Followers of Treasury Select Committee Chair, Nicky Morgan MP will have anticipated the announcement on 8th November that the TSC has launched a formal inquiry into household finances, honing in on income, savings and debt.

The inquiry aims to consider the state of UK household balance sheets, including whether households are saving adequately in the current economic environment, problematic and over-indebtedness, inter-generational issues, lifetime financial planning and the effectiveness of the market in financing solutions and products to low income households.

Announcing the inquiry, Nicky Morgan described debt as a “huge emotional burden” and advised the Committee will examine what policies can support households to achieve suitable savings, while also looking at ‘the sustainability of the UK’s household debt and consumer credit.’”

The inquiry comes amid growing concerns over the nation’s rising debt levels and increased use of unsecured consumer credit. Last week, the Bank of England reported a rise in credit card lending increasing by 9.2% on the same month a year earlier – up from 8.9% in August^[3]. This also reflects the concerns expressed by FCA Chief Executive, Andrew Bailey in September when he highlighted the number of people needing loans to make ends meet.

As the banks tighten their lending criteria and the effects of the recent interest rate starts to impact households that are already impinged by stagnant wage growth, the need for responsible credit is taking on an even greater significance.

It is unsurprising that the provision of consumer credit is very much a current area of focus for the regulator and it is therefore timely that the Treasury Select Committee has opened its inquiry into household debt.

The TSC’s first evidence session is scheduled to take place on 14^th November when evidence will be taken from Ashwin Kumar (Chief Economist, Rowntree Foundation), Michael Johnson (Research Fellow, Centre for Policy Studies), and Torsten Bell (Resolution Foundation). During the course of the inquiry, questions to be addressed include; the scale of and trend in problematic debt; whether there is a need for new credit products for the more variable household; what the regulators are doing to monitor the issues of problematic debt; the provision of credit products for low income households and what interventions can the Government make, including “breathing space” schemes.

The issues surrounding debt and the need for responsible credit are unlikely to dissipate any time soon. As Brexit looms and the interest rate rise takes effect, we, at CCTA, will continue to keep you appraised of the developments of the TSC inquiry. We will also continue to work on your behalf with parliamentarians, stakeholders and the regulatory bodies providing input and comment to ensure that the interests of your business and your customers are truly represented.

There has never been a more pertinent and essential time for your Trade Association to represent your interests through strong public affairs campaigning. Rest assured that we will ensure your voice is