Helen Goodman (Bishop Auckland) (Lab):
A few months ago, I spent a morning in the court-which, incidentally, is also to be closed by the Government-in Bishop Auckland with a CAB adviser who was helping people who were in court because their rents or mortgages were not paid, and they were under threat of losing their homes. That morning I saw how vital the service provided by the CAB is to people at the critical moment when their homes are at risk. I was, therefore, absolutely appalled to discover that the Government are proposing to end the financial inclusion fund in March.
Last year, 1.5 million people were given advice on debt by citizens advice bureaux. Those services were concentrated on people who are most in need in deprived and low-income areas. In my constituency, there are three CABs.
The Wear Valley CAB lost a grant of £95,000 in the FIF cuts, together with the legal aid cuts and the cuts that have been forced on the county council by the Secretary of State for Communities and Local Government. It will lose half its workers, which means that there will be no debt advice whatever in the whole of the Wear Valley district. The branch manager, Carol Shreeves, wrote to me in an e-mail:
“We have this week begun to tell clients coming to the bureau that we cannot take them on. Many have been very upset, as it has taken a lot of courage for them to come and seek help. The cut means that the bureau will have to reduce the number of hours it opens and will need to make approximately half its staff redundant. The difficulty is that since Christmas we have seen rise in demand for our services as various statutory agencies trying to save money at this difficult time have been referring clients to us…It seems to be generally accepted that debt advice is needed but the support for it is being withdrawn from all sides.”
Of course, the one group of people providing more advice are the loan sharks and the independent debt advisers, who are going round my constituency putting cards through letter boxes, saying, “Come to us”. If people go to them, they will be directed to precisely the people who will put them into a worse situation.
At the same time that that is happening, the Government are cutting the growth fund, which is the money that the Labour Government put into support for credit unions-another place where people can get low-cost finance and have a chat with somebody about how to manage their money.
The Teesdale CAB also lost its grant and will have to cut the jobs of two people. Last year, it dealt with 220 cases and a total of £2.7 million of indebtedness.
The third CAB in my constituency is in Sedgefield. It too lost its financial inclusion fund grant of £150,000. Last year, 41% of its work was debt-related. All the debt workers in the Spennymoor CAB will be made redundant in April. The CAB social policy officer in Sedgefield, Martin Jones, said:
“The effect of ending the FIF scheme…will be catastrophic. The level of services that we can provide to our clients will be totally decimated as the CAB will lose over half of our debt team. And all this at a time when unemployment and inflation are rising and putting increasing stress on our clients, many of whom are the most vulnerable in society”.
I confirm that that is correct. On Friday, I learned that in just one part of my constituency, housing benefit cuts will mean that people will have to find another £1 million from their own pockets to pay their rents.
The Minister does not seem to understand that it is all very well to talk about the big society, but the vision of the big society is collapsing. In these communities, where incomes fall and businesses do not do very well due to the Government’s irresponsible policies, CABs will not be able to raise alternative funds to replace Government grants. Furthermore, this is a policy of total financial lunacy. It costs £150 to give a family debt advice. It costs £15,000 to re-house a family. I shall be very interested to hear how the Minister can defend such a lunatic policy.
