UK Government Told to Act as Households Face Racking Up £6BN in Debts

The SNP has ramped up pressure on the UK government to urgently introduce a comprehensive financial package and strengthen welfare protections, after a new report revealed that households across the UK face racking up £6bn in debts due to the coronavirus pandemic.

StepChange, a debt advice charity, warned in its study that each affected adult across the UK will have accumulated an extra £1,076 of arrears and £997 of debt on average due to the health crisis – with 4.6m households across the UK impacted.

Meanwhile, it reported that 1.2 million people have fallen behind on utility bills, over 800,000 people on council tax, and 590,000 on rent.

Neil Gray MP (pictured), the SNP’s Shadow Secretary of State for Work and Pensions, said:

“The coronavirus pandemic has dealt a devastating blow to the economy, people’s jobs and livelihoods, and households across the UK.

“The findings published by StepChange are a stark warning for the urgent need for the UK government to bring forward a comprehensive financial support package and to strengthen welfare protections, as there are still serious gaps in support that risks leaving people behind.

“With many households witnessing a loss in income or job losses, it is clear that stronger support measures are desperately needed to prevent people taking on unmanageable levels of debt, rising unemployment, and to ensure a strong economic recovery.

“Nearly 9 million workers are now covered under the UK government’s furlough scheme, while the number of people claiming unemployment benefits rose by eighty per cent to 2.1m in April. People are falling behind on their utility bills, credit card payments and rent.

“While the support brought forward by the UK government so far has been welcome, there are still serious hurdles – including DWP pushing people towards debt with Universal Credit advance payments.

“They must heed the calls and introduce non-repayable grants instead of loans at the start of Universal Credit claims to prevent more people falling into hardship.

“It is now critical that the UK government commits to maintaining access to the furlough scheme for as long as is required across each of the devolved nations, invests to stimulate economic growth and boost jobs, considers piloting a Universal Basic Income, and explores measures to alleviate the financial burden facing households – including an emergency basic payment, an Emergency Coronavirus Energy Grant, a six-month reprieve on utilities being cut off, and a freeze on prices.”