Breathing Space Scheme

Caroline Spelman Excerpts

Wednesday 29th March 2017 Westminster Hall

[Kelly Tolhurst (Rochester and Strood) (Con)]

I beg to move,

That this House has considered the Breathing Space scheme to help families in debt.

It is a pleasure to serve under your chairmanship this afternoon, Mr Turner. I am grateful to have secured my first Westminster Hall debate since my election to the House and I am thankful that so many Members have turned up to support me.

As many Members will know, issues of fairness are close to my heart, and in particular, fairness for children and young people. Personal debt problems can have profound consequences on those groups, yet the system we have means that creditors are again and again hassling and hounding families and young people for debts in an aggressive and harmful way. The breathing space scheme would deliver respite from those threats in two ways: through introducing a breathing space so that people in financial difficulties get the help they need to stop their debts from spiralling, and through achieving a safer way for families to make agreed debt repayments with creditors. The scheme is about ensuring that families doing the right thing about their debts are properly protected.

I am delighted that the Government are actively considering whether a breathing space scheme, such as I have proposed in my private Member’s Bill, should be introduced. I want to ensure that families who are repaying their debts have a legal guarantee against poor practices, ultimately protecting the children in those households. People often have debts with multiple creditors. Unfortunately, at the moment, what we see so often is councils reaching for bailiffs instead of looking to work on affordable payment plans, or a bank adding punitive charges to a family’s account, sending their debts out of control.

[Dame Caroline Spelman (Meriden) (Con)]

I am sure my hon. Friend is aware that the Children’s Society data show that 20% of families in council tax debt are visited by bailiffs, and that more than 30% of those families have to cut back on essentials such as food. Does she agree that a breathing space would give those families an opportunity to work with charities such as Fair for You to have planned expenditure for household items, and that Christians Against Poverty offer training courses in budgeting, which would help prevent debt spiralling?

[Kelly Tolhurst]

I agree with my right hon. Friend. My Bill and this campaign seek to give people exactly those opportunities to work with charities to come up with a structured payment plan and to give them safety in that period—I completely agree.

--- Later in debate ---

[Mr Philip Hollobone (Kettering) (Con)]

I commend my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst) for her initiative in bringing forward these proposals. She is clearly at the forefront of this worthwhile campaign, and she is ably supported by hon. Members from across the House, in particular by my hon. Friend the Member for Eastbourne (Caroline Ansell), who made a powerful speech.

Debt is a terrible problem among households. Like the hon. Member for Makerfield (Yvonne Fovargue), I was a debt adviser in a citizens advice bureau some years ago. Far too many families in Kettering have their lives blighted by taking on too much household debt.

Part of the problem is the language we use to describe these issues. At its most fundamental, it comes down to the word “credit”. Everyone thinks that credit is a good thing, and creditors like to use that word because it attracts people to take out their products, but let us call it what it is—it is not credit; it is debt. They are not credit cards; they are indebtedness cards, or debt cards. People love to have a credit card but, for hundreds of thousands of our fellow citizens, a credit card is a passport to a life of misery. They get themselves completely out of their depth when it comes to managing financial products and, as hon. Members so ably described, their lives and the lives of their children are blighted in so many ways as a result.

R3, which was mentioned, did a survey in February and found that just over two fifths—41%—of British adults are worried about their current debt and that 40% say that they often or sometimes struggle to get to payday. Those figures are true for people in the Kettering constituency, and the proposals of my hon. Friend the Member for Rochester and Strood would really help to address that.

There is also a woeful lack of financial education at school. If we are struggling now to manage household budgets, things will be even worse for future generations.

[Dame Caroline Spelman]

I would like to encourage my hon. Friend with the information that the Church of England’s schools—even the primary schools—have rolled out a programme of teaching financial literacy so that the next generation of children will be better equipped to cope with money and the pressure that is put on them at a tender age to borrow money.

[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.