What does the Queen’s Speech offer for people in debt?

By Mark Haslam, Public Affairs Officer

The Queen’s Speech yesterday set out the new Government’s priorities for the next two years. With no overall Commons majority, Theresa May’s programme was inevitably a narrow affair. Her main focus now will be Brexit-related laws — 8 of the 27 bills and draft bills related to Brexit— with a slimmed down domestic agenda.

Breathing Space disappointment

One of our main hopes for this year’s Queen’s Speech was a manifesto pledge to introduce a new Breathing Space protection. The proposal would help people in debt by giving individuals and families a safer way to get back onto a stable financial footing.

It was disappointing then that the pledge didn’t make it into yesterday’s royal address.

However, there’s strong public support for Breathing Space. Over 50 MPs pledged their support before the Election and a version of the pledge featured in both the Conservative and Labour manifestos. The political winds are behind a new Breathing Space protection and we remain hopeful it will be introduced.

The need for a new protection is clear. Households in temporary difficulties shouldn’t see their debts grow as they seek to stabilise their finances and resolve them. So we’ll continue to work with Government and the financial sector to see the Breathing Space policy implemented as soon as possible.

The Victorian-era laws governing logbook loans

One of the Bills we welcomed yesterday will overhaul Victorian-era laws governing logbook loans. These are a high risk form of borrowing where cars or other vehicles are used as security for the loan.

The Government is planning new rules to protect struggling borrowers and innocent third parties from the threat of repossession. The changes mean borrowers will get protection from the courts against a lender trying to repossess their car — so long as they opt-in to challenge the repossession. Innocent third parties will also gain protections.

The devil’s in the detail as always but this is a welcome modernisation of the law.

A new financial guidance body

Finally, the Financial Guidance and Claims Bill has been introduced. As expected it will establish a single financial guidance body with a remit to co-ordinate the provision of debt advice, money guidance and pension guidance.

We welcome the Government’s attention on the need to help more people in debt and it will be important that funding for specialist debt advice doesn’t get diluted or diverted by the merging of these three functions.

There are 2.9 million people struggling with severe debt problems right now. But debt advice is only provided for 1–1.25 million people. So instead, the new body should ensure that funding and resource is sufficient to meet the need. This will be crucial if the Government is to make good on its ambition for a strong economy and more just society.

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