Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the positive impacts of the Canada Child Benefit that was introduced in 2016, and what lessons they have learned from it in developing their own policies.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
We keep Child Benefit under regular review and part of that includes considering international comparisons.
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government what records they keep of the rate of (1) credit use, and (2) problem debt; and what assessment they have made of the effects of these on the UK population.
Answered by Lord Harlech - Lord in Waiting (HM Household) (Whip)
The Government monitors the rate of credit use and problem debt by working closely with the Money and Pensions Service (MaPS) and the Financial Conduct Authority (FCA), as well as by engaging with the debt advice sector and other relevant stakeholders on their research and findings.
The FCA conducts a biennial Financial Lives Survey which provides a comprehensive insight into the finances, including consumer credit product usage, of the UK population. The latest ‘snapshot’ findings from their survey were published on 21 October 2022 and can be found on their website.
Retrospective analysis of trends in consumer credit product usage is also produced by other organisations, including as part of the Bank of England’s monthly statistical releases. Recent Bank of England data shows that net consumer credit lending has shown some increase in recent months but remains close to the levels seen in 2019.
MaPS monitors levels of problem debt through an annual survey of 22,000 individuals. MaPS published its latest data on 23 February 2022, which can also be found on their website. This includes a regional breakdown of how the need for debt advice has changed since 2019 across the UK.
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the potential impact of expanding the Help to Save scheme to all Universal Credit claimants and broadening points of access to include credit unions and other providers of low-cost credit.
Answered by Lord Harlech - Lord in Waiting (HM Household) (Whip)
Help to Save aims to support individuals to kickstart a regular, long-term savings habit and build a rainy-day savings fund by providing a generous government bonus on savings over four years.
The scheme’s eligibility criteria target working individuals in low-income households, who may be able to save a small amount each month due to their employment or self-employment income. Individuals are eligible to open a Help to Save account if they are: receiving Working Tax Credit; receiving Child Tax Credit and are entitled to Working Tax Credit; or receiving Universal Credit and had take-home pay of £658.64 or more in their last monthly assessment period.
As the scheme is targeted towards working individuals, the Government has no current plans to broaden the scheme’s eligibility criteria.
Help to Save is currently delivered by NS&I on behalf of HMRC. This delivery model provides national coverage with a single provider, maintaining simplicity for scheme participants and providing a single point of entry to the scheme. The Government has no current plans to alter this delivery mechanism to allow credit unions or other providers of low-cost credit to offer Help to Save.
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government whether they have any plans to increase regulation for unregulated digital Buy-Now-Pay-Later products; and if so, when they intend to introduce such measures.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government has announced its intention to bring currently unregulated Buy-Now Pay-Later products into Financial Conduct Authority regulation. The Government published a consultation on a proposed proportionate approach to regulation in October 2021, and published a response to that consultation in June 2022.
The Government will publish a consultation on draft legislation soon.
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask Her Majesty's Government what steps the Money and Pensions Service is taking to help those in need of debt advice know where to seek it.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government is committed to monitoring and understanding personal debt levels in the UK, including the impact of cost-of-living pressures, and help individuals access appropriate guidance and support if they need help to get their finances back on track. Different organisations measure and define ‘problem debt’ in different ways. The Government monitors personal debt levels by working closely with the Money and Pensions Service (MaPS) , the Financial Conduct Authority and by engaging regularly with many other stakeholders on their research and findings.
MaPS undertakes an annual survey of Debt Need to understand how many people are facing financial difficulties and to better understand their characteristics, needs and preferences. The most recent survey indicated that 16% (around 8.5 million) of the UK adult population needed debt advice, with a further 20% (around 10.6 million) ‘at risk’ and likely to need help if their situation deteriorates.
To help people in problem debt, the Government continues to maintain record levels of funding for free-to-consumer debt advice in England in 2022-23, bringing this year’s debt advice budget for MaPS to over £90 million.
In addition to this, the Government launched the Breathing Space scheme in England and Wales last year. The scheme gives eligible people in problem debt who receive professional debt advice access to a 60-day period in which enforcement action is paused and most fees, charges and interest are frozen. Mental Health Crisis Breathing Space is an additional strand of Breathing Space that enables people receiving mental health crisis treatment to access the protections of the scheme for the full duration of their treatment, plus a further 30 days. In 2021, MaPS set up a single point of entry for the service and commissioned a dedicated pilot, delivered by Rethink Mental Illness.
The Government also continues to develop the Statutory Debt Repayment Plan (SDRP), a statutory agreement that will enable a person in problem debt to combine their debts into a single repayment plan, with payments made over a manageable time period, while receiving legal protections from creditor action for the duration of their plan.
To help people access debt advice, MaPS launched MoneyHelper in 2021, a consumer-facing service which provides free and impartial guidance for people across the UK. This includes budget planning and bill prioritiser tools, practical tips for engaging with creditors and a Debt Advice Locator Tool, which helps people find free, high-quality debt advice in their local area or via telephone and online.
MaPS has also developed the Money Advisor Network pilot which enables a range of organisations including Job Centre Plus, local authorities and financial service providers to refer people for free to MaPS funded debt advice. The individuals referred can either proceed immediately to debt advice, request a call-back at a more convenient time or schedule an in-person appointment.
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the effect of increases to the cost of living on problem debt for those in the bottom 40 per cent of equivalised household incomes; and what steps they are taking to protect such households from problem debt.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government is committed to monitoring and understanding personal debt levels in the UK, including the impact of cost-of-living pressures, and help individuals access appropriate guidance and support if they need help to get their finances back on track. Different organisations measure and define ‘problem debt’ in different ways. The Government monitors personal debt levels by working closely with the Money and Pensions Service (MaPS) , the Financial Conduct Authority and by engaging regularly with many other stakeholders on their research and findings.
MaPS undertakes an annual survey of Debt Need to understand how many people are facing financial difficulties and to better understand their characteristics, needs and preferences. The most recent survey indicated that 16% (around 8.5 million) of the UK adult population needed debt advice, with a further 20% (around 10.6 million) ‘at risk’ and likely to need help if their situation deteriorates.
To help people in problem debt, the Government continues to maintain record levels of funding for free-to-consumer debt advice in England in 2022-23, bringing this year’s debt advice budget for MaPS to over £90 million.
In addition to this, the Government launched the Breathing Space scheme in England and Wales last year. The scheme gives eligible people in problem debt who receive professional debt advice access to a 60-day period in which enforcement action is paused and most fees, charges and interest are frozen. Mental Health Crisis Breathing Space is an additional strand of Breathing Space that enables people receiving mental health crisis treatment to access the protections of the scheme for the full duration of their treatment, plus a further 30 days. In 2021, MaPS set up a single point of entry for the service and commissioned a dedicated pilot, delivered by Rethink Mental Illness.
The Government also continues to develop the Statutory Debt Repayment Plan (SDRP), a statutory agreement that will enable a person in problem debt to combine their debts into a single repayment plan, with payments made over a manageable time period, while receiving legal protections from creditor action for the duration of their plan.
To help people access debt advice, MaPS launched MoneyHelper in 2021, a consumer-facing service which provides free and impartial guidance for people across the UK. This includes budget planning and bill prioritiser tools, practical tips for engaging with creditors and a Debt Advice Locator Tool, which helps people find free, high-quality debt advice in their local area or via telephone and online.
MaPS has also developed the Money Advisor Network pilot which enables a range of organisations including Job Centre Plus, local authorities and financial service providers to refer people for free to MaPS funded debt advice. The individuals referred can either proceed immediately to debt advice, request a call-back at a more convenient time or schedule an in-person appointment.
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the effect of increases to the cost of living on problem debt; and what steps that are taking to reduce problem debt.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government is committed to monitoring and understanding personal debt levels in the UK, including the impact of cost-of-living pressures, and help individuals access appropriate guidance and support if they need help to get their finances back on track. Different organisations measure and define ‘problem debt’ in different ways. The Government monitors personal debt levels by working closely with the Money and Pensions Service (MaPS) , the Financial Conduct Authority and by engaging regularly with many other stakeholders on their research and findings.
MaPS undertakes an annual survey of Debt Need to understand how many people are facing financial difficulties and to better understand their characteristics, needs and preferences. The most recent survey indicated that 16% (around 8.5 million) of the UK adult population needed debt advice, with a further 20% (around 10.6 million) ‘at risk’ and likely to need help if their situation deteriorates.
To help people in problem debt, the Government continues to maintain record levels of funding for free-to-consumer debt advice in England in 2022-23, bringing this year’s debt advice budget for MaPS to over £90 million.
In addition to this, the Government launched the Breathing Space scheme in England and Wales last year. The scheme gives eligible people in problem debt who receive professional debt advice access to a 60-day period in which enforcement action is paused and most fees, charges and interest are frozen. Mental Health Crisis Breathing Space is an additional strand of Breathing Space that enables people receiving mental health crisis treatment to access the protections of the scheme for the full duration of their treatment, plus a further 30 days. In 2021, MaPS set up a single point of entry for the service and commissioned a dedicated pilot, delivered by Rethink Mental Illness.
The Government also continues to develop the Statutory Debt Repayment Plan (SDRP), a statutory agreement that will enable a person in problem debt to combine their debts into a single repayment plan, with payments made over a manageable time period, while receiving legal protections from creditor action for the duration of their plan.
To help people access debt advice, MaPS launched MoneyHelper in 2021, a consumer-facing service which provides free and impartial guidance for people across the UK. This includes budget planning and bill prioritiser tools, practical tips for engaging with creditors and a Debt Advice Locator Tool, which helps people find free, high-quality debt advice in their local area or via telephone and online.
MaPS has also developed the Money Advisor Network pilot which enables a range of organisations including Job Centre Plus, local authorities and financial service providers to refer people for free to MaPS funded debt advice. The individuals referred can either proceed immediately to debt advice, request a call-back at a more convenient time or schedule an in-person appointment.
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask Her Majesty's Government whether they applied the Family Test to the measures set out in the Chancellor of the Exchequer's Spring Statement on 23 March; and if so, what their conclusions and mitigations were.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Treasury has established processes in place to ensure appropriate assessments of equality and family test impacts are conducted in the development of new policy.
In the interests of transparency, we have gone beyond legal requirements by publishing impacts for the tax measures announced at the Spring Statement 2022 in summary form in Tax Information and Impact Notes (https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins - spring-statement-2022)
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask Her Majesty's Government what steps they are planning to take to address the high cost of living, even after the rate of inflation has reduced.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
As the global economy recovers, many economies are experiencing high inflation, in part due to pressures from rising energy prices and disruptions to global supply chains. These global pressures are the main driver of higher inflation in the UK.We understand the pressure that a higher cost of living places on people and low-income families. The government is providing support worth over £20 billion this financial year and next that will help families with the cost of living. This includes cutting the Universal Credit taper rate and increasing work allowances to make sure work pays, freezing alcohol and fuel duties to keep costs down, and the £9.1 billion package announced in February 2022 to help households with rising energy bills.
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask Her Majesty's Government what measures they are taking to ensure that potential claimants are aware of the policy to provide Child Tax Credit and Universal Tax Credit to a maximum of two children; and what assessment they have made of the effectiveness of any such awareness-raising measures.
Answered by Lord Bates
The policy to provide support for a maximum of two children in Child Tax Credit (CTC) and Universal Credit (UC) was originally announced at Summer Budget 2015 and legislated for in the Welfare Reform Act 2016. The government chose to implement the policy from April 2017 to ensure households were aware of the policy before choosing to have third or subsequent children. HMRC also provided information in leaflets to all claimants renewing their CTC claim since 2016 and a leaflet has also been included in the CTC new claim pack since the policy came into force. Since August 2016 high level messaging about the policy has been available on GOV.UK.