Chris Leslie has new job…as debt collector chasing Covid loans

As Shadow Chancellor of the Exchequer and trustee of two debt advice charities, Chris Leslie spent years trying to protect vulnerable borrowers from the tactics that lenders use to claw back loans. 

How the tables have turned. 

The Mail on Sunday can reveal that the former Labour MP has been advising bankers on how to recoup emergency Covid loans in his new role – as boss of the trade body for Britain’s army of debt collectors. 

Swapping sides: Former Labour MP Chris Leslie with Gordon Brown and Tony Blair in 2005

Speaking at a round table event led by the Chartered Banker Institute, Leslie said ‘bounce back’ loans of up to £50,000 should be repaid and not written-off at the expense of taxpayers. 

The round table event was called ‘How can banks recover bounce back loans?’ These were launched last year with 100 per cent taxpayer-backing to give small businesses a crucial lifeline through the pandemic. About £46.5billion has been handed out and there are fears that vast sums may never be repaid. 

Leslie, who was briefly Labour’s Shadow Chancellor in 2015 and was also a trustee of two debt charities (now called StepChange and Money Charity) in the financial crisis, said: ‘We’re talking 1.5million businesses here. If they get that sense there’s a write-off in prospect, then payments will simply cease. 

‘The scheme in the UK has already baked in a certain approach to forbearance. It started with the option of a six-year repayment period that has been extended to a potential ten-year period.

‘There are already options within there about interest and payment holidays for six months and so forth if repayments can’t be made in a particular way. To what extent can the banking community have that hard incentive or moral imperative to collect on behalf of the taxpayer?’ 

He added: ‘It is a really hot potato. It’s going to take a lot of sensitive moving around. 

‘The public sector, to be frank, doesn’t always have the best reputation when dealing with debt management on a sensitive basis.’ 

His comments have emerged as the first wave of interest payments on emergency Covid loans kick in this week. 

The Mail on Sunday revealed a fortnight ago that the biggest high street lenders had started sending letters to thousands of customers warning that interest charges would be due imminently. 

are spending millions on debt recovery amid fears that they will be forced to use heavy-handed tactics to avoid turning to the taxpayer to recoup losses. 

Leslie, who became chief executive of the Credit Services Association in August last year, is defending the debt collection industry nearly a decade after he criticised lenders for ripping off customers. 

In 2012 Leslie said that the Financial Conduct Authority needed to ‘tackle high-charging payday lenders who are exploiting some of the poorest’. 

As MP for Nottingham East, he also said, referring to another MP: ‘Certainly, the number of people in my honourable friend’s constituency who are suffering from indebtedness is exceptionally high. In my constituency, over 40 per cent of people are struggling to make ends meet when faced with these crippling burdens and debts.’ 

Consumer experts last night called on Leslie to use his experience in charity and Westminster to help ensure that Covid debts are collected in a fair way. 

James Daley, founder of the campaign group Fairer Finance, said: ‘Leslie has always been respected as a hard-working politician who championed a good consumer outcome. Although it looks odd that he’s moved from sitting on debt charity boards to running a trade body for debt collectors, I’d like to think he’ll ensure members are professional and treat customers with the right level of sensitivity.’ 

But the memory of aggressive post-financial crash collection tactics still haunts many small businesses as Britain’s debt pile mounts. 

Figures from the Office for National Statistics released on Friday showed that the Government borrowed £303billion in the year to the end of March, up from £57.1 billion the previous year – a record amount and, as a proportion of gross domestic product, more than at any time since the Second World War.

Earlier this month, Leslie and other City leaders attended a virtual summit to discuss ‘unwinding’ the Government’s emergency schemes and how it would ‘inevitably have very significant implications for UK lenders’. 

Leslie said at the presentation that taxpayers would be concerned about recouping the money because the alternative could be a hike in taxes to foot the bill. He said that he hoped the Treasury did not imply these loans can be ‘written off’ and recommended that banks ‘engage’ with customers. 

‘It will take a particular set of skills to do that and a lot of the core banks don’t necessarily have that in-house, a lot of that is outsourced to collections,’ he said. 

‘The capacity in the banking sector and the wider non-banking financial services sector is really going to get put to the test here.’ 

Leslie did not comment on his job change. On Bounce Back loans, he said: ‘When such vast sums of taxpayer money have been lent to business in the expectation it will eventually be repaid, Ministers have a responsibility to pursue an effective – as well as a sensitive – approach to recovering that debt.’