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Greg Mulholland

This New Year, Greg Mulholland MP backs breathing space for families in problem debt

February 14, 2017 9:31 AM

Greg Mulholland MP has backed calls for a new scheme to help thousands of families regain control of their finances as data from the Bank of England shows unsecured household debt rising at its fastest rate since the financial crisis.

Debt often strikes when people experience sudden changes in circumstances such as job loss or ill health. Aggressive action from creditors and pressure to repay debts at an unaffordable rate can lead families to cut back on everyday essentials like food, take out other, expensive loans or fall further behind on essential bills [[i]].

The rise in personal borrowing has led to mounting concern that households who get into debt need safer ways to manage financial difficulties.

In Leeds North West alone, an estimated 1,024 families with 1,785 children are living with problem debt. Analysis from The Children's Society shows that children in low-income families with multiple debts are more likely to suffer from mental health problems than equivalent families with fewer debts.

Greg Mulholland MP has joined calls in parliament to introduce a 'Breathing Space' scheme - supported by The Children's Society and StepChange Debt Charity - that would offer people seeking debt advice a 12-month legal protection from mounting interest, charges and enforcement action. It would build on protections offered under the Debt Arrangement Scheme in Scotland, which has made sure that families sticking to an affordable repayment plan agreed with their creditors are not harried or hassled for the duration of that plan.

Children's SocietyGreg Mulholland, MP for Leeds North West said:

"It can't be right that children's mental health and happiness is suffering as a result of creditors unfairly escalating people's debt problems.

"Families in problem debt need time and space to get back on their feet. By providing a period free from additional interest, charges and enforcement action, a new Breathing Space scheme would help families recover their financial situation and put in place a plan to affordably repay their debts.

"I'm pleased that the Breathing Space proposal has widespread cross-party support, including from the Work and Pensions Select Committee and the APPG on Debt and Personal Finance. The Government now needs to act by putting a comprehensive Breathing Space scheme in place."

Children's Society supporter Tony Sutcliffe said:

"It is a massive boost for the Society's campaign to get MPs like Greg on board because we really want to make sure that our message is heard as loudly as possible, both within Parliament and beyond.

"This is a campaign which is vital in ensuring that young children growing up in our present society are not burdened with a future of mental health problems simply because we couldn't provide that vital breathing space for their families."

Rob Jackson, Yorkshire and Humber Area Director at The Children's Society, added:

"Families who are trapped by debt need help urgently. Without it, their children are likely to pay the price with their mental and physical health. With unfair repayment plans, soaring interest, visits from intimidating bailiffs and the fear of eviction, the odds are stacked against parents who are desperate to find a way out of their debt. Meanwhile mums and dads are being forced to make impossible decisions between feeding and clothing their children, and paying the bills.

"It is now absolutely clear that this problem is not going away unless the Government acts to give families the breathing space they need to get their finances back on track. We're delighted that Greg Mulholland is lending his voice to this vital campaign, and we would urge other MPs to follow his lead and call on the Government to take action."



[i] Reference: StepChange Debt Charity 'Safe Harbours'