Debt Advice (Hansard, 31 October 1990)

§ 3. Mr. Michael J. Martin
To ask the Secretary of State for Trade and Industry what plans he has to increase spending on debt advice work.

§ The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood)
Much of this work 972 is done by local citizens advice bureaux, which are funded by generous Exchequer grant, of which the House will hear shortly this afternoon. The Department of Trade and Industry funds centrally the National Association of Citizens Advice Bureaux and Citizens Advice Scotland to the tune of £11 million in the current year.

§ Mr. Martin
I understand that the Minister wished to encourage building societies and other financial institutions to put money into the fund that he set up, but that they have failed to do so. Is not it a cheek that those institutions, which send junk mail to almost every person who has a bank account encouraging them to get into more and more debt, are not prepared to finance the advice given to people who are in serious difficulties? Will the Minister use his good offices to ensure that building societies and banks do more in this respect?

§ Mr. Redwood
The private sector is already responding to the idea that it should help to finance schemes with local citizens advice bureaux, and the Government welcome that. I have explained that generous Government moneys are being paid through the local authority system to help with that work. Individual Members of Parliament can advise constituents who are in trouble that they should go immediately to the building society that gave them a mortgage and talk through their problem in good time, because often the building society can find a way of easing payments during a period of difficulty for the family. That is the best answer.

§ Mr. Hill
My hon. Friend is right that citizens advice bureaux do much work in dealing with this difficult matter. Is he aware that citizens advice bureaux in my constituency have perhaps more work than most in respect of credit and that they face difficulties in working within the budget that my hon. Friend outlined?

§ Mr. Redwood
It is for each local authority to decide the right level of funding for its citizens advice bureaux. Some local authorities are increasing the budget for CABs because they think that they do important work, but that is a matter for local determination. In several parts of the country, there are money advice support units funded by private sector initiative, led by companies ranging from Mercantile Credit through Barclaycard to a consortium working in Greater Manchester, and they, too, are helpful.

§ Mr. Nigel Griffiths
Does the Minister realise that more than 2.25 million households are in debt, that we have had a decade of debt and bankruptcies and that the Government have been encouraging spenders, not savers? When will the hon. Gentleman stop being the irresponsible lenders' lackey?

§ Mr. Redwood
That is complete nonsense, and the hon. Gentleman knows it. The Government have taken many measures to stimulate saving, with the welcome effect that the savings ratio has been increasing. As for serious debt problems, the hon. Gentleman may like to know that in the year to June 1990, the number of repossessions was only one third of 1 per cent. of the total stock of mortgages. That still means individual problems, and I have suggested to the House ways in which they can be resolved through the advice of debt advisers and Members of Parliament acting for their constituents.