To ask the Chancellor of the Duchy of Lancaster what discussions he has had with credit companies, banks and other financial institutions about his suggestion that they should fund independent agencies to provide free money advice and debt counselling services; what discussions he has had with organisations currently involved in the provision of advice services; and what responses he has received in each case.
I have had a number of meetings with representatives of the financial sector at which I have stressed the importance of money advice and encouraged the principle of companies and associations providing financial and other support to voluntary bodies concerned with the provision of money advice. It is for these bodies to seek support from industry for specific projects.As I said in my reply to the hon. Member on 9 March, a number of money advice support projects have already been funded by the private sector through the National Association of Citizens Advice Bureaux, and others. I hope that this trend will continue.
Does the Minister not accept that that is a wholly inadequate answer and a complete abrogation of responsibility on his part? Does he not accept that, in view of the insultingly light answer given by the Secretary of State for Social Services, who is doing so much to increase debt problems, the Government as a whole have a responsibility to take positive action? Will he take positive action to persuade those to whom he is passing the buck that they should make a significant contribution if he continues to refuse to do so?
For one thing, we already provide substantial support to the advice services. We support them to the extent of some £9 million for central services. That was increased specifically for the purpose of providing information on the new social security system. I already do a certain amount to persuade the financial services industry to provide support in the way that the hon. Gentleman suggests. I seem to have been persuasive, because a number of projects are going ahead.
I thank my hon. Friend for his reply. While I do not agree fully with the argument of the hon. Member for Cardiff, South and Penarth (Mr. Michael), may I ask my hon. Friend to accept that the problem of debt is growing, for reasons which are multiple and complex, and that it is an important part of the responsibility of the private sector, which is generally offering the debt, to take action in the public interest? Will he reinforce with the private sector the importance of its part, in conjunction with him and others, in dealing with the problem?
It seems to me that it is not only part of the responsibility of the private sector, but is very much in its commercial interest to provide support for money advice services. The more people who are helped to resolve their debt problems, the more money will be recovered by those who lent money in the first place. Advice services to those bodies concerned with giving money advice might find it useful to approach, for example, the utilities which supply fuel on credit, which forms part of most people's debt problems.
Why should there be different laws for people and for banks in relation to debt? Why should banks be able to to go to the Inland Revenue and say. "We have run into trouble with debts abroad; can you give us £1 billion to spread among the top four banks?", while ordinary people who have got up to the neck in debt because of Government policy are told that they will have to find another loan? It is no wonder that the residual income which goes in debt payments for every family in Britain has risen to over 80 per cent., whereas it was just over 40 per cent. in 1979. We have a Prime Minister who preaches thrift and no borrowing, yet the country is up to the neck in debt.
For the vast majority of individuals, the increase in credit that has undoubtedly taken place has been wholly beneficial. It has enabled them to even out peaks and troughs in their household budgeting. I repeat that it has been wholly beneficial. But for a small minority of people, debt problems arise. It is for such purposes that money advice services exist.