Lockdown 3: the urgent steps now needed
By Richard Lane, Director of External Affairs
So, on day five of the New Year, here we are in national lockdown, right across all the countries of the UK. For people facing problem debt — and don’t forget, there are twice as many now than as at the start of the pandemic — that means more problems, and few solutions.
Previous research from us and others has laid bare the kind of problems we mean: lower income coming into many working households; higher costs facing many households; lack of school and childcare making it harder even for those who have jobs to do them; and administrative difficulties in attempting to deal with financial matters as a result of reduced staffing levels within many firms.
For those with the most acute problems, we are looking at people missing meals; sitting shivering in the cold because they are rationing utilities to try to make ends meet; people facing the prospect of bailiffs or rental evictions, and worrying about losing their homes during winter, during lockdown.
None of this is new news, but the return to national lockdown will increase and deepen these problems — and so raise the urgency of solutions to ensure that the financially vulnerable can get through a longer period before wider recovery can realistically be expected.
The government and regulators continue to implement a range of support measures, and we have no doubt that there will shortly be further announcements and clarifications which are likely to be helpful — hopefully with a focus on those areas where most harm is building.
But still, there are some obvious gaps and silences that we would like to see filled, without delay, bringing more relief and certainty to large swathes of the population who are genuinely worried about how they will get through this period financially.
Specifically, as we have outlined in our earlier reports, lockdown 3 now throws into sharp relief that we need to see:
1. The temporary weekly £20 uplift in Universal Credit made permanent — and more write-offs of legacy deductions to reduce the risk of people finding it impossible to claw their way out of being unable to make ends meet
2. No rent or mortgage evictions during lockdown — and realistic, affordable payment and support schemes for individuals and landlords/lenders to avoid people losing their homes over the longer term
3. An end to bailiff activity during lockdown — and a “build back better” approach that fundamentally reforms how bailiff activity is regulated afterwards
4. Greater recognition of where there are still significant gaps between people’s realistic needs and the support available for them — especially for the self-employed; for parents whose work/caring responsibilities conflict; and for those who cannot afford the costs of isolation and quarantine, even if they feel unwell or are told to isolate
5. A balance of support for businesses, local councils, and individuals — built around a no-interest loan repayment scheme delivered through a recovery fund, recognising that some debt write-offs, for some people, in some circumstances, are likely to be the most pragmatic and lowest cost way of resolving difficulty
We know that policymakers are aware of these problems. We know creditors are operating workarounds. We know that by deferring payments, we can “kick the can down the road” to a degree, in the hope of better times to follow. But what we don’t know is exactly what joined-up strategy the government may or may not be planning to deal with these problems in the round.
If the virus has shown us anything, it is surely the merits of the mantra “hope for the best; expect the worst.” We now need to see the joined-up strategy that delivers against that for the benefit of the most sorely affected citizens whose debt has grown along with the Covid numbers.