Income Tax (Charge)

Yvonne Fovargue Excerpts

Thursday 4th March 2021 Commons Chamber

[Yvonne Fovargue (Makerfield) (Lab) [V]]

As chair of the all-party parliamentary group on debt and personal finance, I welcome many of the measures to alleviate people’s income problems during this time. However, the question remains: what happens when the support ends and millions of people potentially face a cliff edge?

Although some people have been able to increase their savings and have paid off debt, poorer households always suffer disproportionately during hard times, and the pandemic has widened that gap. People on lower incomes pay more for essential products—including energy, credit and insurance, to name just three—and are also likely to pay more to access their cash. I will return to that shortly.

I welcome the retention of the £20 weekly uplift to universal credit, but I believe it should be made permanent and extended to legacy benefit payments. The pandemic has raised awareness of the relatively low level of benefits, and it is not just charities and faith groups that believe that the amount should be increased; it is also the general public. There are other issues, including the five-week wait, the two-child limit and the benefit cap, and I also urge that loans be converted to grants, because paying back from an already low income causes great hardship.

The level of the self-isolation payment of statutory sick pay has also caused problems. Many people are unable to afford to self-isolate in order to limit the spread of the coronavirus. They want to do the right thing, but they have to balance that with the cost to their family, and that can prove to be an impossible decision.

I am pleased that the Chancellor has brought in and is going to pilot the no-interest loan scheme. I will follow it with great interest and I hope that it will be implemented as soon as possible. However, there are many people who will have little or no chance of paying any loan in the medium or long term and who are already deeply in a spiral of debt. More research should be done on the effects of this on individuals and families, and on ways in which they could be helped, which may include debt write-offs. These are unprecedented times and we will need unprecedented solutions.

I also believe that private renters have been disproportionately hit. They need a targeted financial package to help them pay off arrears built up during the first lockdown. It would help people stay in their homes and keep away the human and financial cost that evictions would bring.

In his last Budget statement, the Chancellor promised to protect access to cash by introducing legislation. We now hear that he believes that the matter is best dealt with by the Financial Conduct Authority. If I may mix my metaphors, he is both washing his hands of it and kicking it into the long grass. A considerable minority of the public prefer to use cash. It is impossible for them to overspend if they use just the money in their purse. On Monday, we learned that half of Britain’s cash machines could close unless banks are forced to support them. The Chancellor must step in and show the Government’s commitment to cash by forcing the banks to pledge to a five-year deal to allow the Post Office to invest in its banking service and to allow Link to manage its national network.

The pandemic was like an earthquake, disrupting the finances of millions of people. What we now have to do is ensure that it is not followed by a tsunami of debt that will engulf the most vulnerable.