The pandemic, soaring inflation and energy costs,  stagnating wages and years of attacks on social security have created the worst household debt crisis in living memory.

Expert free debt advice has never been more important to help struggling households navigate this crisis, and demand is rocketing. StepChange Debt Charity reports client numbers increased by 32% between January 2022 and January 2023 (see page 5), while new clients assessed for debt problems at Citizens Advice increased by 88% in the same period.

Debt advice keeps people in their homes, keeps the bailiffs away, keeps families together, keeps the heating and lighting on, stops people going to prison for debts like fines and council tax, and has a massive benefit to mental health. But debt advice services are overworked and badly underfunded. Community-based services like Citizens Advice and Law Centres have seen debt advice funding cut by 21% in real terms compared to before the pandemic, while Unite members at StepChange Debt Charity are facing an estimated 200 job losses.

What are Unite’s demands?

The Money & Pensions Service funds debt advice with an annual levy on businesses. But this is only paid by consumer credit and mortgage lenders, and other businesses which create or profit from household debt, such as energy, water, telecoms and bailiff firms do not have to pay it. 

Yet many of these firms are making obscene profits. In February alone:

  • British Gas parent company Centrica announced its annual profits had trebled to £3.3bn
  • Energy company EDF announced annual profits of £1.1bn
  • The big 4 UK banks announced £19.8bn profit in a 9-month period

Politicians have a choice to make. The government must urgently increase the debt advice levy. There is precedent for this when the levy was increased in 2020 in anticipation of higher demand during the pandemic, but the demand for debt advice now is far higher than it was three years ago.

The government must also extend the levy to all businesses which contribute to household debt problems. Corporate profiteers like the big energy firms cannot be allowed to take billions out of our economy without paying their fair share towards fixing a debt crisis they helped to create.

Unite’s national officer for the Community, Youth Workers and Not-for-Profit sector, Alan Scott – himself a former debt adviser – has written to the chancellor Jeremy Hunt MP to set out these demands.

Our day of action

On Monday 13 March, Unite for a Workers’ Economy organised a historic first day of action in London in protest at the underfunding of vital debt advice services.
Demonstrations were held outside the three government departments which control debt advice funding – the Department for Work & Pensions, HM Treasury and the Money & Pensions Service.

Frontline workers from Unite Debt Advice Network travelled from as far as Cornwall to stand up for better pay and conditions, and a better service for their clients. And Unite Community members from across the London and Eastern region, many living on low incomes and affected severely by the cost of living crisis, joined the demos.

At the same time, supporters around the country bombarded the social media accounts of the three government departments with our Save Debt Advice message. 

We handed in copies of a petition supporting our demands, and signed by nearly 2,000 Unite members and debt advice workers. A slate of debt advice experts addressed the demos, including:

  • Tanis Belsham-Wray, chair of Unite West Yorkshire & Humber Community, Youth Workers and Not-for-Profit branch
  • Joe Cox, senior policy officer at Debt Justice
  • Damon Gibbons, director of the Centre for Responsible Credit
  • Ripon Ray, host of the Debt Talk podcast
  • Chilli Reid, executive director of Advice UK
  • Alan Scott, Unite national officer for the Community, Youth Workers and Not-for-Profit sector

They spelled out exactly why debt advice is essential, and why secure jobs, decent pay and manageable workloads are critical to keep services running – and that means an emergency injection of funding. 

This day of action marks an escalation in the campaign to Save Debt Advice, and if our demands on the chancellor are ignored, action will continue.