I beg to move,
That this House
has considered promotion and regulation of financial products on Black Friday.
It is a pleasure to serve under your chairmanship today, Mr Robertson. May I associate myself with your comments? I had the honour and pleasure of taking part in debates chaired by Sir David. He was always a fair and very fun Chair to have around; we shall miss him terribly.
I want to be clear from the start that I do not think that anybody in this room is green—green in the sense of being the Grinch. This is not a debate about whether people should be able to spend money, which is a personal decision. As we come up to Christmas, it is important to recognise that for many families this year will be an extra special one, given what we have been through over the past two years. I recognise that it is very easy, when we talk about consumer credit, to sound like the Grinch, as though we are saying it is all so complicated and difficult and that nobody should spend any money. Let me be clear that it is not my intention to come without good Christmas cheer.
Indeed, I note that many retailers are taking advantage to promote the idea that this is the year that one should really indulge and go all out. Tesco tells us, “Don’t stop me now,” when it comes to shopping. Argos tells us, “Baubles to last year,” and Debenham’s says, “Christmas like never before.” Aldi tells us not to be a Scrooge—at least, I think that is what they are telling us with the Christmas carrot. Sports Direct is more direct than ever, telling consumers to “Go all out!”
My point is more simple. We want families to be able to celebrate with their families and not be worried. One thing we know that causes the most worry to families is money. We are a nation that has not done as well in the G7 as some others, but we are second highest among the G7 countries for household debt. That is one competition we do not want to win as a nation—but we do. We have always been more comfortable with borrowing and credit than other nations.
My point in calling the debate on Black Friday and the run-up to Christmas is to recognise that this is a time when for many families getting into debt seems the right thing to do, because it is about being able to treat loved ones. When we have had so little time with our loved ones and been so apart—I hope we can be together this year—being able to do that feels even more important. As a result, the risks that families face are even higher.
I recognise that the Minister cares passionately about the subject and has done a lot of work on it. My call is about how we will help those families have a good Christmas, so that the new year is not a time of further worry and distress caused by debt. The honest truth is that as much as people talk about the pandemic as a time when some families have paid down debt and saved money, since they have not been able to go on expensive foreign holidays, for many others it has been a time of further financial distress. I used the word “further” critically, because we are a nation that has a problem with household debt, and has had that for some time prior to the pandemic.
Prior to the pandemic, Experian found that 40% of people would not be able to pay their mortgage or rent if it increased by £50 or more a month. Just an extra £50 and they were sunk. A total of 10% of this nation was constantly overdrawn, and that figure has remained pretty stable for many years. As many as 2.8 million people have persistent credit card debt, which means that they are paying more in interest fees and charges than in paying off the debt.
For some people in this nation, saving is a habit, while for others it will always be an ambition. Some 34% of adults have never had any savings or have savings of less than £1,000. There were many people in this country who were struggling financially before the pandemic. What the pandemic has done for that group of people—people for whom a foreign holiday was never a possibility —is throw into sharp relief just how difficult their finances were. Many of those are in precarious jobs, such as in retail or hospitality, and they were hit even harder when the pandemic came.