Monday, 7 April 2014

HELPING WITH PERSONAL DEBT

One of the challenges of economic growth is to make sure everyone benefits. It is why the reforms to the benefits system so that work pays are so important and also why we need intensive support to help those who have been out of work for a long time get their confidence back. It's also why we need to maintain momentum when it comes to local regeneration.

We also need to recognise the demoralising affect that personal debt can have on those on the bottom rung and it isn’t just those on benefits. Many people who work hard also have debt problems and shouldn't be overlooked. It can start with a one off bill like a repair to the car or an unexpected tax bill but end up with court costs and thuggish bailiffs at the door adding huge cost and stress. Some people turn to loan sharks or payday loan companies who seem to offer a quick fix but actually end up compounding the problem. There are few things more demoralising to people than having bills and debts that stalk them.

There is good work being done to help. The Citizens Advice Bureau regularly offers debt advice to those at their wits end. In extreme cases they can help people apply to the court for a Debt Relief Order to remove some of the burden. Last week I met the local organiser for Christians Against Poverty to discuss their work locally. CAP was founded by someone who had worked in finance but then suffered his own debt problems. Volunteers with experience visit families at home and help them put together a budget. If there are difficult debts overhanging them, CAP will manage the relations with those companies, sometimes securing a write off of some of the debt and a consistent payment plan which they manage on behalf of the family. Their service is free to those in need.

In 2012 the Government set up the Money Advice Service with the key objective to encourage people to better manage their money and prevent them from getting into unmanageable levels of debt. The MAS offers free and impartial information on money matters and they can be contacted online, by telephone or even face-to-face. There has been a crackdown on loan sharks. The Financial Conduct Authority is strengthening the rules, by making sure payday loan companies research whether their clients can actually pay back the money and is also considering a cap for the loans.

There are better ways for people to manage their money. Two years ago I became a member of the Kernow Credit Union. Unlike other lenders they don't judge people through credit agencies. Those who are in greatest need know that "subject to status" means "not you." With a credit union people earn their credibility. Those who save regularly each month can, after three months, borrow around three times the amount they have saved.

George Eustice can be contacted at george.eustice.mp@parliament.uk or 1 Trevenson Street, Camborne, Cornwall TR14 8JD or by telephone on 020 72197032.