Glenys Thornton: Back the bill to stop renters being punished for being poor

It shouldn’t cost more to be poor. But it does. The poverty premium means poorer people end up paying more for utilities, loans, insurance and household goods (witness the BrightHouses of this world). These extra costs can total £1,190 for some households.

People that can least afford it are ripped off. Without a credit score, they’re turned away by mainstream providers as riskier customers. But the only way to build a good score is to have credit in the first place. The result? As The Young Foundation has found, it’s unaffordable credit, problem debt and preventable poverty.

Currently, renters can’t use the strongest asset they have, their tenancy history, to help improve their credit score and become digitally authenticated. But action is being taken to fix this. Lord John Bird, founder of The Big Issue, had the second reading of his Creditworthiness Assessment Bill last week. The bill will require lenders to take rental and council tax payment history into account when assessing borrowers’ creditworthiness.

John’s Bill is based on work by Big Issue Invest, which developed the Rental Exchange, and is helping record tenants’ payment histories. More than 75 per cent of tenants have the potential to see their credit score rise under the scheme, and an increase from 39 per cent to 84 per cent in digital authentication for tenants is achievable when rent data is included in credit files.

John’s bill has cross-party support, as it should. I spoke in favour on Friday, as did Baroness Wilcox (Conservative) and Baroness Grender (Lib Dem). Kirsty Blackman MP (SNP) is on board, and support is growingacross the country. Our opposition frontbench has given explicit backing – but how did the government respond?

Treasury spokesman Lord Bates acknowledged that incorporating rental history is an idea whose time has come. “I share the bill’s objectives,” he said, “our concerns are ones only of means, not ends.” He leaves this to our old friend, “market forces”. Clearly, there’s some way to go in bringing the Treasury on side.

In his closing remarks, John made the point that “a true market-based solution would be a matter of [lenders] saying to tenants, ‘Prove how reliable you are by showing us the data you’ve collected by paying your rent’.” The government want no obligation on lenders to do this.

That’s where we’ll have to focus. But the next step is for you to show support. Share one of our infographics on Facebook or Twitter. Together, we can #makerentcount 

Glenys Thornton is a Labour and Co-op peer and shadow health minister.