Covid-19: Household Debt

Simon Fell Excerpts

Thursday 8th July 2021 Westminster Hall

[Simon Fell (Barrow and Furness) (Con)]

It is a pleasure to serve under your chairmanship, Mr Bone. I thank the hon. Member for Makerfield (Yvonne Fovargue) for securing this important and timely debate.

I am not alone in seeing the impact of covid-19 on household debt in my mailbag and through surgeries. I suspect I am also not alone in this place in seeing the divergence between those who have managed over the past year to cut their costs and increase their savings and those who are just about managing, who now find themselves in an even more perilous position. Data from the Office for National Statistics backs that up, with evidence that some households, particularly those with low incomes, have run down their savings over the past 12 to 18 months and increased their debt during the pandemic. We have to be keenly aware of that divergence as we emerge from covid.

As I walk around Barrow, Dalton or Ulverston in my constituency, I see the households that have spent some of the past year fixing up their gardens and houses—I have to say that I am a little jealous of them—and those who have allowed their houses to fall into disrepair. Of course, it is no official measure, but it is clear that in the same streets we are seeing families rubbing up against each other, some of whom are thriving and some of whom are struggling. Renters, parents, carers, disabled people and many of those who shielded over the past year are the people we must ensure are not left behind as we move through covid. We must be ready to ensure that that schism is not permitted to widen further or their debt burden to increase even more.

I pay credit to the Government for their significant efforts to support families through the pandemic. Furlough, the universal credit uplift, the national living wage increase, the local housing allowance uplift and the hardship fund are all measures that have not just kept families afloat but kept them going in these uncertain times. Extending the UC uplift was the right thing to do. I am grateful to the Chancellor and his team for listening to Back Benchers such as myself when we made the case for it, but we are about to go into a period of uncertainty. I would be very interested to hear the Minister’s views on what a further extension of that programme might look like and how it might support vulnerable people.

We are right to focus on jobs now—getting people into work, earning more and getting the skills they need to get back on the ladder. We should also look at the support schemes that are working and how we can support them. Christians Against Poverty is a great example, as is StepChange. Yet the fact remains that not everyone will be able to make the jump into a job, or to make it as quickly as others. A robust safety net has to be in place to support them, otherwise we are derelict and failing in our duty. The Kickstart and Restart schemes targeted at young people and those at risk of long-term unemployment will be key to that. I pay tribute to the Department for Work and Pensions team in Furness, which is working so hard and with great enthusiasm to deliver those schemes. Only a few days ago, my local DWP team announced that Lisa, our local youth work coach, will be working in a different office—in a place called Drop Zone in the centre of town—alongside local council officers, job providers and others. That visibility and change in circumstances is really innovative and great to see. I want more of that as we try to help those who really need it right now.

We cannot allow household debt to rack up. The Breathing Space scheme is welcome. Many of my constituents have sung its praises to me. It provides important short-term relief, and we must take this time to look at the principles behind it and how we can sympathetically help families who may be building up problem debt. I declare an interest as the former chair of the Barrow and District Credit Union, but I think there is a role that such organisations can and should play to help individuals and families as we emerge from this crisis. I hope that the Government will consider supporting them in order to support our communities more. They are well connected to debt advice charities, they work very closely with the local third sector and, perhaps most important in this regard, they help to steer people away from short-term lenders and loan sharks. In many ways, they are some of the very best parts of our civil society and some of the least known.

You will be relieved that I am coming to the end of my speech, Mr Bone. We have to be alive to the fact that gaps exist, and the road ahead for many of our constituents will be difficult, especially as we try to keep them out of debt. We have to rise to that challenge. Some of the issues related to this topic are crucial; they worry away at the fabric of our society. By focusing on debt, financial exclusion, dependency, loneliness and skills, we are providing people with a ladder. We have an opportunity to make a real and lasting change for those in our communities most in need. We have to grab that opportunity and take it.