Part of the debate – in the Senedd at 6:06 pm on 1 December 2021.
Diolch, Llywydd, and I'd like to start by thanking Plaid Cymru for bringing this debate today. It not only highlights the rising levels of household debt in Wales outlined by speakers today, but also the steps we're taking as a Welsh Government to mitigate some of the grave hardships being faced. And I also welcome the Equality and Social Justice Committee inquiry into debt and the pandemic. I look forward to responding to the recommendations, which I'll consider carefully.
Evidence to the committee has shown the consequences for people left struggling with problem debt, and that evidence shows those painful and long-lasting impacts, as Sioned Williams and Jane Dodds, members of the committee, have identified and heard in that evidence. Households are under unprecedented financial pressures as a result of the pandemic, but also from our exit from the EU, the rising cost of living, fuel and food, and cuts to welfare support. As we've heard today, this perfect storm—this perfect storm of rising costs and adverse impacts—is plunging many more vulnerable households into poverty, as Mike Hedges has described.
I agree with the Bevan Foundation's assessment that, sadly, debt levels across Wales will increase in the coming months. We know this will include debt owed to public sector creditors, including local authorities, the Department for Work and Pensions and Her Majesty's Revenue and Customs. We did welcome the legal protections from debt enforcement action and creditor forbearance that eased the financial burden for many households across Wales during the pandemic. However, as evidenced by the Bevan Foundation in their report, we can't avoid the reality that now legal protections, creditor leniency and the £20 per week universal credit uplift have ended, people in Wales have been left with problem debt.
Most of the powers to address this cost-of-living crisis do lie in the UK Government's hands, but we will do everything we can as a Welsh Government to help families through this winter. To help tackle these unprecedented challenges, we are making £51 million available to develop our own bespoke household support fund to help families facing the cost-of-living crisis to pay their bills this winter. The household support fund will help to mitigate the UK Government decision to cut the £20 universal credit lifeline for tens of thousands of families, despite widespread representations to halt that cut, made again here today.
I want to talk about the household support fund because the first phase will provide families with extra help to pay their energy bills over the winter, and give extra funding to food banks and community food schemes. More than £38 million will be made available through a winter fuel support scheme, as we've heard today, for households in receipt of working-age, means-tested benefits. It is important to share the information: the scheme will open for applications on 13 December and eligible households will be able to claim a one-off £100 cash payment.