Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020

Lord Blunkett Excerpts

Tuesday 6th October 2020 Lords Chamber

[Lord Blunkett (Lab)]

My Lords, I declare an interest regarding my work with alternatives to payday loans. Everyone taking part in this debate will be in favour of the modest but important measures encapsulated in these revised regulations. They are the very least we can do, given the enormity of the impact of the Covid-19 pandemic. The Government should now take two steps.

First, the Government should bring forward the implementation date from May to January. I take the Minister’s point about preparation, but many things have changed over the last eight months. People have moved more quickly than they could ever have envisaged in changing the way they operate, drawing on expertise they did not know existed. Three months would be a perfectly adequate time to get our act together nationally and locally and to implement the scheme. Secondly, consideration should again be given a register of independent advisers, because it is already clear that many unprincipled people are prepared to take advantage of what is now a tsunami of debt for individuals and companies.

Debt, by its very nature, is not deferment for ever: as the Government will find over the years to come, it is deferred repayment. For individuals and businesses across the country, including those that have taken out bounce-back loans, the day of reckoning eventually comes and it is really important that we are in a position to understand how best to schedule their repayments over a manageable period, so that their other outgoings are not affected and their livelihoods are not destroyed.

I heard a woman on the radio in the last two days saying that she was making impossible choices about whether to keep a roof over her head or to eat. She had chosen to keep a roof over her head. Other people do not, and there are knock-on consequences. I know a small company that refurbishes and then rents out houses; these are not always the most popular kind of people in my party, but I put this out as a real possibility for action across the country. This company has reached an agreement with Sheffield City Council in effect to become a social landlord. It refurbishes, maintains and is responsible for the property. The council is responsible for the tenant and the rent due, and therefore for supporting and helping that tenant to continue to pay their rent and to have a roof over their heads.

That kind of collaborative deal is something that I believe we should look at urgently. There will be hundreds of thousands of people, both those renting and those with mortgages, who find themselves in enormous difficulty. Some will do what my grandfather described as “a midnight flit”. Simply, that means that they up and go without paying anything they owe and try to make a new life somewhere else. That is already happening.

My other point is how much we can build on the work of Money and Mental Health and the campaigns that it and many others have run, such as tackling the threat that people face in the kinds of approaches that are made, the letters they receive, the knock on the door. Again, I heard someone just in the last 48 hours talking about their 16 year-old daughter being confronted at the door with a bill for £2,000. There is an enormous amount here to build on. The Government need to be sure-footed and extremely willing to put aside previous determinations of timing and methodology and, instead, work with all those who are willing to do so. They need to ensure that this debt crisis—that is what it is—does not become a prolonged crisis that destroys the livelihoods, living space and well-being of people across the country.