Glenys Thornton: Give renters equal access to affordable credit

As the Young Foundation report ‘Credit where credit’s due?’ highlighted in 2016, it’s tough being poor in this country. With benefit cuts, falling incomes and higher rents, over three million children with working parents are living below the breadline this year.

But if you’re renting, there’s an additional injustice: unequal access to affordable credit. Unlike mortgage payers – whose data is worth something in the consumer credit world – tenants who can least afford it are paying through the nose for their energy, white goods and food. We must do more to address this economic injustice, and it’s why I’m proud to be supporting John Bird’s Creditworthiness Assessment Bill in the Lords – which recently passed its committee stage.

John’s bill will mean that rent and council tax payment data would be included when someone applies for credit, whether it’s for a microwave or a mortgage. The result will be more equal access to affordable credit for Britain’s 11 million renters. As our housing spokesperson Roy Kennedy said: “It’s important that people who meet their financial obligations week in, week out, have that taken into account when they seek credit. It is always the poor who pay more, and that’s totally unfair.”

It’s clear that much more needs to be done to bring fairness into consumer finance. This is exactly what Labour has committed to doing, and – just last month – John McDonnell announced plans to cap the total amount that can be paid in overdraft fees or interest payments. The support offered by the Labour Party to John private member’s bill builds upon this commitment, as both a central to the mission of ending the low-paid debt trap.

Research and experience tells me that John’s bill could make a real difference. A version of this scheme has already been tested by Big Issue Invest. Records show that 83 per cent of social tenants stand to see their credit scores boosted because of their rent payment data, and that there’s a jump from 39 per cent to 84 per cent in digital identity authentication when rent data is included in credit files.

With Labour and cross-party support in the Lords, John’s bill is progressing to the Commons, providing us with a critical opportunity to end Britain’s high-cost credit rip-off. If you can spread the word about The Big Issue campaign online, do so. And together, we can work towards levelling the playing field for Generation Rent – and #makerentcount.

Baroness Glenys Thornton is Shadow Health Minister in the House of Lords.

You can read my committee stage speeches here and watch them here.