It will come as no surprise to many people in this House that I am here in full support of my Co-op party colleagues on this matter, and in full support of the vital importance of supporting our credit unions because of the debt tsunami that is coming our way as a nation. Some people may think that it is one of my greatest hits to talk about personal debt and the scourge of the high-cost lenders. The credit unions have always been very much part of the answer to this, and I support amendment 2 on that basis. It is absolutely critical, with the debt tsunami that is coming towards us, that we act to support the credit union movement as a vital component of helping people.
For too many people in our nation, debt is a part of life. There is simply too much month for their money. That has been the case for many years, but the problems are becoming endemic, to the extent that people may not even realise the level of debt that they have. For other people, it may be all too clear: two out of five people are very worried about their level of personal debt. Let me be clear that we are talking about unsecured personal debt. These are not people who are just worrying about their mortgages; these are people who are worrying about the day-to-day cost of everyday living.
For 54% of people who are struggling, the cost of food is the problem—literally, the cost of putting food on the table as well as keeping a roof over their heads and those of their families. For 30% of people, the problem is the cost of energy. Those people will look at the weather forecast fearfully as the temperature drops, knowing that they simply cannot afford to put money in the meter to keep their families warm. Increasingly, people are in debt because of their debt: 22% of people are struggling because of credit card repayment debt.
That is everyday Britain. That is the kind of country we have become—a country where debt is so commonplace that people are not just waving but drowning in it. It is the responsibility of all of us to act. We must not simply give people debt advice, or shrug our shoulders and see this as part of how our economy works. We must ask whether there are things we can do to help people to manage their debts.
The debt tsunami will only become worse as we head into 2017. We all recognise that inflation is likely to rise from 1% to possibly 4%, some experts suggest. The cost of food and basic goods such as energy is going to get higher, not lower. So many people’s wages have been frozen for so many years that in 2017 the gap between the start of the month and the end of the month will feel very large. That is why we have to be pragmatic. Pragmatism is about offering people good options for managing what little money they have, and that is where the credit union movement comes into its own. When the Government want to encourage saving, it is absolutely vital that instead of excluding the credit union movement, they embrace it and the benefits that it can offer. A quarter of people in this country have no savings at all, so we need to ask ourselves which movement always has its doors open to every citizen, and how we can help it to bridge that gap. That means looking to the credit union movement.
My hon. Friend the Member for Harrow West (Mr Thomas) has made an admirable case for helping our credit union movement and its work. At the risk of repeating what has been said, I want to echo his words and say that we can do so much more. This scheme and the involvement of credit unions are the start, not the end, of that conversation. My own credit union struggled for many years to get on to the high street in Walthamstow, but what a difference that has made. My credit union struggled for many years to get into workplaces and to work with people, but what a difference doing so can make.
Councils around the country, such as Southampton, are working to give people access to a credit union as savers, in return for helping those who would otherwise have gone—let us say it—to a payday lender to get the money that they needed. That sort of work enables us to link communities together. It is crucial that we see
credit unions as being not just about borrowing, but about saving. We must recognise that saving enables us to support wider social objectives in a local community.
That is why this omission must be corrected and why Co-operative MPs are standing here tonight to try to get the Government to think again about excluding credit unions from the Help to Save scheme. Instead, we ask the Government to embrace credit unions by accepting the amendment. I join my hon. Friend in saying that if we do not get support from the Government for this change, we will seek to divide the House.
We want to send a message. We know that people will have to borrow. When 2017 looks as dire as it does, with inflation rising, people’s wages still stalling and the cost of living continuing to rise, we have to make sure that people have sensible borrowing options. They also need to have sensible saving options, and the credit union movement is the answer. It is the solution for people who might not have gone anywhere else. If we can get them into a credit union, we can start dealing with their debts and getting them to save.
This is a critical time for our country’s debt portfolio. As I said at the beginning of my remarks, a debt tsunami is heading our way. Let us not turn our backs on it. Let us be sensible about what we can do to help, and let us make credit unions part of the solution.
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