Impact of debt by Mike Kane MP

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Debt and its impact on our communities
by Mike Kane MP for Wythenshawe & Sale East

Mike Kane debt article for GM Poverty Action

Mike Kane MP

There​ ​is​ ​a​ ​wealth​ ​of​ ​evidence​ ​around​ ​the​ ​issue​ ​of​ ​problem​ ​debt​ ​and​ ​its​ ​impact​ ​on​ ​our communities. ​ ​​ ​In​ ​my​ ​constituency​ ​alone​ ​there​ ​are​ ​more​ ​than​ ​16,000​ ​people​ ​who​ ​are​ ​‘over​ ​indebted’​*.​​  ​Yet​ ​we​ ​have​ ​seen​ ​little​ ​action​ ​from​ ​Government​ ​to​ ​address​ ​the​ ​multiple​ ​and complex​ ​issues​ ​which​ ​cause​ ​it.

A​ ​recent​ ​report​ ​by​ ​the​ ​Money​ ​Advice​ ​Service​ ​revealed​ ​that​ ​renting​ ​a​ ​property​ ​indicates​ ​that you​ ​are​ ​twice​ ​as​ ​likely​ ​to​ ​be​ ​over-indebted​ ​as​ ​those​ ​owning​ ​their​ ​home. ​ With​ ​1​ ​in​ ​4​ ​people renting​ ​being​ ​over​ ​indebted. ​ ​For​ ​those​ ​renting​ ​a​ ​social​ ​housing​ ​property​ ​this​ ​increases​ ​to nearly​ ​1​ ​in​ ​3.

Debt​ ​has​ ​become​ ​a​ ​‘significant​ ​problem’​ ​for​ ​an​ ​estimated​ ​4,920​ ​families​ ​in​ ​my​ ​constituency. On​ ​top​ ​of​ ​this​ ​my​ ​constituency​ ​is​ ​one​ ​of​ ​those​ ​hit​ ​hardest​ ​by​ ​the​ ​bedroom​ ​tax​ ​with​ ​3038 affected​ ​tenants.   Families​ ​are​ ​facing​ ​debt,​ ​poverty​ ​and​ ​eviction​ ​and​ ​fighting​ ​this​ ​has​ ​been​ ​my​ ​main​ ​focus​ ​as​ ​an MP​ ​since​ ​I​ ​was​ ​first​ ​elected.​ ​​ ​Too​ ​many​ ​people​ ​in​ ​Wythenshawe​ ​and​ ​Sale​ ​are​ ​turning​ ​to payday​ ​loans,​ ​expensive​ ​credit​ ​cards​ ​and​ ​doorstep​ ​lenders​ ​and​ ​this​ ​all​ ​too​ ​often​ ​lands​ ​them in​ ​a​ ​cycle​ ​of​ ​debt​ ​that​ ​is​ ​difficult​ ​to​ ​break.

In​ ​Westminster​ ​I​ ​have​ ​been​ ​supporting​ ​the​ ​work​ ​of​ ​the​ ​All​ ​Party​ ​Parliamentary​ ​Group​ ​on Debt​ ​and​ ​Personal​ ​Finance​ ​and​ ​the​ ​charity​ ​StepChange.​ ​Their​ ​campaign​ ​for​ ​a​ ​Breathing Space​ ​scheme​ ​for​ ​families​ ​in​ ​problem​ ​debt​ ​who​ ​need​ ​time​ ​and​ ​space​ ​to​ ​get​ ​back​ ​on​ ​their feet​ ​received​ ​cross-party​ ​support​ ​and​ ​I​ ​look​ ​forward​ ​to​ ​the​ ​Government​ ​putting​ ​a comprehensive​ ​Breathing​ ​Space​ ​scheme​ ​in​ ​place​ ​quickly.  By​ ​providing​ ​a​ ​period​ ​free​ ​from​ ​additional​ ​interest, charges​ ​and​ ​enforcement​ ​action schemes​ ​like​ ​this​ ​can​ ​help​ ​families​ ​recover​ ​their​ ​financial​ ​situation​ ​and​ ​put​ ​in​ ​place​ ​a​ ​plan​ ​to affordably​ ​repay​ ​their​ ​debts.

Mike Kane debt article for GM Poverty Action

Launching​ ​payroll​ ​deduction​ ​for​ ​staff​ ​with​ ​Manchester​ ​Credit​ ​Union​ ​at​ ​UHSM

Locally​ ​I​ ​have​ ​been​ ​working​ ​with​ ​Manchester​ ​Credit​ ​Union. ​ ​As​ ​an​ ​ethical​ ​lender​ ​they​ ​help​ ​to make​ ​sure​ ​people​ ​get​ ​a​ ​fair​ ​deal​ ​on​ ​a​ ​loan, ​ while​ ​also​ ​encouraging​ ​saving​ ​and​ ​keeping money​ ​in​ ​the​ ​local​ ​area.

I​ ​take​ ​the​ ​opportunity​ ​of​ ​any​ ​visits​ ​to​ ​employers​ ​in​ ​my​ ​constituency​ ​to​ ​encourage​ ​them​ ​to work​ ​with​ ​Manchester​ ​Credit​ ​Union​ ​to​ ​offer​ ​payroll​ ​deduction​ ​at​ ​source​ ​for​ ​their​ ​staff. Working​ ​with​ ​University​ ​Hospital​ ​South​ ​Manchester​ ​we​ ​have​ ​already​ ​secured​ ​this​ ​for​ ​5,900 employees​ ​at​ ​the​ ​Hospital.

To​ ​solve​ ​the​ ​problem​ ​in​ ​the​ ​long​ ​term​ ​however​ ​we​ ​must​ ​give​ ​our​ ​children​ ​a​ ​strong​ ​financial education​ ​from​ ​the​ ​outset. ​ ​​ ​That​ ​is​ ​why​ ​I​ ​have​ ​been​ ​working​ ​with​ ​local​ ​employers​ ​to​ ​get them​ ​into​ ​primary​ ​schools​ ​so​ ​our​ ​children​ ​understand​ ​about​ ​money, ​ ​budgeting​ ​and managing​ ​finances.

Mike Kane debt article for GM Poverty Action

Visiting​ ​Sandilands​ ​School​ ​‘numbers​ ​at​ ​work’​ ​day​ ​supported​ ​by​ ​One​ ​Advice​ ​and​ ​City in​ ​the​ ​Community

However, ​ with​ ​the​ ​roll​ ​out​ ​of​ ​Universal​ ​Credit​ ​(UC) looming​ ​I​ ​know​ ​the​ ​situation​ ​is​ ​about​ ​to become​ ​even​ ​more​ ​challenging. ​ ​The​ ​6​ ​week​ ​wait​ ​risks​ ​pushing​ ​people​ ​into​ ​debt. ​ ​Over​ ​half​ ​of the​ ​people​ ​the​ ​Citizens’ Advice Bureau​ ​(CAB) have​ ​helped​ ​who​ ​receive​ ​UC​ ​were​ ​forced​ ​to​ ​borrow​ ​money​ ​while waiting​ ​for​ ​their​ ​first​ ​payment.   People​ ​CAB​ ​have​ ​helped​ ​with​ ​debt​ ​issues​ ​who​ ​receive​ ​Universal​ ​Credit​ ​are​ ​14%​ ​more likely​ ​to​ ​have​ ​problems​ ​with​ ​priority​ ​debts​ ​like​ ​rent​ ​and​ ​council​ ​tax.

That​ ​is​ ​why​ ​we​ ​are​ ​calling​ ​on​ ​the​ ​Government​ ​to​ ​pause​ ​Universal​ ​Credit​ ​Full​ ​Service​ ​roll​ ​out, and​ ​work​ ​with​ ​us​ ​to​ ​deliver​ ​a​ ​more​ ​effective​ ​system, one​ ​which​ ​delivers​ ​on​ ​the​ ​original ambition​ ​of​ ​simplifying​ ​social​ ​security​ ​and​ ​making​ ​sure​ ​work​ ​always​ ​pays.

Ultimately​ ​to​ ​get​ ​on​ ​top​ ​of​ ​this​ ​debt​ ​crisis​ ​we​ ​need​ ​better​ ​access​ ​to​ ​fair​ ​credit​ ​for​ ​families who​ ​are​ ​struggling​ ​to​ ​make​ ​ends​ ​meet. ​ ​We​ ​need​ ​to​ make​ ​our​ ​credit​ ​unions​ ​more​ ​easily accessible​ ​and​ ​we​ ​must​ ​continue​ ​to​ ​fight​ ​the​ ​usury​ ​that​ ​is​ ​payday​ ​lending.

 

*​over-indebtedness is ​defined ​as finding ​keeping ​up with bills ​and ​commitments as a heavy burden ​and/or ​falling behind or missing payments in at least three of ​the previous ​six ​months

 

 

 

 

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