What politicians should be focusing on at party conference

Commentary | 04/10/21

This week the Conservative Party Conference is taking place in Manchester. This will bring this year’s major conference season to an end, following the Labour Party Conference in Brighton last week.

Both parties seem to be facing big questions about the unity of membership. Keir Starmer’s first conference speech as Labour was well received but there is still a clear division in the party between Corbyn supporters on the left and Starmer’s supporters closer to the central ground.

Boris is fighting his own battles. A driver shortage followed by a petrol crisis has meant that he needs to demonstrate that he has a plan to deal with the impact of Brexit and show that it really was worth it.

All this comes at a time when there is a sharp focus on family finances and living standards. Times are difficult for many households. The more alarmist papers have drawn comparisons to the 70s and the three-day week, but could there be some truth in their claims as we face energy shortages and higher levels of employment? Brexit combined with the impact of Covid-19 makes for uncertain times.

In the last few weeks alone several energy firms have gone bust, and the furlough scheme has come to an end. It has been estimated that a million workers remained on furlough at the end of September. The end of scheme will force tough conversations for employers and the Bank of England is expecting a rise in unemployment.

The Government announcement of a new scheme to help families struggling with the cost of living is welcome, but it will only plug the gaps that have been left by the withdrawal of other support.

Politicians need to understand that the pandemic has accelerated change in how we live our lives, the labour market has evolved, and so have housing and travel requirements.

What does this mean for alternative credit, a sector relied on by those who struggle to borrow elsewhere? The need for this form of borrowing will remain and is likely to grow as more people face variable incomes or uncertainty about their future finances.

There is a call from the alternative lending sector to understand how people choose to manage their finances. This market was shrinking before the pandemic hit and we continue to see major players leaving the market due to regulatory challenges. The Government too needs to better understand the impact of the pandemic on the supply and demand of credit.

Politicians continue to work on ‘affordable products’ with a pilot of a No Interest Loan Scheme and the expansion of credit unions. In reality millions of pounds of taxpayer money has been spent on trying to grow these alternatives, with very little to show in the way of success.

Alternative lending companies exist because of need. They are well placed to help a group of consumers manage their finances to match their individual situations. Now is the time to ensure that access to credit is preserved when the future remains uncertain for many. A period of stability will allow our section of the credit market to continue to serve customers while also contributing to growing the economy once more.