Response to interpellation 2024/25:28 on evictions of children
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
1 2 3 M argues that the government is taking historical measures against over-indebtedness by requiring banking licenses, halving the maximum interest rate, and removing interest deductions for unsecured loans 1 2 3. 3 4 M believes that it should pay to work, that the benefit system should not be based on people being paid not to work 3 and that tax cuts on work are fair 4. 4 M argues that the government has prioritized bringing down inflation, which has benefited those with the smallest margins, and that families with children received clear economic supplements during the crisis 4. 5 S believes that the government is prioritizing incorrectly by lowering taxes for high-income earners 5. 5 S proposes increased child and study grants as well as a permanent strengthening of the housing allowance 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Statsrådet Niklas Wykman (M)
Madam Speaker! Ida Ekeroth Clausson has asked the Minister for Finance what she and the government are doing so that private individuals' debts do not increase further at the Swedish Enforcement Authority and if the Minister intends to take any other measures within her area of responsibility to reduce the number of evictions affecting children.
The interpellation has been handed over to me. As Minister for Finance, I am responsible for consumer protection in the financial market and the functioning of the credit market.
Household debts have increased for a long time. Irresponsible lending can worsen an individual's economic situation, with over-indebtedness as a result. The problems with over-indebtedness are partly rooted in the fact that credits are granted with a lack of care for the borrowers by certain financial companies. A proposal that consumer credit institutions shall no longer be allowed to conduct business is currently being prepared in the Government Offices against this background.
In addition, a number of measures have been taken in this area. The Government has recently submitted a bill to the Riksdag with proposals aimed at countering risky lending and over-indebtedness. The bill proposes, among other things, stricter rules on interest and cost caps and the possibility of extending the term for a credit.
One of the explanations for why over-indebtedness is growing is that unsecured consumption loans are increasing. For example, unsecured loans have almost doubled in size over the last ten years. Furthermore, interest expenses have been deductible, which has made it cheaper to take out such loans. It is not reasonable for taxpayers to subsidize risky credits. The Government has therefore indicated in the budget bill for 2025 that the right to deductions for interest expenses on unsecured loans should be abolished.
The Swedish Enforcement Authority has also been tasked with taking preventive measures to reduce the risk of over-indebtedness and to increase the opportunities for persons who have been denied their application for debt restructuring to rectify their financial situation.
Furthermore, Statskontoret has been tasked with analyzing and evaluating the municipal budget and debt counseling, and Konsumentverket has been tasked with strengthening and developing the support for municipal consumer guidance.
In conclusion, the government intends to investigate further measures in the future to counter over-indebtedness.
Ida Ekeroth Clausson (S)
Madam Speaker! Thank you, Minister, for the answer!
It is positive that the government finally chooses to proceed with proposals aimed at countering risky lending and over-indebtedness. It is not a day too soon.
During the last two years, I have on several occasions submitted interpellations to the Minister for Finance regarding how she and the government are working to prevent over-indebtedness. The answers have sounded well-intentioned but lacked concrete information on what she and the government intend to do.
Time passes, and new newspaper headlines still appear about increased debts while the number of evictions has increased by 26 percent in just two years. Every child affected by an eviction is in a very vulnerable position. In addition to the personal suffering, it also has major economic consequences for society every time someone is evicted.
Madam Speaker! When the cost-of-living crisis hits families with children, a generation is being created that grows up under more constrained economic conditions than they would have needed to. Society has a responsibility to ensure that children do not pay for the crisis. When more families with children turn to charities or say they cannot afford to put nutritious food on the table, the situation is serious.
We have the self-image in Sweden that everyone grows up with the same prerequisites, but that is not the case. Children who grow up in poverty risk having poorer opportunities to realize their rights and have good chances in life. Children living in economic vulnerability also do not have the same opportunities for a meaningful leisure time as children from a family with a more stable economy. The children are limited, for example, by the cost of bus tickets, high fees for leisure activities, and an uncertain housing situation which can contribute to it becoming difficult to participate regularly in activities.
Madam Speaker! According to Article 4 of the Convention on the Rights of the Child, the States Parties shall take all appropriate legislative measures to give effect to the rights provided for in the Convention. In order to ensure, in accordance with Article 27, a child's right to a standard of living adequate for the development of the child, physical, mental, spiritual, moral and social development, the State has a responsibility to assist parents, especially when it comes to housing.
Children need a stable home to be given the opportunity for a secure upbringing. Therefore, it is extra serious that evictions of children have increased in Sweden. I note that the Minister, in his answer, does not mention any proposals to prevent evictions of families with children. Therefore, I ask: Does the Minister consider that Sweden lives up to the Convention on the Rights of the Child when 674 children have been affected by evictions during the last ten months?
Statsrådet Niklas Wykman (M)
Madam Speaker! A significant part of this problem concerns people who get stuck in over-indebtedness and become indebted. The interpellator also points this out. Then one should decide to do something about this.
I can only agree with Ida Ekeroth Clausson that one can be surprised that so little was done for such a long time. Many describe it as a betrayal. Naturally, a heavy responsibility for this rests on many people who were in positions of power for a long time but who did far too little.
Now we are rolling out the largest measures against over-indebtedness that I believe we have seen in Swedish history. They are described as very drastic by some, but that is because the problem is serious.
Madam Speaker! I can only regret that more has not been done earlier, but now we are putting a stop to much of the predatory behavior that exists in the credit market.
We propose that a proper banking license should be required to carry out the type of lending that causes many to get trapped in debt traps. It has the potential to make a very big difference.
We are reducing the attractiveness of giving and taking that type of loan where there is no collateral by removing the tax subsidy for borrowing without collateral. The loans will no longer be able to be marketed with the claim that one receives some kind of tax discount by indebting oneself in such a way that one does not have the possibility to pay it back.
Furthermore, we are going very hard on unhealthy lending. With our proposal, the permitted maximum interest rate is lowered from 40 percent plus reference rate to 20 percent plus reference rate. This not only makes it cheaper to take out this type of credit since one can no longer be burdened with the same high interest, but above all, it is a hard blow to those whose business idea is to lend money to people who perhaps actually cannot pay it back. It is only if there is a very large risk in the lending itself that such incredibly high interest rates are needed.
Now we take a historical push in three parts, where each part then consists of different proposals.
One part is that a banking license will be required to engage in this type of lending. It cleans up this market, where previously one has let rats run around in the machinery that only cause destruction.
We also remove the right to deduction so as not to encourage anyone to either give or take such loans.
Furthermore, we are hitting very hard at the very poor conditions that exist in this market, for example by halving the maximum interest rate that can be charged but also by ensuring that extensions of loans that make it more expensive for the consumer may not be made more than once. It becomes different types of caps that ensure that different types of fees cannot be imposed on people in a vulnerable position.
Madam Speaker! I hope that Ida Ekeroth Clausson and the Social Democrats will join in these measures. Then we are in complete agreement that it should have been done earlier – much earlier – but I think that Ida Ekeroth Clausson here should see and acknowledge that a historic turnaround is now being made, Madam Speaker. In a market where there has been predatory exploitation of people and where far too little has been done from politics for a long time, we are now stepping in with a crackdown that has not been seen before in Swedish politics.
Previously, systems such as hawala and others have been protected and shielded, but now there will be order and clarity. Now we are finally backing up the most vulnerable and weak consumers and households, so that the situation that Ida Ekeroth Clausson describes – and has partly caused – will not continue to prevail.
Ida Ekeroth Clausson (S)
Madam Speaker! I began my first speech by saying that I think it is positive that the government is now finally moving forward with proposals that come from the investigation that the Social Democrats appointed and whose proposals have been lying for two years.
It is however the case that we find ourselves in a situation where more and more families with children are being evicted, where a record number of families are with the Enforcement Authority, and where ordinary families with children are struggling to make ends meet. To then choose to lower the tax by 3,000-4,000 kronor a month for those who have the highest incomes is a completely unreasonable prioritization, but it is unfortunately not surprising.
The SD government's first two years in power have been costly for Swedish workers. Wage increases have not kept pace with inflation, and the cost crisis has hit very hard. Ordinary families with ordinary incomes are finding it difficult to make the money stretch, and the families who had it toughest already before the crisis have, of course, been hit extra hard.
Children should not have to pay for the cost crisis. Therefore, the Social Democrats propose that child and study grants be increased by 200 kronor per month next year. This would give a family with two children almost 5,000 kronor more per year to pay for nutritious food, leisure activities, and other completely necessary expenses.
For many families with children, the housing cost is the largest expense. The reinforcement of the housing allowance was introduced to support those families with children who have it toughest financially. Despite the fact that the families continue to struggle with very high costs, the government chooses to completely withdraw the support starting from July 2025, and until then reduce the payments by 775 kronor per month. I wonder: Does the minister think it is reasonable to withdraw the support, even though the cost crisis still hits the most vulnerable hard, while taxes are being lowered by enormous sums for the richest? To me, it is an equally incomprehensible and unreasonable prioritization.
We Social Democrats stand on the side of families with children and therefore propose a permanent reinforcement of the housing allowance at the original level. It would give a family with maximum housing supplement 2,100 kronor per month until July and onwards. Sweden will not be strengthened by those who already have the most getting even better, at the expense of ordinary people. Therefore, we reject the government's proposal to abolish the tapering of the job tax credit. The government has chosen to leave ordinary people in the lurch when it burns billions on tax cuts for the very richest.
We Social Democrats believe that taxes should be paid according to ability and welfare distributed according to need. We believe that progressivity must be protected. Those who have higher incomes should contribute more than those who have lower incomes, but everyone should be able to share in the common welfare. That is how the Swedish welfare model looks.
Statsrådet Niklas Wykman (M)
Madam Speaker! I noted a drift from the subject itself to more flyer-like statements regarding politics in general. Let me therefore be clear about how the government prioritized when the crisis that we had to take over was at its worst.
It was about fighting inflation and removing the price increases we had in the economy that ate up pensions, ate up wages and made it harder to invest in Sweden. We were restrained, but by doing so, inflation was also broken. We are in a much better position now than we were then. The challenges are, however, significant for many who have faced the price increases, and therefore we are now providing households with resources. We are lowering the tax on pensions and on earned income so that the purchasing power of Swedish households can be restored.
Madam Speaker! There is a difference of opinion, which is deep, between the government and the Social Democrats. This was illustrated very clearly by the interpellator, who mentioned a number of different benefits that the interpellator wants to be increased. My and the government's general starting point is that it should pay to work. It is by doing one's duty and claiming one's rights that the country functions, not through a large benefit machinery where people are paid not to work.
However, the support systems must be robust, strong, and be there when they are needed. During the crisis, we have therefore supported those who have needed the state the most. It has been about the families with children who have the toughest economic conditions. But whether we can long-term and sustainably build a strong society on higher benefits is for the Social Democrats to decide. That is not a policy I stand behind. It must pay to work.
When it comes to the issue at hand, Ida Ekeroth Clausson, despite many interpellations, does not seem to have followed the issue regarding the debt question particularly well. What we are doing now, that is, initiating historical measures against over-indebtedness and introducing requirements for bank licenses, did not come from a Social Democratic-appointed inquiry. What we are doing now, that is, reducing the incentive to take out these loans by removing interest deductions where there is no collateral, did not come from a Social Democratic-appointed inquiry.
The Social Democrats preserved systems such as hawala, for example, but this government is doing this. It is a paradigm shift against over-indebtedness and exploitation of people who are in a vulnerable situation.
The interpellator has potentially, or at least through their party, been involved in creating some of the problems. I read: "S sells lottery tickets on credit to those in debt and drives thousands to the Enforcement Authority" and "S-lottery drove 80-year-old Gun to the Enforcement Authority." SVT wrote in 2017: "The Social Democrats sell lottery tickets on credit to those already in debt." And so it continues; DN summarizes it as 8,000 people having been sent to the Enforcement Authority by the Social Democrats - for gambling debts. Were there any vulnerable families with children here?
Is Ida Ekeroth Clausson today prepared to extend a hand to these households and say that one wants to pay back or at least apologize? Now the Social Democrats have the chance, area by area, to become part of the solution to Sweden's problems instead of being part of the problem.
Ida Ekeroth Clausson (S)
Madam Speaker! It should pay to work, but it must actually pay for the entire population - not just for those with the very highest salaries.
Since the SD government took office, unemployment has risen to the highest level in ten years, apart from the pandemic years. New gloomy figures arrived as recently as today. Housing construction has crashed. Large companies plan to lay off thousands of employees, which we could hear in the previous interpellation. The number of bankruptcies has increased sharply in Sweden, and the number of notices within health and social care is the highest in over a decade.
Much is going in the wrong direction, and it is those with the smallest margins who are hit hardest. Therefore, it is important that indebtedness is countered at several levels in society.
The proposals that the government has finally come forward with are good to some extent. Better support and interventions from Kronofogden are needed through expanded debt counseling and improved opportunities for risk assessment when it comes to granting loans. A concrete proposal that they choose not to proceed with, however, concerns a debt and credit registry, which the authority itself says would be good. We Social Democrats believe that this would have been a powerful tool to ensure that those who are granted loans also have the ability to pay them back.
Measures are needed, and it is actually not acceptable that Sweden has the highest child poverty in the Nordic region. The Red Cross has had to quadruple its food distributions to help families who cannot afford food. The government has failed these families. Instead of providing support, the government is lowering taxes for the very richest. It is a deeply unjust and misprioritized policy.
Statsrådet Niklas Wykman (M)
Madam Speaker! We took over Sweden in a situation with very high inflation. It has been a priority to bring down the inflation. Therefore, we have said no to those who have talked about more, faster and cheaper – otherwise, we would not have managed to break the inflation. We took that fight and won it. Now we have regained price stability in the economy. It is most worth it for those people who have the least margins in their economy.
Despite the fact that we needed to be restrained in order to push back the crisis, we made the clearest priorities regarding those people who needed it most. The families with children, who have the smallest economic margins, received large and clear supplements to their finances so that we would collectively get through the crisis.
When we are now to build Sweden for the future, the government rejects the subsidy increases that the Social Democrats propose. It is true, Madam Speaker, that the government's view is that we do not build Sweden better through subsidies. Instead, we do so through work and effort.
I am not ashamed for one day that we are lowering the tax on work. Many wage earners have had to stand back. LO and other workers' organizations have taken a great responsibility during the crisis, which has contributed to us having brought down inflation. This group deserves to keep more of their wages.
I am pleased that the interpellator praises the measures we are now taking against over-indebtedness. They are historic. Some of them have roots in what the Social Democrats began. Other powerful measures have been initiated by this government from the start. It is very good that we take measures for those people who are in the toughest situation in earnest.
It is, however, distressing, Madam Speaker, that we have a discussion about over-indebtedness and that newspaper headline after newspaper headline tells how the Social Democrats have sent people to the Enforcement Authority through their lottery. The interpellor cannot apologize or say a comforting word to the people who have been affected.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.