The Rt Hon Kwasi Kwarteng MP
Secretary of State for Business, Energy and Industrial Strategy
Department for Business, Energy and Industrial Strategy
1 Victoria Street
London, SW1H 0ET
Dear Secretary of State,
Deb relief orders consultation
I have been contacted by a number of constituents who have concerns regarding Debt Relief Orders (DROs) and the debt crisis more widely and I am asking for a review of DROs. The Money and Pensions Service has estimated that there are three million additional people who will need debt advice this year due to the COVID-19 pandemic on top of the five million other households who were already overindebted.
The Government has been consulting on changes to the monetary eligibility criteria for DROs, with a proposal to increase the total amount of debt allowable under a DRO to £30,000, the value of assets an individual can own and be eligible to £2,000 and the level of surplus income allowed to £100 per month.
While I welcome these changes I support further, more generous changes that would increase eligibility still further and enable 92% of those currently excluded by the debt limit to access a DRO. Please support the following changes:
- Additional pre-existing debts should be allowed to be scheduled in the DRO
- The vehicle value threshold should be increased to £2,000 and mobility scooters excluded
- Increasing the DRO limit to £50,000 and
- The Insolvency Service should commit to regular reviews of the DROs eligibility criteria at least once every three years.
I look forward to your response.
Labour Member of Parliament for Putney, Roehampton and Southfields
Shadow Minister for the Cabinet Office
House of Commons, London, SW1A 0AA