High-Cost Credit and Debt Management

Baroness Hollis of Heigham Excerpts

Monday 10th October 2016 Lords Chamber

[Lord Young of Cookham]

The FCA has brought right to the front of the queue the process of authorising the firms that the noble Lord referred to. It is going through that process as we speak and hopes to complete it relatively soon, depending on progress. As I said, if those firms do not meet the high standards set by the FCA, they will not be allowed to continue trading.

[Baroness Hollis of Heigham (Lab)]

My Lords, vulnerable and disadvantaged people want, need and desire credit as much as the rest of us do. The problem is, they cannot afford cheap credit because their credit status is not high enough, and I very much welcome the comments of the most reverend Primate. Will the Minister take back two queries to the DWP? First, given that so many people are spending up to 25% of their income on debt repayment—that is coming out of benefit income—can we ensure that jobcentres, benefit offices and other outlets promote the credit union initiative? Secondly, will he ask his colleagues in the DWP to look again at the ending of the Social Fund, which provided regulated, cheap and safe credit for essentials for people, which is no longer available to them?

[Lord Young of Cookham]

I agree entirely with what the noble Baroness said about promoting credit unions. We want a sustainable financial services sector, and that is why we have invested £38 million in credit unions through the Department for Work and Pensions credit union expansion project. We are also providing half a million pounds to help Armed Forces personnel access credit union services where they want so to do. There are other initiatives we are taking to support the credit union sector, and I will pursue with colleagues at the DWP the suggestion she made about the fund.