Action that could prevent debt misery

Who worries about people struggling with debt? Not many of our patronising politicians, judging by recent pronouncements on the issue.

The fact that many turn to food banks is because “the poor can’t cook”, according to one ill-judged pronouncement on Monday by the Tory peer Baroness Jenkin.

But the Coalition’s benefit cutbacks have clearly had a disastrous effect for many. Official figures published this week revealed that nearly a million people lost benefits in the year to April under the hard-line benefits clampdown. Are they all lazy scroungers, as some Tories would have it? Of course not. Most want to work and want to be able to afford to feed themselves.

But a shocking charity report published today by the StepChange debt charity, warns that millions of people in temporary financial difficulty risk falling deeper into debt because of inconsistency by creditors in dealing with people who ask for help.

What they should be doing is freezing interest and charges to prevent debts mounting up, or agreeing affordable repayment terms. They should also scrap distressing enforcement action for people who ask for help in repaying their debt.

In practice, StepChange warns, struggling families often get no support and feel forced to take on further borrowing, even turning to high-cost payday loans, to pay back existing debts. And that leads to a deepening spiral of debt. The fact is creditors are generally only allowed to freeze interest and charges in cases of insolvency.

The charity is proposing a new “extended breathing space” where the statutory protections are extended to people with temporary financial difficulties.

Struggling people need help, understanding and forbearance, not ill-thought out pronouncements. The credit authorities – including the government, lenders and regulators – should adopt this scheme urgently, before Christmas debt becomes New Year financial heartbreak.

s.read@independent.co.uk

Twitter: @simonnread