issues, Covid puts a new lens on debt, and enables more people to understand that it is not necessarily just for others. Potentially, with a slight twist of circumstance, we are but a heartbeat, or a breath, away from being in tough financial straits. I congratulate the noble Lord, Lord Stevenson, and I look forward to hearing the response from the Minister.

My Lords, like my noble friend Lord Holmes, who I am delighted to follow, I am grateful to the noble Lord, Lord Stevenson, and the noble Baroness, Lady Bennett, for giving us the opportunity, with what I consider to be probing amendments, to explore in more detail how the statutory debt management plans will work. I must say to my noble friend the Minister that I am deeply uneasy, because there is very little detail in the Bill about how these provisions will work.

I am a Scot by birth, and a non-practising member of the Faculty of Advocates. Noble Lords will recall that I started my legal career as a humble Bar apprentice, working in a rather Dickensian attic along Heriot Row in Edinburgh, looking at debt collection as part of my role.

I am grateful to the Centre for Responsible Credit for its impressive briefing. What concerns me is a lack of urgency on the part of the Government. According to the Financial Conduct Authority, the pandemic has negatively impacted the finances of 20 million people. Problems are, I understand, concentrated among the self-employed, who obviously have been particularly hard hit, especially those who became self-employed in the year before the lockdown restrictions came into effect. Also heavily impacted are those on incomes of less than £15,000 a year, and BAME communities. The FCA estimates that just under one in five adults is overindebted, with 8.5 million potentially needing debt advice. According to the previous National Audit Office methodology, we can, sadly, expect the knock-on impacts of overindebtedness, such as increased mental health problems and unemployment, to cost the taxpayer in the region of £9 billion a year.

I shall ask my noble friend a question about what we could do, rather than playing for time and our not seeing any detail, with no scheme in place beforehand. As the noble Lord, Lord Stevenson, said in moving his Amendment 11 so effectively, the scheme will not be in place in England until 2024. The question must be: if there is a tried and tested scheme in Scotland, which is working, could we not therefore adapt that scheme to operate in England in the next two years? That would be a great help, and would go to the heart of how we in the United Kingdom approach the issue of debt.

Amendment 12, too, has much to commend it, and I very much look forward to hearing what my noble friend will say in summing up this little debate.

My Lords, I support Amendment 11 in the name of the noble Lord, Lord Stevenson of Balmacara, and I remind the House of my interest as an ambassador and former president of the Money Advice Trust.

Although Clause 34 may be seen as a relatively small part of the Bill, we have had a great deal of discussion on it during the passage of the Bill—a sign of how important SDRPs are. Throughout the process, I and other noble Lords have been keen to secure clarity over the timetable for introducing SDRPs.

I thank the Minister for his positive and constructive engagement on this issue and for meeting me and the noble Baroness, Lady Morgan, to discuss the timings for the introduction of SDRPs. Like the noble Lord, Lord Stevenson, I am also grateful to the Minister for his letter yesterday, which provided further clarity on this timetable.

In Committee, the Government did not accept my amendment to include a specific date by which SDRPs should be implemented. I was pleased nevertheless to hear the Minister confirm that the complex and detailed process to prepare for implementation seemed to be entirely compatible with the end date I was proposing—albeit pretty tightly.

So I hope the Minister will be able to confirm that on the record this evening, by specifying the various stages of the Treasury’s intended timetable for laying the regulations and reassuring the House that SDRPs are genuinely intended to have a commencement date before May 2024. I look forward to the Minister’s reply.

My Lords, I join in congratulating the noble Lord, Lord Stevenson of Balmacara, on his amendments in Committee and again here on Report. He has clearly found a mechanism for engaging very fruitfully with the Government, and therefore we all have the benefit of a letter that lays out some of the important and significant elements of statutory debt repayment plans; for that, I am grateful.

I join with the noble Baroness, Lady McIntosh, in being rather perturbed—I think the noble Lord, Lord Stevenson, was as well—that the implementation date is 2024. I think that the noble Lord, Lord Stevenson, said that it was towards the end of 2024. I advise the Government not then to use terms such as “at pace”, which they use extensively in the Financial Services Bill—usually to argue that there is no time for a statutory instrument to be approved by Parliament, which takes a matter of weeks.

I am rather troubled and it suggests that the Government might want to think of some kind of stopgap to deal with the very significant number of people who will find themselves with debt problems as we come to the end of furlough. People will find that they have been moved into permanent redundancy and that other jobs are hard to obtain, and a lot of young people coming out of university courses will not find the usual opportunities.

We are going to go through a very rough period where quite a number of people will find themselves loaded down with private debt, not because they have behaved inappropriately in any way but because the way events have hit them. They will need some additional support and rescue, rather than just the schemes that are in place. The SDRPs would almost certainly have been ideal for many of them. So I hope the Government will look at the events that are going to force a lot of people into a very difficult position.

Amendment 12, tabled by the noble Baroness, Lady Bennett, would do what I think Amendment 55 in Committee was intended to do. This time I think it would do it. It is designed to enhance opportunities for people who have signed up to SDRPs to pay off their debts early at a discount. It will need some structure and engagement from social enterprise groups and perhaps even the Government providing some measure of support, because seed funding will be needed to get a scheme such as this off the ground. I hope that the Government will think some of that through. It seems the kind of scheme that would enable people to get back into the financial mainstream more quickly, which is surely something we want to achieve. Again, the need for that will be more acute because of the extraordinary number of people who will find themselves in debt as a consequence of Covid. I do not think it actually requires legislation, so I am glad that the noble Baroness, Lady Bennett, will choose not to move it.

These two amendments highlight the need for some serious thinking on how the Government can best support people who will come out of Covid and find themselves in fairly difficult circumstances. When we work with people who have debt problems, a fundamental issue usually has to be dealt with that has led them into that corner. Sometimes it is to do with lifestyle choices, but very often it might be mental health issues or family breakdown. The group who will find themselves in problems because of the impact of Covid do not fall into that category. Therefore, with a proper helping hand at the right time, they could quickly and easily be returned to a position where they are no longer financially excluded or in financial difficulties. That is absolutely necessary if we are to see the recovery that we all hope for. I hope the Government will look at these amendments and continue to build on them, rather than consider them concluded because Report has passed.

My Lords, we welcome the re-tabling of Amendment 11 by my noble friend Lord Stevenson, which provides the Minister with an opportunity to give more detail on the intention behind the Government’s introduction of the statutory debt management scheme. We are grateful to the Minister and his officials for the various meetings that have taken place in recent weeks. We hope that, even once the Bill has passed, there will be opportunities for further cross-party dialogue on issues relating to personal debt, financial resilience and so on.

There was a lively debate on this issue in Grand Committee, and various amendments were tabled by colleagues from across the Committee. Despite the number of amendments, almost all noble Lords were united in saying that the Government must get on with introducing the scheme. Amendment 12 from the noble Baroness, Lady Bennett, co-signed by the right reverend Prelate the Bishop of St Albans, deals with some slightly broader issues relating to problem debt. We hope that the Minister can provide a full response to those points, either now or in writing.

Looking at these amendments and the next group on BNPL and financial exclusion, I am struck by just how important it is to adopt a more holistic approach to personal finance, as proposed by my noble friend Lord Stevenson in his previous amendment on the concept of financial well-being. Helping people with debt has to be important. I have trouble understanding how people cope with that situation. It is the role of the state to provide structures to allow people to take on their debt problems in a managed way. I look forward to the Minister’s response to my noble friend’s amendment.

My Lords, I am grateful for the opportunity to respond to the debate. I genuinely thank all noble Lords who spoke in Committee and who have spoken today and, indeed, those with whom I have had the privilege of meeting and discussing these matters of engagement. All the discussions have been useful, and the Government have certainly listened to them. I hope that in my letter which I have placed in the library of the House and my remarks this evening, I will be able to assure noble Lords that that is the position.

What I have found most pleasing is a sense of unanimity, which is rare in this House, that we are on the right track as regards seeking a scheme of this kind. The SDRP is a new solution for those who are in problem debt. It will provide a revised, long-term agreement between the debtor and creditors. Debtors will be protected from most credit enforcement action and from certain interests and charges on debts in the plan. Following the Committee stage and the valuable discussions I have referred to, I wrote to the noble Lord, Lord Stevenson of Balmacara, the noble Baroness, Lady Coussins, and my noble friend Lord Lucas with further details. The noble Lord, Lord Stevenson, referred to aspects of that letter. However, the Library of your Lordships’ House is not open to everyone, particularly at this time. Given its importance to today’s debate, I hope that your Lordships will indulge me if I take some time to place on public record some of the key commitments set out in it because they are commitments which have been made on behalf of the Government. I also want to ensure that all noble Lords understand the timings the Government are working to.

I spoke in Committee in response to the noble Baroness, Lady Kramer, about the range of support being given by the Government to people at this difficult time, and she is quite right to refer to those difficulties. In the meantime, as we work on the SDRP, the Government are pushing ahead with the implementation of a breathing space scheme that will come into force on 4 May this year. Other voluntary and statutory debt solutions will continue to be available to debtors to consider in the meantime.

I return to the process which has been of interest to many noble Lords. The Treasury is currently drafting regulations for the SDRP and intends to consult on them as soon as possible after the Financial Services Bill receives Royal Assent. As well as preparing the regulations, the Treasury will also need to work with the Insolvency Service and others to implement new IT systems and develop scheme guidance to aid stakeholders in implementing the policy. It is also important, obviously, to give stakeholders adequate time to prepare so that the regime can be implemented properly. Given that, I can confirm that the Government expect the SDRP to be implemented in 2024. In order to achieve that, they will aim to lay the necessary regulations by the end of 2022.

I am sorry that the noble Lord, Lord Stevenson of Balmacara, is disappointed at the specifics of my letter on the timing and, indeed, that has been alluded to by others. However, I will repeat that it is the Government’s clear aim and intent, as the noble Baroness, Lady Coussins, was kind enough to say, to operate on that timetable with the most appropriate dispatch.

As to why the SDRP regulations might not be able to be laid until the end of 2022, the reality is that the Treasury is currently working on their drafting. I have explained that this is a complex undertaking and will require input from stakeholders both inside and outside the Government to finalise before a consultation on regulations can be published. That consultation will in turn need to give a reasonable length of time—we are often criticised for providing insufficient time for consultation—for stakeholders and members of the public to reflect and respond. We must allow sufficient time beyond that to consider the responses properly. Those views, as appropriate, will need to be reflected in the draft regulations before they are laid. The timetable will also need to accommodate the necessary clearances within Government and Parliament for publications and legislation. However, I know that noble Lords on all sides of the House, including on these Benches, wish for the SDRP to be progressed in a timely manner. The Government have certainly understood the strength of feeling among noble Lords on this matter.

I know that the noble Lord, Lord Stevenson of Balmacara, wished also to further understand some of the details of the regime; as he has made clear, that is what his probing Amendment 11 seeks to explore. So I repeat on the public record that the details of the SDRP regime will be set out in affirmative secondary legislation, so Parliament will be able to consider the exact details close to the time. I also reassure noble Lords that Section 7 of the Financial Guidance and Claims Act 2018, as amended by Clause 34 of the Bill, will contain powers to allow the Government to include such features in the SDRP as suggested in the amendment. However, in response to the noble Lord, Lord Stevenson, I will set out further detail on how the Government expect the regime to function.

First, on the question of who can offer an SDRP, it is envisaged that only debt advice providers with appropriate authorisation from the FCA will be able to do so. That is unless, as the noble Lord, Lord Stevenson, said, it is a local authority that offers money advice and is exempt from FCA authorisation. Debt advice providers will not be able to charge a fee to debtors for accessing an SDRP, which is the same approach the Government have taken in the Breathing Space scheme.

Secondly, on the question of funding, we expect that the administration costs of the SDRP will be funded by deducting 10% from debtors’ monthly repayments, of which 8% will be provided to the debt advice provider, 1% to the Insolvency Service, and a further 1% to the payment distributor. This proposed 10% fee is expected to be sufficient to cover the costs of administering the SDRP by the parties involved, while also providing fairness to creditors, but the Government will of course keep this under review.

Thirdly, on the question of debts to the Crown, our consultation response sets out that the widest range of personal and business debts should be eligible, including financial services debt, household Bills, and debts owed to local and central government. I was asked by the noble Baroness, Lady Coussins, about enforcement action. Details of what kinds of enforcement action will be prohibited in an SDRP will be set out in regulations, which will be consulted on. In the Breathing Space scheme, types of enforcement action are set out in regulations. The list is not exhaustive, but it specifically sets out the actions that are prohibited during a breathing space, including, for example, obtaining a warrant, starting legal proceedings, and selling or taking control of a debtor’s goods.

Finally, on protecting people from the actions of bailiffs, we will have an opportunity to discuss this later on Report, but debtors are expected to be protected from most creditor enforcement action during an SDRP, including action by enforcement agents such as bailiffs. I hope that setting these points on the record will satisfy the House and the noble Lord, Lord Stevenson of Balmacara, and that he will be able to withdraw his amendment.

Amendment 12 would provide that regulations establishing the SDRP may include a provision that would mean debts could be repaid in a single transaction, and possibly reduced by agreement with creditors. Again, I take this opportunity to remind noble Lords that, as a repayment plan, the SDRP is intended to support the repayment of debts in full over a period of time that is reasonable and that appropriately reflects the debtor’s circumstances and ability to pay. It is intended to help individuals who do not have the financial means to pay off their debts in a single transaction.

The SDRP necessarily balances the interests of debtors and creditors and aims to maximise returns to creditors while supporting people struggling with problem debt. Were the debt value to be reduced, as suggested by the amendment, this could have a disproportionate effect on creditors. Other statutory debt solutions, such as debt relief orders, offer debt relief to people for whom repayment is not a realistic prospect. The average plan is expected to last around seven years. How much a debtor can afford to repay every month will be determined by the debt adviser, and the Government’s 2019 consultation proposed that they would use a standard financial statement, which is an industry-wide method of calculating income and expenditure.

This amendment could also allow the regulations to create a situation where the debt adviser would take on liability for the debtor’s debts by making a one-off payment to the creditor on their behalf and then clawing this back from the debtor during the course of the SDRP. Such an arrangement would change the policy intent of the SDRP and impose significant financial liabilities on the debt advice provided; many of these organisations are not-for-profit or, indeed, charitable organisations.

I understand the purpose behind the amendment of the noble Baroness, Lady Bennett, but we believe that the approach that I have set out today on the SDRP is the right approach. I must tell the noble Baroness that we will not be able to accept her amendment either now or at Third Reading. Her Majesty’s Government, however, will of course be open to conversations with all interested parties as work on the scheme goes forward. I hope that our openness in the course of this Bill is an earnest of that. So it is for these reasons that I ask that the amendment be withdrawn.

My Lords, I thank all those who have participated in this short debate. It was unfortunate that, because of timing and other pressures, we have lost the contributions from the noble Baroness, Lady Morgan of Cotes, and indeed from the right reverend Prelate the Bishop of St Albans, both of whom had interesting points that they wanted to make. Despite that, we have touched just about every issue that needed to be looked at. Indeed, we have gone a bit further. I am very pleased that the debate has taken place, even though we have just passed our closing time.

I will take a few minutes to wind up by touching on a couple of points. Of course, I am deeply embarrassed by the idea that this initiative is all my responsibility and that I should get all the credit for it. That is certainly not the case. This has been a team effort by many groups and bodies, many of which were referred to by the Minister in his remarks. We should give credit to the not-for-profit and charitable bodies that have been working tirelessly over many years to get unmanageable debt sorted out in our society, for all the reasons that the noble Lord, Lord Davies of Brixton, said. It is a cost to the public good. We did a calculation when I was at StepChange which suggested it was probably costing about £9 billion a year. I was interested that the noble Baroness, Lady McIntosh, also came up with a figure very close to that.

It is important that we have a mature and sensible debate about debt: how it happens, how it arises, and how it gets resolved. The great thing about today, and what I take away from it, is that we are able to do that in your Lordships’ House in a way that reflects the very best of our ability to contribute to these debates, and also with a listening Government who are prepared to take it back and see if there is a way in which legislation and regulation can be adjusted. If we can understand a little bit more about why debt happens and what people want to do about it, I think we will all benefit.

My experience at StepChange was rather unexpected. When I first went there, I thought it would be largely a collection of feckless people who had got themselves into overspending and debt. In fact, the truth was that our median client was probably in their 50s, had led a blameless life and done everything to make sure that their outgoings and income matched and that there was not a debt problem for them. They had done the best for themselves and for their families, and it was always, as someone said in the debate, an unexpected issue: somebody had got ill, somebody had lost their job unexpectedly, or there was some other crisis that occurred that tipped them over into a situation for which—and this was a message that came over time and time again—they really did not have the tools in their own personal skillset to be able to deal with. They did not understand the financial system very well, they could not understand where they could get help from, there was a confusing number of people who were trying to make money out of the problems that they were in, and they struggled.

It was only because of StepChange, Money Advice Trust, Citizens Advice, Christians Against Poverty and others who have done fantastic work over the years that we have got ourselves to a point where we can see a way forward on this. This legislation will help tremendously. There is no doubt about that at all. I am very grateful to the Government for having listened, having thought through the issues, and come forward with sensible plans, even though like others I regret the timescale that we are on. Nevertheless, I am sure we can get it right.

The Minister echoed a lot of the good will and support around the House that I have been reaching out to. But if he thinks this is the end of the line, he has another thing coming. I have a long list of things that I would still like to get done, things that have got away so far but which I shall try to ensure I do before I stop. If we get people off unmanageable debt and back into society, they often have terrible problems getting a credit rating. We must attack that. Even getting a credit card after you have been through a debt process is very difficult. A whole series of issues could come under the process that we talked about on an earlier Amendment regarding financial well-being. We could look at that, with advantage, to build on where we are today.

If we can, as the noble Baroness, Lady McIntosh, said, have a sensible discussion about who is affected, why it happens and how we can do best by them, we will all benefit. With that, I again thank noble Lords for their contributions and beg leave to withdraw this amendment.

Amendment 11 withdrawn.

Amendment 12 not moved.