Debt Counselling: Funding (Hansard, 7 December 1992)

§ Baroness Denton of Wakefield
My Lords, the Government's grant-in-aid to the National Association of Citizens' Advice Bureaux, Citizens' Advice Scotland and the Northern Ireland Association of Citizens' Advice Bureaux has increased over the past five years from £9 million in 1987–88 to around £13 million in 1991–92—an increase in real terms of almost 5 per cent. A breakdown of how much of that grant-in-aid is spent by those bodies on personal debt counselling is not available.

§ Lord Ashley of Stoke
My Lords, I believe that very little of that grant is spent by CABs on debt counselling because they have other responsibilities. Is the noble Baroness aware that last year no fewer than 1.7 million people approached the CAB with debt problems, some of them very serious indeed, and that not all of those people were the traditionally poor? In view of the great hardship involved does the Minister agree that the £1 million given by the credit industry on a voluntary basis is totally inadequate? Will she urge the Government to impose a levy on the credit industry and to match it pound for pound in view of the Government's own responsibility for this very sad state of affairs?

§ Baroness Denton of Wakefield
My Lords, I believe that the citizens' advice bureaux are involved greatly with debt counselling. NACAB has established some 18 money advice support units. We fully recognise the depth of the problem out there, but we do not believe that a statutory levy is the answer. The Government believe that a voluntary scheme of contributions is the right way forward and that such a scheme would react more readily to changing circumstances.

§ Baroness Gardner of Parkes
My Lords, is my noble friend aware that the building societies—I speak as a director of the Woolwich—have contributed to the Money Advice Trust? We have given £50,000 for three years. Is my noble friend aware that most building societies, both large and small, are providing help to debt counselling services on a voluntary basis?

§ Baroness Denton of Wakefield
My Lords, I am pleased to acknowledge that we are well aware that many building societies and other financial institutions are taking their responsibilities in this area very seriously. Their activities should not be counted solely in money terms but also in terms of the provision of secondees and other support.

§ Baroness Faithfull
My Lords, is my noble friend aware that many voluntary organisations give debt counselling, particularly, for example, the Birmingham Settlement which operates in a very poor area of Birmingham?

§ Baroness Denton of Wakefield
My Lords, I thank my noble friend for drawing the attention of the House to the invaluable work done by the Birmingham Settlement. We were pleased to see its skills and knowledge extended to the business sector.

§ Lord McGregor of Durris
My Lords, does the Minister agree that part of the present trouble goes back to the failure of the Government to implement the recommendations of the Payne Committee on the enforcement of judgment debts? It is my recollection that the committee reported at the end of the 1960s. It recommended the establishment of a central debt office to handle debts in all courts, associated with debt counselling to enable debtors to fulfil their obligations. Is the Minister aware that the failure to establish such a body as an integral part of the handling of debt by the courts is the origin of the present difficulties?

§ Baroness Denton of Wakefield
My Lords, I draw the noble Lord's attention to the fact that the Question relates to what we are doing now, and that was what I was able to tell the noble Lord, Lord Ashley.

§ Lord Monkswell
My Lords, are the Government aware that local authorities also provide personal debt counselling services? Are they aware too that the pressure on those services has escalated significantly as a result of the introduction of the poll tax, which created enormous difficulties in personal debt terms for local inhabitants? Is the Minister aware that the introduction of the council tax will not significantly 8 lessen that burden? Will the Government make money available to local authorities to improve and enhance services in relation to personal debt counselling?

§ Baroness Denton of Wakefield
My Lords, the Government are well aware of the work of local authorities in this area. However, we believe—and there is evidence that this is also the view of your Lordships' House—that it is for local authorities to decide local priorities in the light of local needs and resources. I draw your Lordships' attention to the fact that local authority funding has risen over the five years in real terms by more than 50 per cent.

§ Lord Peston
My Lords, will the Minister clarify her Answer? The Question on the Order Paper asks how much money HMG have contributed directly. I take it that her answer to that Question is nought. Indirectly, the Government have contributed money to the citizens' advice bureaux, namely a 5 per cent. real increase, to deal with a problem which has shown a massive increase. Again, 5 per cent. is not much more than nought. Therefore, the straightforward answer to the Question is nought or nearly nought rather than the rigmarole in which the noble Baroness engaged.
In relation to voluntary contributions, is it not the case that the sum which it is suggested is needed by the Money Advice Trust is £9 million while the money contributed so far by the building societies in their beneficence is about £350,000 which, relative to £9 million, is again close to nought? Is it not about time that the Government took responsibility for the problem which they themselves have caused and decided to contribute a considerable amount of money?

§ Baroness Denton of Wakefield
My Lords, I am sorry that the noble Lord, Lord Peston, did not understand my first Answer. The moneys available were increased from £9 million to £13 million, through the bodies which are providing the debt counselling. The reason we cannot break that figure down is that the way in which those bodies balance their own requirements locally is a matter for them. I would also point out, as I tried to make clear in an earlier answer, that the Money Advice Trust has had support from the voluntary sector in both money and kind of over £1 million; it was looking for £3 million.

§ Lord Ashley of Stoke
My Lords, is the noble Baroness aware that we understood her first Answer only too well? I am driven to the conclusion that the Government simply do not understand and realise the magnitude of the debt and the fear, anxiety and genuine disorientation of thousands of people. I deplore her Answer. I hope that she will be able to think again on the issue.

§ Baroness Denton of Wakefield
My Lords, I should like to reassure the noble Lord that we do understand the problem. We believe that one of the jobs of government is to endeavour to work at the front end of the debt problem to make sure that it is not repeated and does not grow. We shall look at areas such as the new research that will come through Money Advice to see where further work can be done.