Debt Advice Services

Lord Haskel Excerpts

Thursday 6th September 2018 Lords Chamber

Asked by

[Lord Haskel]

To ask Her Majesty’s Government what assessment they have made of demand for debt advice services; and what steps they are taking to reduce the level of household debt.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, the Government recognise that demand for debt advice is currently higher than supply. That is why we are increasing the funding for publicly funded debt advice. Although the level of household debt in relation to income is significantly down since the financial crisis, we realise that some people struggle with debt, which is why we are creating a breathing-space scheme to help people to get out of problem debt.

--- Later in debate ---

[Lord Haskel (Lab)]

Recently, there have been many reports of the rise in the number of people seeking debt advice and seeking loans to pay basic household bills. Many of these people are in work. National Debtline, the IPPR, McKinsey, and now the National Audit Office tell us that the cause is exploitative and precarious terms of employment, which enables low-value jobs, instead of encouraging productivity and investment in skills and trades. There was a time when we spoke of work being a way out of poverty, but under this Government it seems that the opposite is true. How will the Government make employment the answer and not the cause of this rise in household debt?

[Lord Bates]

I am sorry but I do not accept that; the evidence does not point to it. Over 3 million more people are in work in this country. We have seen one of the largest increases for the lowest-paid in this country through the introduction of the national living wage. As a result of basic tax thresholds being raised, the typical taxpayer in full-time work is £1,000 better off. That is not to diminish in any sense the fact that there is a serious problem with personal debt in this country. It is about 16.5% less than its pre-crisis levels when inflation is taken into account. That is why we are taking the steps that we are.