Jim Shannon – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Jim Shannon on 2016-02-02.

To ask Mr Chancellor of the Exchequer, what steps the Government is taking to reduce levels of family debt; and what assessment he has made of current tends in those levels.

Harriett Baldwin

In Q3 2015 household debt fell to 142 per cent of household income, down from its peak of 168 per cent in Q1 2008. The Government’s plan for a higher wage, lower welfare society makes it easier for families and working people to save, and includes the new National Living Wage which will mean a pay boost for 1.7 million workers this year.

Nonetheless, the Government recognises that there are those who face problem levels of debt. The Money Advice Service (MAS) is responsible for the coordination of publically funded free to client debt advice and is financed by a levy on the financial services industry. MAS is currently consulting on its business plan; it has proposed levying for a constant debt advice budget for 2016/17 providing around £45 million.

The Government is currently reviewing how the public provision of free-to-client, impartial financial guidance, including consumer debt advice services, should be structured. The Public Financial Guidance consultation closed in December 2015 and the Government will report back by budget.

Additionally, we have created the independent Financial Policy Committee within the Bank of England, to ensure emerging risks and vulnerabilities across the financial system as a whole, including in relation to household debt, are identified, monitored and effectively addressed.