Community Debt Advice Services

Jim Shannon Excerpts

Wednesday 1st December 2021 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, Ms Bardell. I congratulate the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) on setting the scene and thank her for that. This is a massive issue, not just in the hon. Lady’s constituency, but in my own. In our office, we deal with those who have extreme financial difficulties every day and every week. I will give a couple of examples, without mentioning any names.

In Strangford, the CAB, Christians Against Poverty, church groups and other groups provide community debt advice services; those are the groups that I work with on most occasions. There has been an increase of at least 30% in gas, electricity and oil prices in Northern Ireland, and cold weather and an extreme winter are predicted. Food prices are up by as much as 20% in some places and there is the additional pressure of Christmas, with the expectation that many families feel forced to live up to. We all know about that because we talk to our constituents. When children see something at school that their friends have, there is almost an onus on the parents to make sure their children get the same thing. That is not a criticism; it is the nature of how we live in our lives, but it adds a huge burden to low-income families, with recent reports citing that families will spend an average of £300 per child. That does not include spending on other family members.

For me, Ms Bardell, Christmas is a time to enjoy being with family. I have three boys who are 32, 30 and 28, three daughters-in-law and five grandchildren, so for me Christmas is time to spend with my grandchildren. The good thing about being a grandparent is that at 7 o’clock at night I can give them back. We have all had those joys as parents; when they have a tantrum, or they get a bit tired but they do not want to go to bed—or they do want to go to bed.

[Margaret Ferrier]

A lot of people are not aware that Christmas spending is something that can be accounted for in income and expenditure forms when dealing with debt. Does the hon. Gentleman agree that the need for better awareness when dealing with debt does not mean losing that quality of life as well?

[Jim Shannon]

We do not want to lose quality of life, but we do need to deal with the reality of life. The hon. Member for Makerfield (Yvonne Fovargue) outlined in great detail the issues that most families feel—and address. It is easy for me to talk about time with the family, because it is my wife Sandra who chooses the Christmas gifts. She is better at it than me, and knows what the children want. The money we spend is disbursed as she sees fit. However, for other people, it will be a juggling exercise between buying Christmas presents and being able to afford the oil and electric bills. That is the issue and that is why I am here to speak on behalf of those constituents who are under great pressure.

The security is not there for many families. Rather than seeing disappointed faces on Christmas morning, people make purchases and live with the debt for months to come. Last week, in my local press back home, there was an indication that this year in particular, the issue for those who have maxed out their credit cards is that they will turn to payday loans. I have forever cautioned against that, because the reality will be extreme. There will be a pain-free two weeks, but then there will be a very painful month after Christmas. I have extreme concern for those people.

[Yvonne Fovargue]

Is the hon. Gentleman as concerned as I am about the rise in buy now, pay later debts? These are increasing exponentially; one advice agency said that 34% of people are now coming to them with buy now, pay later debts.

[Jim Shannon]

I certainly am concerned. I am going to give two examples of those who have had extreme difficulties. There are many groups in my constituency that do great work; Citizens Advice is one of them. I have dealt with Citizens Advice ever since I became an elected representative, first, as a councillor in 1985, then as a Member of the Legislative Assembly and now as a Westminster MP. I have a good working relationship and regular contact with Christians Against Poverty; they are inundated with people who have decided to make this new year the one when they get on top of their finances. Last year, CAP helped over 16,000 people with debt; they shared in the success of 2,500 becoming debt free—wow, it is a big day for people when they become debt free. It is so important. They helped almost 1,500 people through a covid-19 emergency appeal. Christians Against Poverty in my constituency are based at Thriving Life Church in Newtownards. I think probably all the churches have a help and advice service, similar to what Christians Against Poverty do. However, Thriving Life Church does particularly incredible work.

While I was sitting in this debate, I thought of one example—I am conscious of time and I want to be fair to other Members. On occasion I have had to contact Pastor Cotter of Elim Church, Newtownards, to deal with some personal debt issues that he has been able to help with. His ability to work through the mechanics of the mathematics and make sure that people get out the other side is incredible. The hon. Member for Kingston upon Hull West and Hessle said in her introduction, and it cannot be emphasised enough, that this drives people to the very edge of desperation. I have seen that. Christians Against Poverty facilitate, through some 1,200 churches across the UK, help and advice to those families and individuals who have got themselves into difficulties with their money. Many of these are working people; they are the working poor. These are the people we are here to represent. They are people who have incredible financial difficulty, who are squeezed most by the removal of the tax credit bonus, and who are suffering most with the universal credit differences.

I am going to give another, desperate example. I know one young women in my constituency whose disability living allowance was turned down. Over the 7 months of her appeal process, she found herself in over £4,000 debt, through maxed-out credit cards and payday loans—she was absolutely in over her head. I know that this is not the Minister’s responsibility, but there must be some way of hurrying up the process. It eventually found in her favour after seven months, but that was seven months of excruciating worry where she was pushed to the point of suicide. This is no exaggeration, but by the time she came into my office she was sobbing her heart out, mortified and suicidal. I was so grateful that my staff knew who and where to send her—where she would receive help and compassion and where there would be no judgment.

People who max out their cards are scared, fearful, apprehensive and extremely worried. That is why Citizens Advice, Christians Against Poverty and other groups are so important, and that is why we as elected representatives make those points on behalf of our constituents. My constituent needed CAP’s help, and that is why I believe that CAP and other community debt organisations are essential in today’s climate. Not only do they help to take the stress of the phone calls and letters but they future-proof finances. In other words, they sort out people’s issues today as well as giving them advice for the future—it is important that they do not later fall back into debt—and teaching finance coping mechanisms. They go through day-to-day finances with savings schemes and allocate money for small treats—people need the small treats for their children and families that many of us take for granted, such as a cinema trip or the Chinese at the weekend—as they understand life and have the expertise and knowledge to teach others a better way of handling the stress and pressure of life.

Christians Against Poverty and other community debt advice providers save lives and prevent the break-up of family units with their support and help. I thank CAP in Newtownards, based at Thriving Life church, for all that it does. Community debt centres are lifelines, and we have a responsibility to ensure that they have funding available to help to cover the costs of their free services, which save lives and improve people’s quality of life. As we come towards Christmas, I remind people that there is a way to come to terms with crippling debt: take that first step of acknowledging your problems and seeking the help you need. People want to help you, and your MP will want to help. Do not wait for the new year to come. Do it now, and have your Christmas unburdened by the stress of debt that is weighing you down. Help is available—just ask. People are there who could help you.

[Several hon. Members rose—]

--- Later in debate ---

[Alex Sobel (Leeds North West) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Ms Bardell. I start by thanking my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) not only for securing this debate, but for becoming a formidable champion for debt and welfare advice services up and down the country.

We are in the middle of a perfect financial storm. Increasing taxes, soaring inflation, the gas price crisis, the end of furlough, the removal of the universal credit uplift—the list goes on. As a nation, our finances are being squeezed more tightly than ever before, and what we have to show for it is an increase in personal debt. At least 7 million adults are currently behind on at least one household bill. The Bank of England has told us to expect a sharp increase in defaults on household and business loans, as well as a coming sharp rise in the cost of energy over the winter.

Perhaps it is unsurprising, then, that the newly-crowned most popular show ever on Netflix revolves around the central theme of crushing personal debt. We should make no mistake: whether through malnourishment, fuel poverty or, most commonly, poor mental health, debt does kill. It killed Jerome Rogers, who died by suicide aged just 20, having accrued debts of only just over £1,000 stemming from two unpaid £65 traffic fines. It disproportionately kills renters, the young, those on zero-hour contracts and people of colour.

But there is help at hand. Some of it comes from our own offices and the hundreds of dedicated caseworkers who work so hard for MPs, dealing with the broadest range of issues imaginable in what can often be a fairly thankless task. We all thank our staff for the work they do. Pre-pandemic research from the CAB found that more than three quarters of MP caseworkers had dealt with issues pertaining to bailiffs, and still more are dealing with a case load characterised more and more by personal debt and the issues it causes.

MPs’ offices, however, are not debt advice centres. Our staff do not have the time and, although I am lucky that my senior caseworker is also an experienced debt adviser, most of us are unlikely to have specifically trained staff in our offices. When I heard that MaPS was proposing a rise in funding for debt advice services, initially I thought I would be pleased, especially given that the predicted amount would rise by 60% by the end of the year; but my concern, like that of everybody else here, is that most of the funding is set to go to a handful of national services offering advice over the phone or online.

That change in funding strategy will have the impact of cutting face-to-face debt advice by possibly as much as 50% to 60%. I thank Unite the union for its campaign to support the retention of and possibly an increase in funding—it is defending not only its workers, but people in the most awful circumstances, and going above and beyond the remit of a trade union into broader social campaigning.

In Leeds, the decision will mean that at least three out of the four MaPS-funded services will lose advisers. For the benefit of those familiar with Leeds, that means that the Ebor Gardens Advice Centre is set to lose all its debt advisers, as will St Vincent’s Centre, and Better Leeds Communities will also lose half its advisers. To add insult to injury, Leeds City Council was not consulted prior to the recommissioning, and I am sure none of our other local authorities were either.

All those services are based in the constituency of my right hon. Friend the Member for Leeds Central (Hilary Benn), but they cover the whole city—a city with eight constituencies and 800,000 people. The important thing to remember is that those centres are not just there for debt and welfare advice; they are multi-purpose community centres. If someone goes in to see a debt adviser and does not have any food to feed their children, the centre will give them a food parcel. If someone is suffering from crushing mental health problems, they will be taken down the corridor to the counselling service. If someone has had nothing to eat that day, they will be taken downstairs to the café. Sorry—I am getting slightly emotional because I have a lot of experience with these organisations. I am thinking about people I know who have been to them. If someone needs to go to court, a person from the centre will physically go to court with them, hold their hand and support them through the process—an absolutely awful experience for anybody who has to go through it.

Those multi-service community centres cannot be replaced by a screen or a phone. The Minister really needs to think about that. We are not just talking about the fact that people will not have a service that can deal with their debt; they will not get support at all. Many, many people who face debt crises already have suicidal thoughts. We will see a big increase in suicide rates, pressure on A&E and the inundation of hospitals and mental health institutions, just for the sake of saving a fairly small amount of MaPS funding.

Those organisations, and so many like them up and down the country, do vital and essential work. Experienced debt advisers can be the difference between shelter and homelessness, between happiness and despair, for many people. They change and save lives. Once they are gone—once they have left the profession—it is very hard for them to come back. These are not well paid jobs.

[Jim Shannon]

It is a vocation.

[Alex Sobel]

Absolutely, it is a vocation—a passion. Debt advisers want to help people. They want to save lives. When they leave the profession, they are very well qualified to work in many other areas, including financial services, where they will be paid much more. Once they’re gone, they’re gone.

Every community needs specialist debt advisers who are available to those who need them. I am sure that, as MPs, everyone in the Chamber can appreciate that people need face-to-face support for many different reasons. That is one reason why we hold surgeries for our constituents, but we cannot be the last emergency service; we need these specialist services. I therefore ask the Minister today to stop the procurement exercise and retender it with a priority on face-to-face debt advice, as well as online and phone advice, so that we get the services people need and avoid a potential crisis in this country with severe loss of life.