Problem debt

MQT on 2015-03-25
Session date: 
March 25, 2015
Question By: 
Jenny Jones
City Hall Greens
Asked Of: 
The Mayor


Will you press the Government to reverse benefit cuts and sanctions which are getting people in London into problem debt?


Answer for Problem debt

Answer for Problem debt

Answered By: 
The Mayor

Boris Johnson (Mayor of London):  Yes.  To be fair, Jenny, there is a risk that people are getting back into debt again and not just people on welfare.  People in lots of income groups are starting to rack up debt again in a way we should watch.  The answer is not to backtrack on important reforms of welfare, which have a lot of support around all parties from our coalition partners and brothers and sisters in the Liberal Democrats ‑‑


Jenny Jones AM:  Please focus.


Boris Johnson (Mayor of London):  ‑‑ and of course from Labour as well, who campaigned to ‑‑


Jenny Jones AM:  Please focus on my question.


Boris Johnson (Mayor of London):  I am answering your question.  If you would be civil for a second ‑‑


Jenny Jones AM:  No.  I am asking about your belief in sanctions.  Are you still supporting sanctions?


Boris Johnson (Mayor of London):  I am answering your question.  You have asked me, “Will you press the Government to reverse benefit cuts and sanctions”, and I said I do not think we should be scrapping welfare reforms because they are vital.


What we should be doing is helping Londoners with debt advice.  Credit unions are very important.  We promote them on the GLA website.  We have an annual Know Your Rights campaign.  Victoria [Victoria Borwick AM, Deputy Mayor] has led the way on that.  We are championing financial literacy in schools so that people understand how debt works, how interest works and the terrible traps that they can get into, particularly with payday lenders.  As I said, we continue to reduce the burden on low-income Londoners wherever we can, cutting council tax and helping people with free transport of all kinds and that is the best way forward.


Jenny Jones AM:  What we found in the Economy Committee was that half a million Londoners are now in problem debt and a London School of Economics (LSE) report, which we looked at as part of the Committee examination, said that welfare reform is greatly increasing and complicating people’s insecurity.  Uncertainty is now prevailing around benefits due to sanctioning and people are struggling to pay for basic items like food and heating.


I have some stories here.  I wondered if you had heard these.  For example, on the sanctions, a man had a heart attack.  He was taken to hospital, missed an appointment and was sanctioned for nine weeks.  A young couple’s address was wrong on the Department for Work and Pensions website computer and they had no money for a month.  A man was sanctioned for going to a job interview instead of an appointment.


Sanctions are actually making things worse.  They are so strict and so inflexible that they are creating more problems.  Do you still support sanctions?


Boris Johnson (Mayor of London):  Where you have clear cases of a lack of common sense or inhumanity such as you have outlined, although I cannot comment on the detail of those cases, it is absurd.  What your question asks is whether we should reverse the benefit reforms or benefit cuts and I do not think that is something that would be sensible.  The Housing Benefit had to be tackled.  It was mushrooming.  You have to help people to get into work and that is entirely reasonable.


Jenny Jones AM:  That is an interesting comment because you had a workfare scheme.  You co-funded a workfare scheme called the Day One Support for Young People trailblazer and actually young people aged 18 to 24 who went on your scheme were half as likely to get a job as people who were not on your scheme.  It was worse for people to be on your workfare scheme with sanctions than it was for people not to engage.


Boris Johnson (Mayor of London):  You are being a bit unfair there, if I may say so.  You are being a bit unfair there because ‑‑


Jenny Jones AM:  No, the facts are the facts, Mr Mayor.


Boris Johnson (Mayor of London):  ‑‑ I remember vividly the scheme and we were trying to help some people who had had real difficulty finding work.


Jenny Jones AM:  You made things worse for them.


Boris Johnson (Mayor of London):  Actually, if you look at the record of this city and this Government over the last five years or so - and you talk about 18 to 24 year olds - we have young people not in education, employment or training (NEETs) at the lowest level for 25 years.  That is a fantastic achievement and you should be proud of that, Jenny.  You should be proud to be participating in London government and ‑‑


Jenny Jones AM:  You should be ashamed of sanctions.


Roger Evans AM (Chairman):  The Green Group are now out of time.


Boris Johnson (Mayor of London):  Unfortunately I do not run the welfare system, but it would be wrong to scrap welfare reform.