Earlier this week I organised a mini conference in Redruth with local charities and other groups to discuss proposals to tackle the problems caused by personal debt. We had a number of key speakers from successful projects to discuss the scale of the problem and also outline solutions.
There is now good news on the economy with unemployment falling rapidly and we now have the fastest rate of growth in any major industrialised country. But one of the challenges is making 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.
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, a bill from the Child Support Agency or an unexpected tax demand but it can all 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. People feel despair and can't see light at the end of the tunnel because the fees and financial demands on them completely outstrip their income.
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. Earlier this summer 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.
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.
Finally, I think we need to develop a more enlightened approach to credit control when it comes to utility companies and local authorities. Rather than sending reminder letters and then instructing a bailiff to chase the debt, it would be better by far to spend money on debt advisers instead so that we help people get out of the hole they are in rather than hit them when they are down.