Item 6 on the agenda is a debate on the Equality and Social Justice Committee report on debt and the pandemic. I call on the Chair of the committee, Jenny Rathbone, to move the motion.

Motion NDM7879 Jenny Rathbone

To propose that the Senedd:

Notes the Equality and Social Justice Committee report, 'Debt and the pandemic', laid on 15 November 2021.

Motion moved.

Thank you very much for calling me. This is the first debate on the work of the Equality and Social Justice Committee. Our report looked at the impact of the pandemic on personal indebtedness and how the Welsh Government and public services should be responding. At the forefront of everybody's mind today—apart from the fate of our current Prime Minister—is the unprecedented rise in energy prices. That wasn't, however, at the top of everybody's minds when we started consulting stakeholders in August and took oral evidence in September and October. At that point, rent and council tax arrears were and are just as significant as food and fuel bills for households whose income is insufficient to meet all their everyday needs. As widely predicted, all these problems are getting worse, not better.

A year into the pandemic, StepChange captured the fact that one in five households were in financial difficulties, and at least one in 12 households had fallen into debt. The Bevan Foundation report highlighted how at least one in eight households, at that point in May last year, had had to reduce food shopping to pay for heating, or not heating the house properly to keep food on the table. Six months later, further research by YouGov, commissioned by the Bevan Foundation, tracked how the situation has deteriorated in that last half year. The crisis, unfortunately, is likely to unravel further as a result of the cruel cut to universal credit, the end of the furlough payments related to COVID, and the upcoming rise in national insurance contributions. 

The public is not stupid. Many of our witnesses and contributors foresaw this huge hike in energy costs that households are now grappling with. They predicted that this was going to be a tsunami or perfect storm, which, I'm afraid, is now staring us in the face. This is not simply an energy crisis compounded by a climate emergency. Britain is now significantly poorer as a result of the decision taken to withdraw from the single market with our European neighbours, and Wales has taken that hit particularly badly as manufacturers are much more vulnerable than services to increased bureaucracy and hold-ups at ports. And that hold-up has obviously translated into significant rises in the costs of everyday foods. Bluntly, the problems are getting worse, not better. The rising cost of living, and the end of key measures of Government support, all point to a very, very difficult period ahead for many, many households.

What can we do about this? Well, first of all, we must work together. We made 14 recommendations in our report, covering everything from data collection to council tax arrears, and I would like to thank the Minister for Social Justice for her helpful and constructive response to the committee's recommendations, having accepted nine recommendations in full, and accepting the remaining five in principle. 

Building on the warnings from our witnesses, it is vital that people struggling to make ends meet are not falling into the hands of people who only make things worse for them. The Welsh Government's creation of the single advice fund two years ago, integrating all advice services, makes it more likely that people will get help at an earlier stage in their indebtedness. There's the Welsh Government decision, in light of our recommendation, to use community-based organisations to spread the message of hope and help to targeted groups who may not know about these single advice services. Also, we need to build on the very effective social media messaging they've used to increase the take-up of benefits to now tackle reducing the stigma associated with being in debt. People must come forward and get help from those who really can offer good alternatives to the doorstep lenders and the loan sharks. 

Fuel poverty, we can all agree, is now a major cause for concern, and the Welsh Government's £100 winter fuel payment to low-income households provides some short-term respite but it's not sufficient. The committee will return to the need for accelerated plans to tackle fuel poverty, including bringing all social homes up to energy rating A in the shortest time possible, in our forthcoming inquiry into the Warm Homes programme and what we need to do about fuel poverty. But we cannot lose sight of other challenges. 

For example, the most common debt issue raised with Citizens Advice in 2020 was council tax debt. The financial year 2020-21 saw the largest single-year increase in council tax arrears in 20 years, rising to nearly £157 million. We heard concerns about pockets of bad practice in terms of how these debts are sometimes being collected, and very much welcome the Welsh Government's willingness to review how the council tax protocol for Wales is working, whether it needs to be strengthened or be placed on a statutory footing. We welcome the Welsh Government's openness to contemplate debt bonfires of public sector debts that are likely to be irrecoverable, but we all need to recognise that there are opportunity costs to such a decision. 

Housing debt and evictions were also featured as having got a lot worse, and witnesses confirmed that the ban on evictions across the whole rental sector had been vital in preventing homelessness during the height of the pandemic. Recommendation 10 points to the importance of maintaining that section 21 six months no-fault evictions notice period once any COVID-related regulations cease. We note that the Welsh Government, in its response, is committed to finally implementing the Renting Homes (Wales) Act 2016 before this summer's recess, and the Senedd must ensure this deadline is met. We hope the pandemic will recede, but its legacy of indebtedness will endure well beyond that. 

On a related matter, we were concerned by allegations from Shelter Cymru of alleged police involvement in illegal evictions during the pandemic, repeated in both their written and oral evidence. We sought further details from Shelter on exactly what information had been shared with the police. After our report was published, I wrote to all four police forces in Wales asking them to respond to these allegations, and it is important to note the police response, which is that an urgent request, as soon as they were made aware of this problem, was made to Shelter Cymru to provide further information, and this was followed up by a further request in October. But Shelter, unfortunately, responded to say they were unable to give any additional details, due to staff shortages, at that point. Some limited additional information was received on 19 October, but that was insufficient to enable investigation of specific cases or allegations. I received that letter on 14 December. I want to raise this because I think we need to stop any hares running here. It's entirely appropriate for Shelter to pick up specific cases of allegations of police involvement in illegal evictions, but they need to do so in a meaningful way. Shelter has yet to provide the police with the dates and addresses of where these alleged illegal evictions occurred, as that is the only information that would allow the police to chase that up in terms of the operational responsibilities. Until or unless Shelter or anyone else has exhausted the pursuit of a complaint against the police or any other organisation, they shouldn't be going public on it. They need to give the organisation complained against the opportunity to respond. 

Turning to another matter, we received compelling evidence on the role of affordable credit providers, whether they are credit unions or Purple Shoots, an interesting not-for-profit microcredit provider, who offer a much safer option than illegal lenders or high-interest credit providers. However, not everyone is aware of these sorts of organisations or what they can provide, and, therefore, resort to or are pressured into much more damaging solutions. There's a role here also for the discretionary assistance fund in its future guise, because that played a very significant part in helping people with discretionary awards during the pandemic. We heard from a range of stakeholders that the Government should consider making the flexibilities that were available in the DAF during the pandemic a permanent feature, and they also want to see the application process streamlined and written in easy-to-understand language, so everybody, hopefully, can access it. I'm very pleased that the Government has accepted that these issues will be considered in its review of the successor to the DAF. 

I want to thank all those who contributed to the inquiry, either by submitting evidence or taking part in one of our online focus groups. I want to highlight the pivotal role of the Bevan Foundation. Its work on debt raised it up the agenda for all of us, and their initial report into the pandemic and debt in Wales certainly helped prompt the committee into undertaking this inquiry as our first one. I also want to thank Rhys Morgan and the rest of the clerking team, the research behind this report led by Gareth Thomas, and the excellent outreach engagement work with the public led by Rhys Jones. I hope that Members will use this opportunity to share with us what they think we can do to really try and manage these very, very difficult problems, and what strategies we are able to pursue in Wales to prevent more people going into debt and, indeed, possibly becoming homeless and destitute. I look forward to hearing Members' contributions.

Thank you to Jenny as Chair of the committee, and other members of the committee and all of the officials for this debate. And thank you too to all of those who gave evidence.

Back in March 2020, we were told that we were all facing the same storm, but whilst we may have been facing the same storm, we weren't all rowing in the same boat—those on low incomes, the self-employed, the 3 million United Kingdom taxpayers not entitled to Government support, single parents, renters, and the list goes on. A separate report published today stated that UK households have suffered the biggest fall in available cash in eight years, and that the unique pressures facing young people risks creating a generation precariat, with only half of young adults able to make ends meet each month.

On one specific issue in the report, I was very pleased to see in the response from the Welsh Government an acceptance of the committee's recommendation to pursue an idea of a debt bonfire, which the Welsh Liberal Democrats put forward in last May's election. We propose that the Welsh Government make available a limited fund to purchase and write off public sector-related debt, where this may prevent someone from accessing services or support. A debt bonfire could be a powerful solution for those who are trapped under the weight of debt and who can't escape debt because of the limited support available to them. And, of course, there are many, many other recommendations in the report that I welcome.

But the reality is that there are steps that the United Kingdom Government could be taking now that could give people a brighter outlook for the year ahead. One is the Conservatives revisiting the decision to freeze the personal tax allowance, which will see 85,000 people in Wales paying more income tax. They could have opted for a fairer way of raising additional revenues than through hiking national insurance contributions. People are facing this cost-of-living disaster that we're hearing so much about, and we have to do everything possible, both Governments, to ensure that the pandemic and the rapidly rising cost of living do not leave millions behind. Diolch yn fawr iawn.

As a member of the Equality and Social Justice Committee, I am delighted to contribute to today's debate on our report, 'Debt and the pandemic'. The pandemic has taken its toll in different ways. For many people it hit financially—they faced job insecurity, less income, higher bills. It has compounded the financial problems that families have been grappling with.

I believe this inquiry and our report is a testament to the enthusiasm of all Members who wanted to understand more about the complexities of the debt experienced by people in Wales and the impact of the pandemic on individual and household finances. I want at the outset to thank our Chair, Jenny Rathbone, who has skillfully led the committee through this inquiry, and the Minister for accepting in full or in principle the recommendations that we settled on.

It is the response of the Government that I want to focus on this afternoon, because as the Minister rightly said in her letter to the committee, there is an urgent need to tackle the growing debt burden that is being faced by some of our most vulnerable households in Wales. I also want us to remember that, for many people, the challenge of managing debt and attempting to resolve their problems can be a lonely affair. There is a significant risk that those in society with less to start with will witness a disproportionate impact on their financial health because of the pandemic, and this has been well documented in other studies beyond this inquiry—[Inaudible.]—and increasing worries, strain, depression and longer lasting mental ill health.

According to the mental ill health charity Platfform, these anxieties and distresses have not, however, been experienced uniformly, and there is good evidence that the pandemic and our responses to it have widened these health inequalities. They also observe that mental health is known to be linked to wider inequalities that are prevalent in our society. There's a link between financial health and mental health, and the effect of the pandemic on the financial health of those who were already struggling is going to provide the basis for a range of ongoing challenges that this Government needs to meet.

The evidence to the committee was comprehensive. The recommendations are based on that evidence and the discussions that followed. There appears to be little disagreement between the committee and the Government about the seriousness of the challenges that many people face in Wales, although I do want to see some speed put into the work the Government is committed to.

I want to raise three points in support of the committee report this afternoon. Firstly, the importance of data. Without information we will have little ability to affect the life chances of those in debt. Planning will be pointless without understanding the complete picture, which is why I welcome the Government's acceptance of the committee's view that their equalities data unit should work with organisations in the sector to collate and publish annual data on debt in Wales, broken down by protected characteristics. My concerns about health inequalities, especially mental ill health, should feature in the work undertaken, so that we fully understand the consequences of the debt position beyond the financial.

Secondly is the disproportionate impact of debt and the pandemic on different groups. In our report we outline how much of the evidence pointed to the differing impact on different groups. Organisations such as StepChange, Citizens Advice and the Bevan Foundation provided evidence that some groups are more likely to experience debt than others, such as people who are unemployed or in insecure work, people whose work has been affected by the pandemic, single parents, parents with young children, renters, people from some ethnic minority communities, and people with disabilities. In addition, the Bevan Foundation highlighted that households with an annual income below £40,000 a year were significantly more likely to be in arrears than higher income households. Furthermore, they found that people living in social rented accommodation are more likely to be in arrears on every major bill than any other group. This evidence demonstrates how complex the picture is and how it will not be resolved quickly.

Thirdly is the importance of us holding the Welsh Government to account and returning to this subject as soon as we can. I appreciate that there are matters beyond our control, but people expect Welsh Ministers to act. In doing so, I expect that other departments within Government should be engaged in this agenda as we also seek to provide a stronger economy from which people should be able to benefit.

Can I ask you to conclude now?

Yes, Deputy Presiding Officer. Along with that, there's a medical debt, which we have not addressed so far, but the Chair has agreed that we'll be looking into that. It is a huge concern for me, personally, that this is going on here, and we are not doing anything about it. Thank you very much.

All of us in the Siambr read numerous reports and briefing documents about the problems that we need to tackle, but I'd like to note, as a new Member of the Senedd, that this was my first committee inquiry, that into the pandemic and debt, and that the direct evidence that we heard about how we need to do more to support families in keeping their head above water had deeply affected me. Because, even though the report mentions the pandemic impact on debt levels, it was clear from the evidence that these debts had been exacerbated, rather than caused, by the pandemic. 

The report has found that 18 per cent of adults in Wales—a higher proportion than England and Scotland—have faced financial hardship as a result of the pandemic. The indicators that led the committee to hold an inquiry into this issue in the first instance have turned into a clear and frightening depiction of a crisis, the like of which hasn't been seen since the financial crisis over a decade ago. And there is worse to come.

The words used were striking and should give us all pause. I have quoted from the report in previous debates in this place, but they are worth repeating.

'What really worries me', said one witness, 

'is a potential 30% increase in gas and electricity prices in 2022. That is going to push people into Victorian poverty.'

Well, 2022 is here. The warnings were accurate, if not slightly conservative, bearing in mind the Centrica boss's warning today regarding gas prices, and the older people's commissioner's concerns today about the ensuing impact on pensioners.

The pertinent question in the report is why so many families are in such a vulnerable position in the first place. What can be done about this, and what else could be done to protect people in any future crises?

Those who are most at risk of suffering problem debt are those households that already face socioeconomic disadvantage in our society, people such as renters, those on low incomes or in insecure employment, disabled people, children, single parents, older people, care leavers, and people from ethnic minorities. The report contains numerous examples of the way that problem debt disproportionately impacts some groups in society and increases socioeconomic inequality in Wales. For example, disabled people have been twice as likely of being in arrears during the pandemic, and the Bevan Foundation reported that its research had demonstrated that people living in social housing were more likely to be in arrears for all bills than any other group. We heard that 43 per cent of survivors of domestic abuse had been pushed into debt.

We have to take major steps as a matter of urgency to tackle this problem of debt affecting children's welfare—they are our nation's future. The revelation that one in five families has had to cut back on items for children, and one in 10 families with two children has had to cut back on food, is difficult to comprehend in the Wales of the twenty-first century—a Wales that is part of a state that is one of the richest in the world. It is disgraceful. It is unforgivable. And it's a problem not just for today or tomorrow, but one that will be with us for decades to come if we don't take urgent action. Living in a household with debt problems, facing financial strain, is an adverse childhood experience, and can have a lifelong negative impact on a young person's health and opportunities.

The Government must seek solutions of all kinds, with regard to housing, taxation, public transport, and support payments such as the EMA. In accordance with the calls made in the committee report, Plaid Cymru wants to see a new focus from Government on accelerating work to ensure that all social housing is A-rated for energy efficiency, and to ensure the better promotion and support of debt advice services and sources of affordable credit amongst those at greater risk of debt, and making the temporary flexibility in the discretionary assistance fund permanent. It is concerning to see that the funding allocated to the fund in 2022-23 is lower than it was in the previous two financial years.

I am pleased that the co-operation agreement with Plaid Cymru contains vital measures to tackle poverty and its impact on families, such as free school meals for all primary pupils, expanding free childcare provision to include two-year-olds, reforming council tax, and ensuring measures to tackle the housing crisis. We support the recommendations in the report calling on the Government to take specific steps as a matter of urgency, and, as I have previously said, Plaid Cymru believes that there are other steps that the Government could take that could light a candle in the dark. The co-operation agreement also includes a commitment to devolve the administration of welfare. 

The Member must come to an end now, please.

I am coming to an end—final sentence.

We must ask ourselves for how much longer we can afford to accept the restrictions imposed on us as a nation by an unbalanced union, a Westminster Government that doesn't care a jot about Wales, and a completely inadequate and unjust funding formula. How many other reports like this one, containing clear warnings that something has gone badly wrong, must we read before we demand the powers to safeguard and lift up our people? Thank you.

As a member of the Equality and Social Justice Committee, I am pleased that this was our first inquiry, and I would like to thank my fellow committee member Sioned Williams, along with the Bevan Foundation's research, for suggesting this, and my colleagues on the committee, the clerks and the whole team that has been working behind the scenes to help us. 

Tackling household debt is incredibly crucial and timely, and it often relates to people who are suffering in silence across our communities in Wales for a variety of reasons. In my own constituency of Bridgend, Citizens Advice services helped nearly 1,000 people with debt issues over the last year, and they've seen a surge in demand over the last few months. In Bridgend alone, Citizens Advice calculated a 74 per cent increase in people seeking help for issues of debt, compared to pre-pandemic figures. Shelter Cymru has told me that vulnerable residents in Bridgend pay nearly £3,000 a month for temporary accommodation. There are people in my constituency whose rent is so high that they are forced into using food banks to feed themselves and their families and are spiralling further into debt. 

There is no denying that the COVID-19 pandemic has exacerbated this risk of debt for vulnerable households. I first became aware of issues with this in my community within the first few days of the first lockdown. I had a call from a Bridgend county borough councillor, Jane Gebbie, explaining to me that there were people in their homes in her ward of Pyle and Kenfig Hill who couldn't go to the newsagent to top up their energy or fuel card, so they were sitting in their homes freezing. And the solution that they found for this—the only thing they could do in those initial days—was just to get on the phone to the energy companies and beg them and explain that it was an emergency and get them to send out pre-topped-up cards for people and figure out how to pay for it afterwards, which is what they did. It was a race against time for the volunteers at Talbot community centre in Kenfig Hill to come up with that solution.

And with the expected rises in energy prices, the cut to universal credit and the upcoming national insurance increase, 2022 poses a great threat to the most vulnerable households, as we've heard from my fellow committee members today. I know that the Welsh Government continues to make strong and urgent representations to the UK Government on behalf of those in our community who are suffering, yet time and time again, we see decisions made in Westminster that penalise the most vulnerable and exacerbate conditions like fuel and household debt and poverty. Think tanks, as has been said today, have labelled 2022 as the year of the squeeze, and for many people that's the reality of the situation that they're in. From single parents to low-income households, those with disabilities and renters, how much more pressure is going to be put on them to stay afloat? Every £1 deducted in Westminster, every price increase on a food shop, is yet another shove into debt. The Welsh Government accepting all 12 of the recommendations by the committee is essential if we are to protect so many vulnerable households over the next coming months. The discretionary assistance fund and the one-off winter fuel support scheme providing a payment of £100 to eligible households are examples of the way in which those who govern in Wales are protecting the most vulnerable households in our community.

It was also vital to hear evidence from credit unions during our inquiry. I am a proud and longstanding member of Bridgend Lifesavers Credit Union, with over 5,000 members. Together, we are members of a worldwide group of financial co-operatives dedicated to improving the financial well-being of millions of people. There are no third party shareholders. Credit unions also pass any surplus profits made directly back to us and our community, and the staff are financially sympathetic. They don't just look at somebody like they're a credit score. This is why I am particularly pleased with the Minister's acceptance of and response to recommendation 12, to promote affordable credit sources among those at heightened risk of debt over the next six months. And some positive news today is that the Talbot community centre in Kenfig Hill that I mentioned earlier on, which did so much for people during the COVID pandemic who were getting into debt, they will be opening a credit union branch in the coming weeks, and this is going to save people in my community money and empower us and keep the money circulating within our community to benefit the many. 

I want to end by thanking everyone who provided evidence to us in this inquiry. Many are the voice of the people who are struggling. Debt can often come with feelings of incredible shame and denial, and you listen to people often working within systems that are very powerful and with bureaucracy that can be incredibly slow. Your dedication to helping people is really making a difference in people's lives.

I'd like to thank the committee for tabling this debate today, and for their work on this important report. Thanks too to everyone who contributed to the inquiry, which has painted a heartbreaking picture of the hardship that so many people in our communities have faced during the pandemic, hardship that they continue to face. It's difficult to comprehend the scale of the problem, and I’m pleased to see recommendations on what we can do in practical terms as a Senedd in the short term and longer term to ensure better support for people who are facing economic hardship that means that they have to go into debt to be able to afford essentials such as food, heating and clothes, things to which we all have a fundamental right.

Unfortunately, in my opinion and that of my party at least, Westminster continues to be largely responsible for the measures that could really help us tackle debt and payment defaults, as well as the increased cost of living. It does concern me a great deal that we have a Prime Minister and a Conservative Government in Westminster that have, time and time again, demonstrated that they don’t care a jot about the most vulnerable people in Wales, by introducing cruel measures that have a disproportionate impact on them, such as increasing national insurance contributions and cutting the universal credit uplift.

But, as we do everything within our power to press for the full devolution of welfare and taxation to Wales, the Welsh Government must do everything within its current powers to address the problems that debt creates for households across Wales. A key way of doing this would be through supporting people in debt to devolved public services, and I was pleased to see Jenny Rathbone talking about council tax in particular. The fact that this is one of the main forms of debt mentioned when people contacted StepChange and Citizens' Advice during the pandemic does mean that we have to tackle this issue. Jenny Rathbone noted that extraordinarily frightening figure, namely that council tax debt had increased to £157 million in 2020-21, which is an increase of £46.4 million as compared to the previous year, the biggest single increase in 20 years.

But our public bodies shouldn’t be creating more debt for people, and I hope today that we can all agree that we should be helping to prevent debt from arising in the first place, or preventing debt from becoming unmanageable. There are things that the Welsh Government could take action on in this regard and ensure that our councils adopt progressive policies to manage debt. Such a policy could ensure that councils identify and support households facing financial problems effectively, as well as preventing some of the cruel practices deployed by bailiffs, and preventing bailiff fees and legal fees from accumulating and increasing for those who are unable to pay them. Citizens' Advice found that a number of their clients had faced difficulties in agreeing affordable council tax repayment plans, and that some had been belittled and intimidated by bailiffs, despite being unable to make repayments or demonstrating signs of vulnerability. This is not right.

I’d also like to emphasise the impact that this has on individuals, something that can’t be overstated, in terms of their physical and mental health. Living in a home without heat as a result of fuel poverty can lead to or exacerbate a number of serious medical conditions such as heart attacks, stroke, bronchitis and asthma, while uncertainty regarding food can lead to malnourishment, which is related to other health issues. Inevitably, therefore, debt, financial uncertainty and poverty often lead to poor mental health, leading people to feel that their lives are entirely out of their control, which can also lead to feelings of hopelessness, embarrassment, guilt, depression and anxiety. The social stigma associated with debt can also lead to individuals feeling isolated, meaning that they keep their problems to themselves to an extent that any support they do receive is inadequate.

We all, therefore, have a responsibility as Members of this Senedd to do everything within our power to support our constituents, and that's why I am today pleased to have this opportunity to contribute to this debate and support the committee’s report. Action and support are urgently needed, and I very much hope that we can send a clear message to everyone suffering as a result of debt that support is available, and that we will do everything we can in Wales to improve their situation.

I call on the Minister for Social Justice, Jane Hutt.

Diolch, Dirprwy Lywydd. Thank you for the opportunity to respond to this important debate on the 'Debt and the pandemic' report, published by the Equality and Social Justice Committee, with such a strong debate this afternoon, which adds such weight to your report and recommendations. I welcome the report, with its insightful recommendations. I thank the Chair and members of the committee for your significant contribution and hard work during your inquiry.

Before Christmas, I also met with the Bevan Foundation to discuss their latest survey within their 'A Snapshot of Poverty' report series. The figures show that personal debt is now, as you said in the debate, a major problem in Wales. Twenty-five per cent of people surveyed said that they had had to borrow money since May 2021, and 12 per cent had already fallen behind with their repayments by at least one month.

I fully agree with the committee on the importance of tackling the growing debt burden that's being faced by people in Wales. Our efforts to find them a pathway out of debt will be strengthened by implementing these report recommendations. There are more actions, clearly, that we can take, and we will take, as a result of our programme for government, our co-operation agreement with Plaid Cymru and also other dimensions that, in fact, we've been debating and discussing over the past two days, in terms of the cost-of-living crisis and your next inquiry.

It has never been more important than it is now that services such as debt advice and affordable lending reach people who are at higher risk of getting into debt. I welcome the recommendations in relation to wider promotion of our services. We will be supporting all our partners to work with more community groups, who already have very established relationships in place in local communities with people who need the help the most.

You engaged with those local groups, I know, and you've mentioned them. The recommendations relating to our existing support mechanisms for those in financial crisis through the discretionary assistance fund are very relevant, given that we will see increasing numbers of people looking to us for support, so I welcomed that recommendation on the DAF.

I also welcome the written statement that has just been published by the Minister for Climate Change, which, hopefully, you've been able to have sight of, extending the tenancy hardship grant to cover arrears built up to 31 December 2021. The statement confirms that eligibility has been extended to social housing tenants not in receipt of housing-related benefits. This brings their access to financial help in line with all other renters. You called for that in recommendation 11, so that's also a positive indication of the Government's response to the report.

The evidence is clear that the impact of problem debt upon the well-being of individuals and their families can be negative and long-lasting. However, the Welsh Government is doing all that it can to support people in Wales through the cost-of-living crisis that they are facing. On 16 November last year, I announced a £51 million package of support for low-income households to meet the immediate pressures of the cost-of-living crisis this winter.

We've talked a lot this afternoon about the winter fuel support scheme—£38 million for householders in receipt of means-tested benefits. Eligible households can claim a one-off £100 cash payment from their local authority to be used towards paying winter fuel bills. But I'm under no illusion that that payment will fully compensate households that lost over £1,000 a year when the £20 a week universal credit payment ended. However, it will help some keep their homes a little warmer this winter without building up fuel debt.

But we do have—as the Chair, Jenny Rathbone, has said—a tsunami, a perfect storm, of a cost-of-living crisis, which is now being expressed in terms of the clear evidence. We do know that people can recover from debt. What they need is access to free, quality, assured advice. That’s why the Welsh Government's long-standing commitment to funding advice services is so important.

It's rare that debt is the only problem that a person will have. It makes no sense to tackle a person's debt if they also have a welfare benefit problem or a housing problem that's left unresolved. So, the Welsh Government's single advice fund offers integrated services, helping people to deal with their financial problems together with other social welfare problems, and it does ensure that services tackle the underlying causes of debt and helps people put their finances on a more sustainable footing.

And thank you for acknowledging the role and increasing workload, Sarah Murphy, that Citizens Advice and Shelter have experienced in Bridgend. That will be reflected across all constituencies here today across Wales. But it is important to see, and as Sioned Williams said, that this is an exacerbation of inequalities that we've seen as a result of the pandemic. And it's good to see a credit union branch opening in Kenfig Hill.

We know a lot of people are not claiming what they're entitled to. That's why our recently launched second national 'Claim what's yours' welfare benefit take-up campaign is important. Our first campaign helped people to claim over £650,000 of extra income. And I do want to build on the excellent communications campaign. Thank you for acknowledging it, Jenny Rathbone, in terms of that sort of different way of reaching out: social media. It's very important, as Jane Dodds has said, in terms of reaching that younger generation, the generation precariat who are so at risk, but also diminishing the stigma that has been so associated with debt and encouraging people to seek advice on their entitlements—that's the key point; it's their entitlements—before they escalate to a crisis.

And I know that debt owed to the public sector creditors, including local authorities, with council tax, is a growing concern. Heledd, you've mentioned that today, and I'm pleased that work is under way to review the council tax protocol for Wales. It's there in our response to your recommendation. It will include exploring how successful the protocol has been in supporting vulnerable debtors, and it's very good that you had this inquiry to look into this. I mean, during 2021, we provided £22.6 million to cover some of the shortfall in council tax income due to those lower collection rates, and we are assisting with losses and also help to fund for the additional demand that's coming forward for council tax reduction as a result of COVID as well.

So, it's important that we don't underestimate the financial challenges being faced by households due to the rising costs of their energy bills, and addressing energy costs through measures like the price cap sits outside devolved competence, but we are raising these issues with the UK Government. Julie James and I wrote to the Secretary of State, Kwasi Kwarteng, today; I'm sharing that letter so that you can see what we've been calling for. Our plan to tackle fuel poverty was published in March 2021 and there are 10 short-term actions to be delivered by March 2023. We are making progress on all of these. And, of course, the Warm Homes programme, and I've already mentioned 67,000 households benefiting from home energy efficiency measures. So, I do welcome the inquiry into fuel poverty—that direct focus—and the Warm Homes programme that you'll shortly be holding. And please do share any emerging themes with us as you move through that inquiry.

Accessing high-interest credit is another key contributor to being in problem debt, as you've raised, yet many people believe they have no alternative other than borrowing from a high-cost lender. It is therefore important that we encourage people to access credit unions, and that's why I've made £60,000 available for credit unions to promote their services throughout Wales this winter.

Finally, inequalities in our society have been exacerbated by the pandemic, compounded by the inaction of the UK Government to address the very real and very grave cost-of-living crisis. The financial pressures that face households across Wales will now intensify, due to the combined impact of UK Government policy decisions to end the universal credit uplift and significant cost of living increases. And, yes, there is, Altaf Hussain, a clear link between health inequalities and debt. The costs of food and fuel are soaring and Senedd Members have made powerful contributions today.

So, in conclusion, I thank the committee for having the foresight to undertake this timely inquiry. I look forward to playing my part in making sure that the report's recommendations are implemented, as they will help shape and improve policy, and help prevent debt as well as support people in debt. This is a key issue for social justice and equality for this Welsh Government and for this Senedd and your committee, and your report will help Wales to respond effectively and robustly to tackle these deep income inequalities in Wales. Diolch.

I call on Jenny Rathbone to reply to the debate.

Thank you very much indeed for all your very useful contributions. As Jane Dodds said, we've all been weathering the same COVID storm, but we've not been rowing in the same boat; I think that's a really useful allegory. I think it was particularly useful that Jane Dodds mentioned the debt bonfire issue and the legacy debts that really hang around people's necks. For example, Shelter highlighted that people who got into rent arrears years ago are still being prevented from getting back onto the social housing waiting list, and that's a really good example of how once in debt, it's very, very difficult for people on low incomes to get out of it. It's fine if you have very large debts, then the bank's wanting to give you some more, but that's not the case for the people we're looking at here.

Thank you, Altaf, for highlighting the link between financial health and mental health, and the disproportionate impact that this has on people's ability to function and to get themselves out of debt. Also, I think the important point you raised about how we really do need good information to understand the complexity of the debts that people are suffering, because the equalities data unit is going to really bring together all these issues so that we have a better understanding of the link, for example, between debt and the age or the status of individuals, whether they're disabled, whether they're young, the type of accommodation they're in. So, I think that's a very important point that I'm sure the Minister will be taking a very close interest in.

As Altaf said, people expect all Governments to act, whether it's the UK Government or the Welsh Government, and they don't expect people to be bystanders in such a crisis. And turning to what Sioned said, that all the problems that people already had, they were already indebted before the pandemic, but this has been exacerbated by the pandemic, highlighting the fact that we could be facing Victorian levels of poverty, which is very, very scary. So, problem debt increases the inequalities that already exist in our society, and being in one of the richest countries in the world and seeing people having to cut items of food in order to heat their home is really unacceptable.

I think that Sarah Murphy gave us also some very useful particular instances of how the pandemic and the debt crisis are affecting people in her own constituency, and it's very important to look at it in the granular detail that she has done. I think the description of the people who couldn't even go to the newsagent to top up their prepayment cards—they had to appeal to the charity of the energy companies to send them some energy credits, so that they could keep the lights on and have some heating, and just worry about the cost later. I think Sarah also mentioned the important role that credit unions can play and the fact that there are no third-party shareholders; they look at people as human beings, and the money that they are handling, it keeps circulating in local communities. These are really important points about the foundational economy.

You need to conclude now.

Okay. I thank you, Heledd, particularly, as you weren't part of the inquiry, for your points about council tax and the important role that we collectively have to play to ensure that public bodies aren't making the problems worse, and also ensuring that we cut the role of bailiffs harassing people in difficult circumstances.

I think the Minister made it abundantly clear in her response that she takes very seriously the work that we have set out in front of us, and the work we all face in responding effectively to this unprecedented debt crisis occasioned by so many different issues. And I'm sure we will be coming back to this in the future.

The proposal is to note the committee's report. Does any Member object? There is no objection, therefore the motion is agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.