Breathing Space Scheme

Kirsty Blackman Excerpts

Wednesday 29th March 2017 Westminster Hall

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Turner. I do not imagine that I will take six minutes, but we will see—I sometimes wander off track.

I really appreciate the hon. Member for Rochester and Strood (Kelly Tolhurst) securing this important debate. It is key that we continue to discuss this issue and keep the pressure on until solid action is taken, so I appreciate being able to talk about it.

Several Members mentioned the percentages involved and the effects of debt on families. We do not talk enough in this House about the low savings that many families have. A quarter of families have less than £95 in savings because they are just not able or do not have the financial knowledge to save. If someone has only £95 in savings and their washing machine breaks down or their children need new shoes, their only option is to go into debt to fix those things, which are necessary. A lot of families just do not have an option; they have to rely on debt. It is not something that people get into intentionally to get nice shiny new sofas; it is a way that people finance their daily lives. I would like us to get out of that cycle, but that is where we are, and we need to help people whose debt becomes unmanageable.

The increased price of food was mentioned, and I think that that will come more to bear. We have seen rather high food inflation, particularly in the first part of this year, and that will really impact family budgets. The other thing about families is that children really are pretty expensive. On top of everything else—clothing and things like that—childcare costs are massive, especially when children are young. When you are having to work less because you have just had children, it is a very difficult time for families to manage their finances. For me, that is key point at which families should get the most support, rather than the little support they seem to get in some of these situations.

The hon. Lady mentioned the debt arrangement scheme in Scotland. As was said, that has been in place since 2004 and we have seen really big benefits from it. Scotland now has the lowest proportion of over-indebted individuals in the UK, which is probably a good measure to judge the scheme on. In advance of the debate, I looked up debt arrangement schemes. It struck me that a huge number of people who provide advice said, “If you are really struggling with debt, it’s very likely that a debt arrangement scheme will be the best type of scheme for you if you live in Scotland.” It seems to be held up as the go-to one. The quote from Martin Lewis about it being a “win-win-win” was mentioned by a number of Members. The people who are owed money get their money, which is key. That is why we have managed to get them on board and to bring in that regulated scheme.

In relation to the point made by the hon. Member for Makerfield (Yvonne Fovargue) on the length of time, in Scotland, it is six weeks, rather than 28 days. She might not think that is long enough, but that is what we use. If she were to be looking at the Scottish scheme and thinking about importing it to England and Wales, it might be good to look at whether six weeks has worked.

The debt arrangement scheme we have in Scotland has provided protection from enforcement by creditors across the time the money is being paid. People pay back the money over four or five years, instead of the one or two years in which they would have been expected to pay it back. It has also provided them with protection from bankruptcy; they do not have to go bankrupt. Yes, their names are placed on a register and stay on there for six years, but that does not have all the issues associated with bankruptcy. For us it has been hugely positive to have that scheme. I am sure the Minister will look at what has been done in Scotland and the effect that it has had. I am not saying in any way that it is perfect, but it has had a positive impact and changed the lives of families in Scotland.