Tories ponder ‘community-based debt management’

The proposals were put forward by the party’s social justice policy review group, headed by former leader Iain Duncan Smith.

Mr Duncan Smith’s review also called for more regulation for the banking sector to encourage more responsible lending and funding for financial education to foster better debt management.

While the proposals will not necessarily be adopted by the Tory leadership, lenders and people facing debt problems will be interested to see the party looking at this issue.

“Local community based debt management and advice should be strengthened and a fixed proportion of public support should be given to these organisations,” the report said.

“IVAs should be made available to a new category of debtors with smaller consumer debts,” it added.

Consumer debt in Britain has topped £1 trillion and with interest rates having increased three times this year more and more people are in need of debt advice.