Breathing Space Scheme

Andrew Turner Excerpts

Wednesday 29th March 2017 Westminster Hall

[Several hon. Members rose—]

[Mr Andrew Turner (in the Chair)]

Order. Three Back Benchers have caught my eye. I will call the Scottish National party Front Bencher at 5.10 pm, the official Opposition at 5.15 pm and the Minister at 5.20 pm.

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[Mr Hollobone]

Thank God for the Church of England—that’s all I can say. I hope that that scheme, which my right hon. Friend is right to highlight, is rolled out across the country into non-Church schools, too. We need to take advantage of best practice, and it sounds to me like the Church of England is doing that. There must be lenders out there that are examples of best practice and already give their customers breathing space, but we have not heard mention of them today. I would like to see their names up in lights as examples for others to follow. I close by commending my hon. Friend the Member for Rochester and Strood for her sterling efforts on the issue.

[Mr Andrew Turner (in the Chair)]

The first two Front-Bench speakers may now have an extra minute each. I call Kirsty Blackman.

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[Jonathan Reynolds]

I agree entirely with my hon. Friend, and in my closing remarks I will ask for exactly that commitment.

There needs to be clarity over how participation in a debt arrangement scheme will impact on an individual’s credit rating. The rationale behind avoiding bankruptcy is partly down to the future impact of that on an individual’s borrowing capacity and financial position, particularly when their financial affairs may stabilise in a matter of months. Individuals struggling with debt in the short term may be hesitant to enter into a scheme if they feel that would damage their long-term ability to secure finance or if it would serve as a black mark on their credit history, should they wish to obtain a mortgage in future.

The key priority now is to see some progress and movement. The Government initially promised to put forward the review of the scheme—[Interruption]

[Mr Andrew Turner (in the Chair)]

Order. I understand that there may be more than one consecutive Division in the House. Please could all Members return here as soon as possible after the final Division so that we can conclude the sitting? If there is only one Division, Members should return immediately after that.

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On resuming—

[Mr Andrew Turner (in the Chair)]

The sitting will conclude no later than 6.7 pm.

[Jonathan Reynolds]

Before the sitting was suspended, I had begun to reach my conclusion. The key priority now is to see progress and movement on this issue. The Government initially promised to have a review of the scheme by December 2015, as we have heard today, but we are still waiting for that. Since then, according to the debt charity, StepChange, 1.3 million people have sought debt advice from the major debt advice charities. That shows the urgency of the situation and the real need for the scheme.

In a December 2015 report, StepChange also estimated that problem debt was costing the economy £8.3 billion, through knock-on effects such as lost productivity and the strain on health services. I ask the Minister to agree about the importance of minimising the harm caused by personal problem debt, the costs of which evidently affect all parts of the country. Will he also commit to a timeline for producing a detailed proposal for a breathing space scheme?

The issue of growing personal debt will not go away. Indeed, evidence shows that it is getting worse. The Government need to respond to this debate by promising clear and comprehensive action on how that can be tackled. Opposition Members believe that, although the scheme would not be a total solution for the public, it would be an excellent starting point.