Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he plans to take to support families that have experienced an increase in their household debt as a result of the covid-19 outbreak.

The Government has delivered unprecedented support for living standards during this challenging time, protecting livelihoods with the Self-Employment Income Support Scheme, the Coronavirus Job Retention Scheme, and temporary welfare measures amongst other support.

With the resurgence of COVID-19, the Government has extended the Coronavirus Jobs Retention Scheme until 31 March 2021. Eligible employees will continue to receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The Government has increased the overall level of the third grant under the Self-Employment Income Support Scheme to 80 per cent of average trading profits, meaning that the maximum grant available has now increased to £7,500.

The Government has made changes to the welfare system worth £9.3 billion according to recent OBR estimates. This includes a £20 per week increase to the Universal Credit standard allowance and Working Tax Credit basic element.

To support renters, the Government has provided a nearly £1 billion increase in Local Housing Allowance Rates and has increased notice periods to six months in all but the most egregious cases, and this will remain in place until at least the end of March 2021. This means that renters now served notice can stay in their homes over winter. Evictions will not be enforced whilst national restrictions are in place over the Christmas period (until 11 January 2021 at the earliest), except for the most egregious cases such as anti-social behaviour.

To support people who may struggle to meet their council tax payments this year, the Government has provided Local Authorities with £500 million. The Government expects that this will provide all recipients of working age local council tax support with a further reduction in their annual council tax bill of £150 this financial year.

Earlier this year, the Government worked quickly with lenders and the Financial Conduct Authority (FCA) to give people access to payment holidays on their mortgages and consumer borrowing. This is giving consumers a much-needed respite period, in which no repayments are due on these credit products.

Draft guidance announced by the FCA earlier this month sets out that payment holidays of up to six months will continue to be available to mortgage and consumer credit borrowers who have been impacted by COVID-19 until at least 31 January 2021. Those how have already taken six months of payment holidays and who continue to experience payment difficulties should speak to their lender to agree tailored support.

The Government recognises that despite these strong protections, some people are struggling with their finances at this challenging time. To help people in problem debt get their finances back on track, an extra £37.8 million support package is being made available to debt advice providers this financial year, bringing this year’s budget for free debt advice in England to over £100 million.

In May, the Government also announced the immediate release of £65 million of dormant assets funding to Fair4All Finance, an independent organisation that has been founded to support the financial wellbeing of people in vulnerable circumstances. The funding is used to increase access to fair, affordable and appropriate financial products and services for those in financial difficulties.

And from May 2021 the Breathing Space scheme will offer people in problem debt a pause of up to 60 days on most enforcement action, interest, fees and charges, and will encourage them to seek professional debt advice.