Motion to Approve
My Lords, the regulations before us today will establish a breathing space scheme for individuals who live in England and Wales. This is a temporary period of respite from creditor action to help people in problem debt consider their options and engage with professional debt advice. To many in this Chamber, the scheme will need no introduction, as noble Lords were the driving force behind amendments to the Financial Guidance and Claims Act 2018, under which the Government present these regulations today. Since then, of course, the Government have had to make unprecedented policy interventions to save jobs and support livelihoods due to the impact of Covid-19, so the need for this scheme is even more pressing.
A breathing space—or, to use the term in the regulations, a moratorium—will pause most enforcement action, creditor contact, and interest and charges on a person’s qualifying debts. There are two kinds of moratorium. The first, a breathing space moratorium, lasts for 60 days and is open to anyone who engages with debt advice and meets the eligibility criteria. The second, a mental health crisis moratorium, available where a person is in mental health crisis treatment, extends those protections for as long as that treatment lasts, plus 30 days.
Professional debt advice providers have a central role in the scheme. They can initiate a moratorium for anyone who meets the relevant eligibility criteria and conditions. They should not do so if it would be inappropriate—for example, if their client could go into a debt solution like an IVA or bankruptcy straight away, or if they could manage their finances without a moratorium. There are other important safeguards to ensure that clients are complying with the scheme’s rules as far as possible. For example, certain ongoing liabilities such as a mortgage or rent must be paid as they fall due during a breathing space moratorium. If they are not, or if the client is not engaging with debt advice, the debt adviser can decide whether the breathing space moratorium should continue.
Of course, the Government recognise that, during mental health crisis treatment, it will be harder to engage with debt advice in this way and that it may be less reasonable to expect the individual to keep up specific obligations on them. The scheme anticipates this, with alternative access for people in mental health crisis treatment to a moratorium with equally strong protections that last longer, and where the conditions on the debtor are relaxed. This type of moratorium can only be accessed once an approved mental health professional has certified that a person is in crisis treatment. The debt adviser need not provide advice directly to the person but will still check that the relevant eligibility criteria are met and that an AMHP has provided the necessary evidence. A breathing space moratorium can only be accessed once every 12 months, but there is no limit to the number of times that a person can enter a mental health crisis moratorium.
I will now move on to implementation and begin by addressing the recommendations made by the Secondary Legislation Scrutiny Committee. It recommended that the Government consider establishing a comprehensive debt adviser register. Access to professional debt advice is crucial, but our view is that instead of creating a new register, this can be best achieved by working with the Money and Pensions Service and other stake- holders to clearly direct people to free debt advice provision, including on GOV.UK and via MaPS’s existing online tools. In its most recent report on the regulations, the committee also suggested that the Government should bring forward the start date for the scheme to earlier than May 2021, in response to Covid. Simply making the regulations does not give effect to the scheme’s protections; creditors large and small need time to change their systems and debt advice providers need to plan and train their staff. This is against the backdrop of everyone making unprecedented efforts to help people affected by the financial impact of Covid. While the Government appreciate the committee’s intent, they are firmly of the view that May 2021 is ambitious but achievable. The Government continue to work to support implementation next May, and detailed scheme guidance is to be published by the end of this year.
Beyond the committee’s recommendations, there are other areas of implementation that I would like to bring to noble Lords’ attention. A barrier to individuals seeking help with debts can often be fear of the impact any intervention will have on their credit score. The Government have considered this issue carefully. Debt advice providers need clarity on this to advise their clients, and the Government are mindful to avoid unintended consequences for debtors and creditors in the scheme. A moratorium is not a payment holiday or a payment deferral scheme. Other than pausing interest and fees, no new arrangements are made regarding the debts protected in a moratorium, so the Government do not consider it appropriate to ask creditors to pause reporting to credit reference agencies. Credit files take up to 50 days to update, so the impact on an individual during the 60-day moratorium would in any case be limited.
The Government have also considered whether it would appropriate to seek a new flag or code to show a breathing space on a credit file. This could have longer-lasting effects and, in the mental health crisis moratorium, sensitive information about a person’s treatment could be inferred from credit files. This is not acceptable. We therefore propose that creditors should continue to report payments in line with their existing arrangements, encouraging payments to continue during the moratorium wherever possible. The Government will keep this position and its effects under review.
The breathing space scheme will encourage people to engage with professional debt advice and create the necessary space for them to make better decisions based on that advice. Importantly, it will also protect people receiving mental health crisis treatment until they are more able to engage in this way. I hope we can agree that these regulations are a positive step forward in an area that has long been important to many in this Chamber, with the potential to change lives. I beg to move.
My Lords, I declare an interest regarding my work with alternatives to payday loans. Everyone taking part in this debate will be in favour of the modest but important measures encapsulated in these revised regulations. They are the very least we can do, given the enormity of the impact of the Covid-19 pandemic. The Government should now take two steps.
First, the Government should bring forward the implementation date from May to January. I take the Minister’s point about preparation, but many things have changed over the last eight months. People have moved more quickly than they could ever have envisaged in changing the way they operate, drawing on expertise they did not know existed. Three months would be a perfectly adequate time to get our act together nationally and locally and to implement the scheme. Secondly, consideration should again be given a register of independent advisers, because it is already clear that many unprincipled people are prepared to take advantage of what is now a tsunami of debt for individuals and companies.
Debt, by its very nature, is not deferment for ever: as the Government will find over the years to come, it is deferred repayment. For individuals and businesses across the country, including those that have taken out bounce-back loans, the day of reckoning eventually comes and it is really important that we are in a position to understand how best to schedule their repayments over a manageable period, so that their other outgoings are not affected and their livelihoods are not destroyed.
I heard a woman on the radio in the last two days saying that she was making impossible choices about whether to keep a roof over her head or to eat. She had chosen to keep a roof over her head. Other people do not, and there are knock-on consequences. I know a small company that refurbishes and then rents out houses; these are not always the most popular kind of people in my party, but I put this out as a real possibility for action across the country. This company has reached an agreement with Sheffield City Council in effect to become a social landlord. It refurbishes, maintains and is responsible for the property. The council is responsible for the tenant and the rent due, and therefore for supporting and helping that tenant to continue to pay their rent and to have a roof over their heads.
That kind of collaborative deal is something that I believe we should look at urgently. There will be hundreds of thousands of people, both those renting and those with mortgages, who find themselves in enormous difficulty. Some will do what my grandfather described as “a midnight flit”. Simply, that means that they up and go without paying anything they owe and try to make a new life somewhere else. That is already happening.
My other point is how much we can build on the work of Money and Mental Health and the campaigns that it and many others have run, such as tackling the threat that people face in the kinds of approaches that are made, the letters they receive, the knock on the door. Again, I heard someone just in the last 48 hours talking about their 16 year-old daughter being confronted at the door with a bill for £2,000. There is an enormous amount here to build on. The Government need to be sure-footed and extremely willing to put aside previous determinations of timing and methodology and, instead, work with all those who are willing to do so. They need to ensure that this debt crisis—that is what it is—does not become a prolonged crisis that destroys the livelihoods, living space and well-being of people across the country.
My Lords, I welcome the opportunity to speak in this debate, and I broadly and warmly welcome the provisions in these regulations. While the effects of the pandemic certainly give increased importance to these provisions, the issues are, of course, of very much longer standing. I pay tribute to organisations, including the Children’s Society, which have long campaigned on these matters, as well as to the honourable Member for Rochester and Strood, Kelly Tolhurst, my own Member of Parliament, who, before she was made a Minister, proposed a Private Member’s Bill in the other place to address some of these issues.
It is estimated that 2.4 million children in England and Wales live in households with problem debt. Some 600,000 families spend more on overdue bills than they do on food. This issue has devastating social consequences for families and for wider communities, as well as for businesses, contributing significantly to mental ill-health, homelessness and relationship break- down. The matter is urgent.
Therefore, in welcoming these regulations, I want to touch on the implementation date. If it is not possible to bring this forward, I urge that it is not delayed, despite any issues there may be about implementing it. Rather, that date should be protected with vigour. I also urge that serious attention be given to connecting this with other policies and provisions to support those, especially families, experiencing debt and financial crisis. The noble Lord, Lord Blunkett, has already referred to the connection with housing issues, and there are others.
It is encouraging to know that there is support for these provisions from within the enforcement sector, and to read about some of those organisations’ guidance to their staff on how they should act properly and in accordance with humanity and with these regulations. I applaud, and am a committed supporter of, organisations in the debt advice sector, many of them charitable. I am pleased and proud to see many lay people within congregations in my diocese volunteering to be trained as debt advisers, many of them with backgrounds in the financial world. Also, a number of churches host debt advice centres, many under the umbrella of CAP— Christians Against Poverty—an organisation with a long track record in debt advice. These and other such institutions and initiatives will need to be sustained, and of course funded, if these regulations are to achieve their intent.
I have a handful of concerns or questions to raise. It is good that benefit and council tax debt is included in the definitions of debts to be covered by these regulations. I hope, however, that Her Majesty’s Government might think again about the exclusion of debt that arises from advance payment of universal credit. Such debts are not insignificant and, again, can contribute to the problem. The 60 days provision is, of course, welcome; I believe that it is an extension from an earlier proposal. However, I would welcome some assurance from the Government that this will not be reduced in any future review of these regulations.
It is important that those delivering this scheme locally are able to refer indebted people to other sources of support and sound advice, whether from local authorities or from within the charitable sector or other places. Clear guidance about this for debt advisers—those who are offering the advice—would be incredibly useful. That is probably not something for government to mandate in detail, but rather to make sure that it happens in particular local areas so that people can be clearly signposted to organisations that can support them beyond the debt advisers themselves.
I am sure that this is not the last time we will debate these issues; the current circumstances mean that debt will continue to be an issue on the national agenda. However, I welcome these regulations as a good step in the right direction.
My Lords, I declare my interest as a founder member of the Mental Health Act commission back in the 1980s. It is because of that interest that I wish to concentrate my remarks today mostly on the aspects of the regulations that refer to mental health.
I am sure we all appreciate that debt and mental health are a bit of a vicious circle. Worrying about finances and having limited capacity, and possibly limited assistance, in dealing with money matters can exacerbate mental illness, often to the point of triggering a crisis. It follows that a person’s critical mental state means that managing finances becomes an impossible burden. I therefore welcome these proposals, which, despite applying only in limited circumstances, bring some relief to a number of those in receipt of critical treatment throughout the period in which that treatment is necessary. This breathing space is important. However, it should not be regarded as just a delay to the inevitable but as an opportunity for resolution of outstanding pressures.
I am a little disappointed that the second part of the proposals, for a statutory debt repayment plan, is not being introduced at the same time. Indeed, no date has yet been suggested by the Government. Can my noble friend the Minister give us any indication as to when those proposals might be introduced, and what, if any, problems are preventing a date being set? A moratorium of limited time and scope, without these additional provisions, may just kick the can down the road, especially if other assistance is not fully deployed in the meantime. As these first proposals are now to come into effect in May next year, speed in completing the other provisions is essential.
The Financial Guidance and Claims Act 2018, to which my noble friend the Minister has referred, provides us with the powers that we are examining and which are needed to obtain debt respite, but without a wider scheme in place we are taking risks in proceeding with this element alone. They surely rely on each other to have the best chance of success. For those who are not currently under mental health crisis treatment, the regulations set out the means whereby they can get advice, as well as the criteria and qualifications needed by those who give such advice and have the powers afterwards to trigger a moratorium, pending, I hope, some settlement of the issues. Is my noble friend happy with the qualification requirements for those entrusted with those responsibilities?
Even with great care, the process itself can be daunting to anyone with a mental illness. The specific exclusions of certain categories of debt under regulation 5(4) are difficult to understand, especially if they currently include universal credit allowances and third-party deductions or if a VAT-registered business is involved. While the regulations are otherwise reasonably clear, some people may regard any moratorium as cover for all their debts at the time, so it must be clearly explained to them—as my noble friend the Minister has said—that their general ongoing liabilities must still be met, if possible, during the break. Is my noble friend happy that the qualified advisers will be able to convey this message and deliver an appropriate outcome for clients?
These general provisions apply equally to those receiving mental health crisis treatment, but, pursuing a different course, they must get relief in reliance on the approved mental health professionals, who will then need to notify the debt adviser in order to trigger a moratorium. Bearing in mind the historic and long-standing communication problems between AMHPs and local authorities, for instance, over responsibility in mental health matters, can my noble friend offer some further explanation as to how this process might be expected to work?
Sadly, many mental health patients have episodes of crisis that can be repetitive, and, in such cases, there may be difficulties in implementing the breathing space for them. It could be for one crisis treatment followed by the 30 days set down in the regulations and then a further 60 days arranged by the debt adviser. However, if further crisis treatment is necessary, this could be a very long-term situation, which can lead to misunderstandings or, even, unfairness all round. I know that the regulations acknowledge this different approach, as they, of course, limit other cases to only one breathing space in any 12-month period.
The issue of published guidance is also important. It must not be just for debt advisers or AMHPs; it must also be available in simple language for those who might benefit most from it and, surely, also for creditors, who are directly affected by these proposals. I am pleased to see that the provisions will be reviewed after five years, but I hope that, as implementation takes place, there will be careful monitoring and, if necessary, adjustments will be made as and when required. Finally, I hope that my noble friend can reassure us on that point as well.
My Lords, I thank the Minister for his clear presentation, and speak in support of these regulations. We very much welcome the incentive the Government are providing here for people with problem debts to seek debt counselling. People with problem debt will have the chance to apply for a breathing space of 60 days, with a freeze on enforcement action, interest and charges. There will also be the opportunity—as the noble Lord, Lord Kirkhope, has said in detail—for people suffering a mental health crisis to apply for a moratorium to take stock of their position and not to face the stress of being threatened with recovery action.
Owing significant sums of money is a very frightening experience. I know because, when I was a local councillor, I met lots of people in this position, and it can be made very much worse by being pursued to repay debt, particularly when on a very low income. It is stressful and fraught with threats of insolvency, eviction and bailiffs. As other noble Lords have said, these have knock-on effects on other services. Creditors’ overzealous use of court orders, debt collectors and bailiffs has led to dreadful experiences and compounds the desperation for vulnerable people and the risk of debt spiralling out of control through fear.
The moratoriums will provide time and resources for debtors to receive debt advice and for a sustainable repayment plan to be agreed. The statutory debt repayment plans are a welcome part of these regulations, but they are not as yet included. What timeframe are the Government looking at for SDRPs? Through the extension of continued breathing space protections, SDRPs would give people a safe way to pay back their debts and reduce the harm that debt causes.
Will the Minister also let us know what plans there are to publicise the scheme? In one of the briefings we had, we heard that—certainly—half the people who approach debt counsellors say that they had been worrying about their debts for a year or more before seeking advice. However, nearly eight in 10 surveyed said they would have got advice earlier if they had known this could stop interest charges, collection and enforcement action. Six in 10 said they would have sought advice earlier if they had known it would deliver the temporary help from creditors that they needed. Therefore, it is important that the Government give a great deal of thought to how these new regulations will be publicised to the people who need them.
I wonder whether the Minister is confident that the service can cope, particularly with the further increased demand caused by the Covid-19 pandemic and the projected economic consequences. Many debt counselling organisations, such as the CAB, have ever-increasing client lists. Members of my family who work as volunteers for the CAB have drawn this growing problem to my attention. Cuts to local authority budgets have meant that funding for the service has fallen dramatically over recent years.
Can the Minister also tell us how realistic he considers the tight timescales for conducting reviews are, given the pressure on the agencies and the specific assessments that are needed for people suffering from mental health problems? What will happen to people who suffer long-term mental health issues as well as recurrent episodes, as the noble Lord, Lord Kirkhope, mentioned?
It is intended that these regulations will come into force on 4 May, and others have said that they would like the scheme to be brought forward, which I also support. However, if the scheme is to be successful, there needs to be protection for creditors. Creditor organisations will need to adapt their systems, policies and processes to ensure that they are able to fulfil the new regulations in order that no action is taken against individuals who are subject to a moratorium, no interest fees and charges accrue during it, debtors are not contacted regarding the debt during the period of the moratorium and no action is taken to challenge the grounds in applying for a moratorium that should be taken before the deadline to do so expires.
What plans do the Government have to support creditors to adapt their organisations to the new regulations? I know that the noble Lord, Lord Blunkett, said that a great deal has advanced in this area, but I would be interested to hear the Minister’s assessment, and I very much look forward to his response.
My Lords, as ever, I am grateful to the Minister for introducing these important regulations and to all noble Lords who have taken part in the debate. It is a good illustration of the breadth knowledge of the specialist areas that we find in our House, and the extent to which there has been consensus on this matter is gratifying.
I also express my gratitude to the Secondary Legislation Scrutiny Committee, which brought a previous iteration of this instrument to the attention of the House. It has since engaged in correspondence with the Treasury regarding its plans for effective signposting to the new measures, as acknowledged in the committee’s 27th report and paragraph 11 of the Explanatory Memorandum.
These regulations are an example of the value that your Lordships’ House brings to the scrutiny of legislation. My noble friends Lord Stevenson of Balmacara and Lord Mackenzie of Luton, and several others, took up this cause during the passage of the parent Act. It is to the Government’s credit that they heard and accepted the arguments, bringing forward their own amendments on Report. Given the volume of legislation that we are currently dealing with, perhaps the Minister could remind his colleagues that good things can come from having an open mind and working together.
The breathing space scheme introduced by this instrument has been long championed by organisations such as StepChange. It is based on a successful scheme that has been working in Scotland for a number of years and is designed to offer people with unmanageable problem debt greater access to the financial advice they need—and at an earlier stage, too. We are delighted to note that the Government accepted the views expressed by virtually everyone they consulted on the draft regulations and agreed to include in the scheme all unsecured debts, including those owed to the Crown. There is also a welcome focus on special support for those who suffer from mental stress as a result of their debts. This will make a huge difference, particularly as the pandemic continues.
Implementing a 60-day freeze on charges, fees and certain forms of interest, as well as a pause in enforcement action, will provide valuable time for advice to be sought, provided, considered and ultimately acted upon. It seems obvious to say it, but complex debt cases take time to resolve. Recognition of that will, I hope, lessen the stress and anxiety faced by those who feel that their situation is spiralling out of control. Dedicated provisions for those experiencing a mental health crisis are particularly important. The taking into account of treatment lengths and recognition that mental health problems often recur undoubtedly strengthen the scheme. I hope that we will see such issues considered in future policy-making.
The impact assessment published alongside the instrument makes clear the scale of the problem. Out of 9 million overindebted people in the UK, just over 1 million seek and receive advice each year. Estimates suggest that between 650,000 and 2.9 million people would benefit from debt advice but do not actively seek it, often due to the stigma of problem debt. The impact assessment suggests a clear net benefit to society, and the regulations include five-yearly reviews. Although it will clearly take some time to assess the full impact, can the Minister indicate whether the department plans to publish any interim analysis before 2026? This new scheme will undoubtedly help to encourage more people to seek help, but the problem of stigma requires further work. Is the Minister able to comment on the steps being taken?
Ministers have met their target to launch the new scheme in May 2021, which is to be welcomed. We could perhaps have arrived at this destination at an earlier date—the parent Act received Royal Assent back in May 2018. Earlier publication and consideration of the detail would also have afforded financial institutions additional time to prepare.
We all agree that the new scheme will be of significant value, but we must also be mindful of the fact that it is only one part of a very complex puzzle. As noted in the Explanatory Memorandum, plans to introduce the option of a statutory debt repayment plan are ongoing. I wonder whether the Minister will feel able to go beyond the contents of paragraph 2.1 of the EM by naming a target date for the SDRP to be introduced.
I will end with a brief comment on the timing of this instrument, which is hugely symbolic, if coincidental. Covid-19 and the economic challenges that it has presented have forced millions of people to deplete what little savings they had, and in many cases to take on personal debt. I raised this point in the recent Private Notice Question on personal savings.
Although it is good that we have reached this important milestone, we must also acknowledge the challenges that lie ahead. Unemployment is likely to rise in the coming months and this could have a profound impact on levels of personal debt. I hope the Minister can reassure the House that the Treasury is not only aware of this risk but proactively considering how to mitigate it.
My Lords, I thank noble Lords for their thoughtful contributions, and I am grateful for the chance to respond to the points that have been raised.
I think we can all agree that current events make the case for this scheme to be introduced as soon as possible. I understand the point made by some noble Lords about the need to try to bring it in sooner. However, we have worked extensively with the sector and we feel that it is unlikely that we will be able to bring it in much sooner, probably due more to the need to train advisers than to issues related to the lending sector. The noble Lord, Lord Blunkett, and the right reverend Prelate the Bishop of Rochester are concerned about that. However, we want the scheme to work well, so we want to get it launched properly.
The noble Lord, Lord Tunnicliffe, my noble friend Lord Kirkhope and the noble Baroness, Lady Janke, asked about the SDRP. Many of the challenges apply in relation to the statutory debt repayment plan, which is complex; the Government want to ensure that the strong protections promised can be achieved. The financial services Bill will shortly be debated in Parliament. It contains a clause to give the Government the full range of powers they need to implement the SDRP and ensure that the protections that it offers mirror those in the breathing space regulations. Secondary regulations will then need to be prepared, appropriately consulted on and made. I cannot commit today to a specific date for introducing the SDRP, but I assure noble Lords that the Government are aware of the desire to see the second part of the debt respite scheme up and running as soon as possible.
We have also heard concerns that creditors will struggle to be ready, given the challenges of operating in the pandemic. The Government understand those concerns, but the scheme is, and remains, a priority in the current circumstances. The date of May feels like a reasonable compromise to achieve its introduction and have it working properly.
Noble Lords asked specific questions about how the scheme will work. The noble Lord, Lord Tunnicliffe, asked how the Government will prevent stigma in the scheme. I am aware that stigma can cause people to delay seeking advice. I am assured that this is being considered in the scheme design, including in the approach to credit referencing, which I set out for noble Lords in my opening speech. The Government’s intention is that the scheme’s strong protections should incentivise more people to see the value of taking advice earlier.
The noble Lord, Lord Blunkett, asked about unscrupulous advisers. I assure him that the FCA requires the provision of sound, impartial debt advice that is in the best interests of consumers. Debt advice providers cannot charge a fee in connection with the moratorium. Fee-charging debt advice firms must also signpost clients to sources of free debt advice. They must be transparent about the fees and charges payable by their clients and must ensure that those fees and charges do not undermine their clients’ ability to make significant repayments to creditors. The FCA’s most recent thematic review of the sector, published in March 2019, found significant improvements in the standard of advice given. The FCA takes supervisory and, if necessary, enforcement action where it finds that harm is caused by firms providing inappropriate debt advice.
The right reverend Prelate the Bishop of Rochester asked about the inclusion of universal credit debts. Universal credit overpayments will be included in the breathing space scheme from day one. Universal credit advances and third-party deductions will be included in the breathing space scheme on a phased basis as early as possible after the policy starts. These two additional aspects require significant IT changes, which need to align with the requirements of the wider UC programme. The Government recognise the importance of including all universal credit debts in the scheme as soon as possible.
The noble Lord, Lord Kirkhope, asked about approved mental health professionals. They are qualified and experienced, approved by local authorities, and have specific expertise and training in mental health and mental capacity law. They are experienced in supporting people in crisis and usually based in community crisis or home treatment teams. The Government will provide guidance on the scheme and are working with MaPS to smooth the process for AMHPs to reach debt advice providers.
The noble Lord, Lord Kirkhope, and the noble Baroness, Lady Janke, asked whether debt advice providers would be able to navigate the definition of excluded debts in the regulations. This point will be covered in the guidance. The Money and Pensions Service is working in partnership with the Money Advice Trust to develop and deliver an online training module, which will inform and support debt advisors with the introduction of the scheme in May 2021. The intention is for the training to be accessible to all debt advisors across the sector. MaPS is also working to provide debt advice providers with access to support on technical questions.
It is a complex scheme, necessarily so, given the wide range of public and private debts included. I explained in my speech that the Government will publish scheme guidance by the end of the year to offer further explanation where possible. The noble Lord, Lord Kirkhope, asked for whom this guidance will be provided. I can confirm that it will be prepared for debt advice providers, creditors, AMHPs, and GOV.UK will include a high-level overview of the scheme.
The Government are fully committed to closely monitoring the impact of the breathing space scheme, and developing and monitoring an evaluation strategy to facilitate an effective post-implementation review. As in all such matters, financial services firms will need to take their own legal advice on their approach. In addition to the government scheme guidance, I understand that the FCA will publish a consultation on guidance for firms shortly.
The right reverend Prelate the Bishop of Rochester asked about training. Government support for debt advice has already seen an extra £37.8 million support package made available to debt advice providers this year. The Government are working closely with MaPS on training for debt advice providers to help ensure that they will be ready to offer the scheme.
The noble Baroness, Lady Janke, asked about demand for the scheme. Moratorium can be accessed only via professional debt advice, so the take-up rate of the scheme is constrained by the available supply of that debt advice. Covid-19 poses many uncertainties, and we will continue to monitor the evolving situation. The noble Lord, Lord Tunnicliffe, was also concerned about the impact of Covid-19 and the downturn of the economy. The Government recognise that people are struggling with their finances during this very difficult time and have put an unprecedented package of support in place to try to help people during the pandemic. We will keep this area under close consideration.
I believe that the breathing space scheme will encourage people to engage with professional debt advice and create the necessary space for them to make better decisions based on that advice. Importantly, it will protect people receiving mental health crisis treatment until they are more able to engage in this way. I hope we can agree that these regulations are a positive step forward in an area that has long been important to many in this Chamber, with the potential to change lives. I beg to move.