Under the FCA’s definition, credit card customers are in persistent debt if they have paid more in interest and charges than they have repaid of their borrowing, over an eighteen month period. Customers in persistent debt are profitable for credit card firms, who do not routinely intervene to help them.

The FCA estimates that around 3.3 million people are in persistent debt, with over half (1.8 million) for two consecutive periods of eighteen months. Today’s proposals require firms to take steps to help customers repay their balances more quickly and to offer further assistance to those who can’t.

Andrew Bailey, FCA Chief Executive, said:

“Credit cards can be a very effective product for consumers, but a significant minority of customers experience real difficulties. We expect our proposals to reduce the number of customers in problem credit card debt, as well as putting customers in greater control of their borrowing.

“Persistent debt can be very expensive - costing customers on average around £2.50 for every £1 repaid - and can obscure underlying financial problems. Because these customers remain profitable, firms have few incentives to intervene. We want to change this situation so that firms and customers will deal with outstanding debt more quickly, and avoid persistent debt in the first place.

“The measures that we’re proposing today, alongside those already announced, are part of a package of significant improvements for credit card customers based on the comprehensive analysis of the market that we have carried out.”

Under the new rules, firms will have to take a series of steps to help customers in persistent debt. When a customer has been in persistent debt for eighteen months, firms will be required to prompt them to make faster repayments if they can afford to do so. If a customer is still in persistent debt after a further consecutive eighteen month period, firms must take steps, such as proposing a repayment plan, to help them to repay their outstanding balances more quickly. Customers who do not respond, or who confirm that they can afford to repay faster but decline to do so, would have their ability to use the card suspended.

The FCA also proposes that where a customer cannot afford any of the options proposed to repay their balance more quickly, firms must take further steps to assist them to repay the balance in a reasonable period, for example by reducing, waiving or cancelling any interest or charges. It is expected that firms would normally suspend use of the customer’s card during this period.

The FCA expects these measures to lead to savings for customers from lower interest payments as a result of faster repayment. By 2030 we expect that the savings to customers would reach a total of between £3bn and £13bn, depending on how firms and customers respond. The FCA expects that the savings would peak in the first few years of the proposed rules being in place, at between £310m and £1.3bn per year, before reducing as fewer customers get into persistent debt over time.

In addition to measures on persistent debt, the FCA is also proposing to require earlier intervention by firms in response to signs that customers are in financial difficulty, building on an existing rule that requires firms to monitor a customer’s repayment record for signs of actual or potential financial difficulties. Under these new proposals, it is expected that firms would do more to use the extensive amount of data available to them to identify customers in difficulty and take appropriate action.

The consultation paper also sets out measures voluntarily agreed between the FCA and industry to give customers greater control over increases to their credit limits. New customers will be given the choice of how increases will be offered, while existing customers will be given a more straightforward means of declining an increase and more choice as to how increases will be offered in future. All customers will be made aware of their existing right to choose not to receive offers of credit limit increases.

Examples

• A customer who borrows £3,000 on a credit card with an APR of 19%, and only makes minimum repayments – starting at £74 per month and reducing over time – would typically take 27 years and 7 months to pay it of (assuming no further spending on the card).
• If the customer ­fixed their repayments at £74 per month rather than only making minimum repayments, they would pay it off in 5 years and 2 months.
• If they set their monthly repayment at £108 per month, they would their balance off in 3 years. 

 Gordon Marsden MP, Labour’s Shadow Skills Minister, commenting on a report from a sub-committee of the Education and Business Select Committee, claiming that the Government’s apprenticeship levy lacks focus and targets the wrong industries, said:

"Today's report confirms what Labour have been saying all along, that while the Government are obsessing over reaching an arbitrary target for apprenticeship starts, they are doing nothing to ensure the right outcomes for learners.

"The fact that the Government's approach lacks focus and targets the wrong industries shows that they have failed to develop an industrial strategy worthy of the name, and can only offer headline chasing gimmicks instead.

"Closing the skills gap and giving young people and older learners the skills they need should be essential to securing our post-Brexit future, yet once again this Government have nothing serious to offer the country."

ABC Comment: The ABC were talking about a partnership with the ‘Skills Funding Agency’ that manages the UK's apprenticeship schemes. The funds skills training for further education (FE) in England. It supports over 1,000 colleges, private training organisations, and employers with more than £4 billion of funding each year. It seemed a little premature at that time as we needed more content. As you can see our directory is growing and more will be happening in the autumn due to our relationship with Essex University, Student Union, VTeam. 

Rt Hon Malcolm Fraser AC CH talks about the Surveillance State to the Australian Fabian Society.  Australian politics have swung to the right. The Australian Fabians are battling a range of issues with youth unemployment one of them. It is often good to take opinions from outside our country and this interview is very candid and refreshing. Often, we are convinced by politicians that there is only one route and these outside commentators provide interesting insight to existing issues.  

The surveillance state effects people including those on benefits whom the state may feel it has a legitimate reason not to respect their privacy when snooping for potential benefit cheats. A feeling that if people are claiming, they do not have the same rights to privacy as other citizens do.

Video courtesy of the Australian Fabian Society

A damning independent review of the disability benefit Personal Independence Payment (PIP) has been published today by Paul Gray.  

The Liberal Democrats have blasted the government for ‘betraying the most vulnerable’.

Liberal Democrat MP Sarah Olney said:” This report is damning.  It shows that the government are betraying the most vulnerable in our society.  Running through this report like a stick of rock is the lack of trust.

“When even tribunal Judges say, they are sceptical about the thoroughness of the process you need to listen. This has to be a wakeup call. Enough is enough.”

A copy of the Paul Gray PIP review is below:

More than 100 new jobs, apprenticeships and work placements have been created across Stockport during the past two years, say Stockport Council by Investing in Stockport work.

From construction and business apprenticeships to hotel jobs and work placements on projects, the range of opportunities on offer has provided young people, students and residents with chances to gain experience, develop skills and get jobs in their chosen career say the Council.

One young person who is already benefitting is Shauna Ball from Binnington. Shauna is currently completing a Business Administration Apprenticeship at Redock Stockport and commented that “the apprenticeship is giving me the opportunity to learn a wide range of skills, which I know will help open up many doors in my future career ambitions.”

Creating a brighter future for local people is at the heart of the work that is changing Stockport. Each development is creating new jobs and opportunities both now and for the future. As restaurants, open; companies move in and better transport links make it easier for people to travel around, the scale of these opportunities will grow significantly.

Councillor Dean Fitzpatrick, Executive Member for Education at Stockport Council said: “I’m delighted so many young people are already benefiting from the work taking place across Stockport. As a Council, we are committed to ensuring local young people and residents get the chance to develop the skills they need to succeed in their careers and the opportunities being created on our investment projects show this in action.

“As the development work continues it’s estimated over 5,000 new jobs will be created across Stockport, creating even more opportunities for our young people.”

ABC comment: We wish them well with this project. If you want to learn more click on the link. 

On Sunday 9 April classic cars, motorbikes and commercial vehicles, that pre-date 1991, will assemble at Havant Borough Council’s Plaza car park from 8.30 am before heading of on their prestigious Classic Vehicle Run.   

In aid of the Mayor of Havant’s charity appeal, this annual event, now in its 13th year, will see the Mayor of Havant flag off the vehicles at 10am.  

The participating vehicles will travel through Hampshire’s beautiful countryside before arriving at Fort Purbrook, Portsdown Hill Road at midday.  The vehicles will then be on view again for people to see. 

The Soberton Strummers (Ukulele Band) will be providing the musical entertainment at the Fort, with tours and a BBQ also available to make the day an enjoyable one for all the family.

Councillor Faith Ponsonby, Mayor of Havant, said: “This annual event is always extremely popular, not only with vehicle owners, but also enthusiasts who enjoy viewing the vehicles either at the start or when they have completed the run out.  Last year over 170 vehicles participated.”

ABC Comment: The event is free. We will be adding many events to the Events section in the coming months  

The Department for Exiting the European Union has recommended that the three million EU migrants in the U.K. before May triggers Article 50 should keep their rights to claim welfare. Those who arrive after Wednesday would not get benefits if the proposal is accepted by cabinet.

The UK’s Permanent Representative to the European Union, Sir Tim Barrow, has this morning informed the office of European Council President, Donald Tusk, of the UK’s intention to invoke Article 50 of the Lisbon Treaty on March 29, 2017.

This meets the UK’s longstanding commitment to trigger Article 50 by the end of March 2017.

Secretary of State for Exiting the European Union David Davis said:

Last June, the people of the UK made the historic decision to leave the EU. Next Wednesday, the Government will deliver on that decision and formally start the process by triggering Article 50.

We are on the threshold of the most important negotiation for this country for a generation.

The Government is clear in its aims: a deal that works for every nation and region of the UK and indeed for all of Europe – a new, positive partnership between the UK and our friends and allies in the European Union.

Image: Secretary of State for Exiting the European Union David Davis

The House of Lords has voted to "regret" the government's latest changes to disability benefits, and has called for a review of the impact.

The government intends to prevent any increase in the kind of people who can claim Personal Independence Payments or PIPs. The move follows a court ruling that widened the criteria, and would allow people with mental illnesses to be able to claim help with travel.

A Lib Dem attempt to kill off the government changes failed. But the Labour motion, which simply criticises the government, was carried by 162 votes to 154. However, the motion has no material effect on the benefit.

ABC comment: an amendment or motion may be moved regretting some aspect of a statutory instrument but in no way requiring the government to take action. This provides an opportunity for critical views to appear on the order paper and be voted upon which would otherwise simply be voiced in the debate.

Liberal Democrats Comments

Following Labour’s failure in the House of Lords tonight to join the Lib Dems in voting to stop damaging Government cuts to Personal Independence Payments (PIPs) Baroness Celia Thomas, Lords Spokesperson for Disability, said:“These hastily drawn-up Regulations are a disgrace.  By withdrawing the highest rate of mobility support to some of the most vulnerable claimants, the Government are condemning many to a housebound existence.
 
“We had a chance to stop this. The Liberal Democrats voted to end it. Labour did not support us, they did not support those vulnerable people set to have their lives ruined by a Conservative Government intent on making cuts no matter how damaging.   
 
“Labour have once again shown their spineless inability to take a stand. Like tax credits we could have forced the Government to think again but instead they voted only for their limp motion which will ultimately do nothing to alter the course of Government.“The Liberal Democrats are the only true voice of opposition, standing up to this reckless and uncaring Conservative

The Birmingham Mail is alleging that Khalid Masood, the lone suspected terrorist that enacted the attack on the public outside the Houses of Parliament ‘may’ (states the article) have been cheating when claiming benefits, while living in Birmingham.

The article goes on that, 'More details have come to light about the past of the man previously known as Adrian Elms who converted to Islam'.

Armed police shot dead the killer after he made an attack on the public (it is assumed in support of the aims of the Islamic State) in London, leaving four people dead, including hero PC Keith Palmer.

‘The warped (their words) father-of-three’ goes the Mail article, ‘may have also been a serial benefits cheat?

A source told the Daily Star newspaper indignantly: “He was living on state handouts – money taken out of the pay packets of hardworking, decent folk”.

People the article implies would never become terrorists themselves because they have got a job and don't sign-on or unjustifiably claim benefits? 

Masood may well have been on benefits and might have claimed benefits that he was not entitled to?

There are higher rates of unemployment for those in ethnic groups in the UK. It also a fact, in the Arab Spring unrest, these countries undergoing social revolution, have very high rates of unemployment, including the graduate population. ISIS gives young people not just direction and focus, but also a job.

Sanctions against Iraq, the economic consequences of war, and the US decision to oust Ba'th party-members of the former ruling government in Iraq, drove many senior Iraqis with their weapons to join ISIS and fight the Shia majority (backed by Iran) in Syria and Iraq. ISIL (Islamic State of Iraq and the Levant) then became ISIS (Islamic Independent State). In Arabic Daesh.

The Americans talk a lot about 'freedom' but when they repealed and replaced the laws of Iraq, they left in place the laws (enacted under Saddam Hussein’s leadership period) banning trade unions. Awash with US taxpayer’s money and added to that the gold reserves of the state treasury acquired by the Americas - masses amounts of money simply ‘disappeared’ in Iraq due to fraud and over-charging by multinationals. Containers of hundreds of millions of US dollars simply vanished without trace, some have speculated, with the collusion of US personnel?

Khalid Masood was driven by a murderous ideology which seeks to drive the US out of the Middle East and establish an Islamic Caliphate as well as expand the Islamist ideology to the rest of the world.  However, the arguments that he was a benefit cheat and there were some causal-links between that fact and this ideology, we must reject.  

The ISIS goal, is to persuade the public to no longer support their government(s) actions in occupying the Middle East and to punish the West for failing to resolve the Palestinian crisis in conjunction with Israel. This is the driving force behind ISIS ideology. The fact they are now losing territory is turning ISIS into a ‘cornered animal’. That is the reason for attacks like these in Europe we believe, and it has nothing to do with claiming benefits, beyond the fact that those unemployed struggling to live on paltry benefits in the UK, Paris and Brussels feel powerless and that might well be a reason why they are attracted to ideology that gives them a sense a purpose, in a society that castigates them for being an outsider and a welfare claimant.   

Local authorities in London say rent collection levels for homeless tenants placed in emergency accommodation have collapsed following the introduction of the universal credit digital service last year.

Croydon council says it faces an unpaid £2.5m rent bill this year as a result, and has warned ministers this scale of losses is unsustainable. It said the costs were leaving councils potentially unable to meet their statutory duties under homelessness law.

Councils have pointed out that universal credit rules force homeless families to be put up in short-term, bed and breakfast-style lodgings to wait six weeks to qualify for rent support, something they say is incompatible with laws that require councils to move those families on to more suitable accommodation within six weeks.

Large numbers of families placed in bed and breakfast accommodation in the boroughs of Croydon, Southwark and Sutton have run up arrears averaging £1,500 before being transferred by the authorities, leaving councils to foot a bill that under the old system would have been met by housing benefit.

Alison Butler, Croydon council’s deputy leader and cabinet member for homes, regeneration and planning, called on ministers to take urgent action: “Universal credit and the benefit cap have left hundreds of Croydon families in more debt and saddled the council with spiralling costs, so the government must fix this flawed policy before it goes nationwide.”

It is understood that ministers are preparing to issue new guidance under which homeless families in full universal credit rollout areas will receive financial support through housing benefit. This would represent a significant reversal for the new system, which was supposed to simplify and universalise the benefit system.

A Department for Work and Pensions spokesman said: “We are working with local authorities to ensure the small number of universal credit claimants living in emergency temporary accommodation are fully supported, including looking at new exemptions for those who are made homeless.”

Croydon has told MPs that universal credit policy and design is “simply not compatible with the effective discharge of those councils’, or indeed any council’s, responsibilities to homeless households”. It said housing benefit was “a system that has historically proven to better suit the vulnerability of this customer group”.

Before the rollout of full universal credit in each of the three boroughs, which were among the first in the UK to move to the full system, rent collection levels for tenants in emergency accommodation were over 90%. However, these fell rapidly following the move to the new system: to 59% in Croydon, 44% in Sutton and 51% in Southwark.

Universal credit customers are not able to claim housing support if their rental liability is less than six weeks. However, it is unlawful for councils to keep homeless families in emergency lodgings for longer than six weeks. Ministers periodically admonish or fine councils which breach the six-week rule. In the past, this has included Croydon.

Three-quarters of homeless households in bed and breakfast-style accommodation are families with children. Nearly two-thirds are lone parents and it is not unusual that they are fleeing domestic violence or have a mental illness. Most are not in work or able to pay rent.

The bulk of the expected tens of thousands of homeless claimants affected each year are expected to be in London, where pressure on housing is highest. The latest quarterly official homeless figures released on Thursday revealed that the number of households in bed and breakfast accommodation in England has risen by 17% over the past year.