Affordable credit and debt relief measures in Budget welcomed by Worcester MP

Robin Walker, MP for Worcester, has welcomed measures announced by the Chancellor Philip Hammond in yesterday’s Budget to support affordable credit and provide a ‘breathing space’ for people in debt.

Following the work of the Financial Inclusion Policy Forum, the Chancellor announced a series of new policies to help households manage unexpected costs by increasing access to fair and affordable credit, as well as consulting on a breathing space scheme for people who fall into problem debt.

Support for the credit union sector was announced with the launch of a new prize-linked saving scheme with the aim of boosting awareness and membership of credit unions, as well as helping people increase their financial resilience.

The Chancellor also pledged £2million in funding for an Affordable Credit Challenge Fund, harnessing the power of the UK’s world-leading Fintech sector to provide innovative technological solutions in support of social and community lenders.

Meanwhile, the Treasury will simplify regulations making it easier for Social Landlords to direct their tenants to sources of affordable credit, and away from high-interest lenders. A pilot scheme is also due to be launched providing no-interest loans to those unable to access high street or community credit schemes. This follows the success of a similar scheme in Australia which succeeded in drawing users of high-cost credit and illegal loan sharks towards more affordable alternatives.

The Budget also promises a consultation on a debt ‘breathing space’ offering a 60-day period of protection from bailiffs to help people make plans to pay back their debts in a sustainable way.

Commenting on the new announcements, Robin said:

“As a long-standing supporter of affordable lending and former chair of the All Party Group on Credit Unions, I wholeheartedly welcome these measures that will provide a much-needed boost to the community credit sector and hopefully help the benefits of credit unions reach a much wider audience.”

“The introduction of a 60-day breathing space scheme for those with problem debt is also a very welcome move, and one which I have no doubt will bring some relief from what can be immense pressure on people to seek high-interest payday loans in order to repay creditors quickly. I have long believed that the introduction of such a scheme would give people the time to fully consider their options and seek expert help and advice – from their local Citizens Advice Bureau or credit union – in order to reach a decision on repaying their debts in a sustainable way.”

ENDS

Notes to editors

For full details on the 2018 Budget, see https://www.gov.uk/government/topical-events/budget-2018

For details of the consultation on a debt breathing space scheme, see https://www.gov.uk/government/consultations/breathing-space-scheme-consultation-on-a-policy-proposal

For Robin’s previous statements on debt and affordable credit, see:

http://www.walker4worcester.com/category/campaigns/affordable-credit/

http://www.walker4worcester.com/?s=credit+unions