Not just for the poor: Moral panic and the welfare state

The ‘welfare reform debate’ has taken the form of a classic moral panic. But amidst the myths and misinformation, we must not loose sight of the true purpose of the welfare state…

“Benefit claimants flooding system”, “welfare needs to be tackled”, “vile product of welfare UK.”  ‘Don’t panic, don’t panic.’  Sergeant Jones’ famous refrain would be an apt response to the increasingly strident news headlines over the past few weeks concerning the future of the welfare state.   Battle lines have been drawn between supporters of the Government’s huge programme of welfare reform (and cuts) and their opponents.

But as in all wars, truth is one of the first victims.  Sadly, very little of the ‘debate’ has featured the real live experiences – let alone the voices – of those who are directly affected by welfare reform and benefit cuts.

Instead, the ‘welfare reform debate’ has taken on the form of a classic moral panic:  An intense and emotive response to an issue that is alleged to threaten the social order.   Moral panics have been around for at least the past 180 years – though arguably much longer, if you include the medieval witch hunts, or even the practice of scapegoating referred to in Leviticus.

Over the years we’ve seen similar moral panic spread about single parents, the ‘rising tide of crime’ (even at points when crime rates were falling); asylum seekers; and immigrants in general.  In each case, a relatively voiceless and powerless group of people is singled out as the target for public disapproval, verging on hate.  For a nation which prides itself on our ‘British tolerance’ we’re a pretty intolerant lot at times.

The latest moral panic about ‘expensive, entrenched and inter-generational benefit dependency’ is, as with all previous moral panics, accompanied by increasingly value-laden and pejorative language when discussing benefits and welfare. In the past year, the term “benefit cheat” was used 442 times in national newspapers, whilst the work and pensions secretary, Iain Duncan Smith, has spoken of a mass culture of welfare dependency in every speech on benefits he has made in the past 12 months.

Whilst politicians claim to be ‘responding’ to the public mood, the signs are that (as in all moral panics), public opinion is strongly swayed by the overwhelming tide of negative media coverage.  A YouGov poll for the TUC last year, for example, found that, on average, people think 41% of the welfare budget supports the unemployed – the true amount is 3% – and believe the fraud rate is 27%, as against the government’s estimate of 0.7%.

So what’s the big problem with the welfare state?

If you read the newspapers (or listened to many politicians), you’d imagine that huge chunks of the welfare budget go on feckless’ families, two – or even three generations of over-large families where no one has worked.  Skivers and shirkers for whom benefits is somehow a ‘lifestyle choice.’

But as the Economist has argued: “Though most of them seem to end up in newspapers, in 2011 there were just 130 families in the country with 10 children claiming at least one out-of-work benefit. Only 8% of benefit claimants have three or more children. What evidence there is suggests that, on average, unemployed people have similar numbers of children to employed people … it is not clear at all that benefits are a significant incentive to have children.”

I’m delighted that this is an issue on which the Baptist, Methodist, URC and Church of Scotland have chosen to take the strongest of stances.  According to their report Truth and Lies,

“The systematic misrepresentation of the poorest in society is a matter of injustice which all Christians have a responsibility to challenge.”

I’ve recently been re-reading a report the churches produced more than twenty-five years ago at the height of a previous moral panic about the future of the welfare state.  Not Just for the Poor took a long and considered look at the achievements – and challenges – facing the welfare state, more than forty years on from its creation in 1945.

One of its most potent lines, was to challenge the notion of welfare dependency.

“It is easy to forget that those who have considerable independence still depend on others for their life and well-being. Likewise we can forget, in a divided society, that those who are highly dependent also have their own contribution to make to the welfare of the whole.”

Our inter-dependence on each other and on God is a profound theological insight – and one which has profound implications for our understanding of the welfare state.  The welfare state does not create dependency:  We are all inter-dependent;  we all depend to a greater or lesser extent on schools and hospitals, good roads and impartial policing; we all enjoy (or look forward) to receiving our state pension.

And as Not Just for the Poor argues, one of the most important reasons for the creation of the welfare state was ensure the universal availability of services to avoid the need to be dependent on the ‘charity’ of the rich and advantaged.

“That sort of degrading and sub-human dependence was one of the experiences which the development of the welfare state was meant to destroy.”

A quarter of a century on, the welfare state remains a big part of British family life, with over 20 million families receiving some kind of benefit. Two thirds are families, almost nine million are pensioners.  For almost ten million families, benefits make up more than half of their income.  Almost six out of ten pounds of the welfare budget goes on pensions, and another two go on disability benefits. Only fifty pence out of every ten pounds are spent directly on benefits for the unemployed.

And what is the purpose of the welfare state? 

In the pithy words of David Donnison, one time chair of the Supplementary Benefits commission:

“To keep people out of poverty, people must have an income which enables them to participate in the life of the community. They must be able, for example, to keep themselves reasonably fed, and well enough dressed to maintain their self-respect, and to attend interviews for jobs with confidence. Their homes must be reasonably warm; their children should not feel shamed by the quality of their clothing; the family must be able to visit relatives, and to give them something on their birthdays and at Christmas time; they must be able to read newspapers and their membership of trades unions and churches. And they must be able to live in a way which ensures, so far as possible, that public officials treat them with the courtesy due to every member of the community.”

In the face of the latest moral panic, we should hold fast to that simple statement of the purpose of the welfare state – as true in 2013 as when first established in 1945…

Making Sense of the Fragments: Urban Mission Congress, Manchester, 6-8 Sept, 2013

We lead increasingly fragmented lives in fragmented communities and fragmented cities. What part can faith play in bringing the fragments together and creating new sustainable, convivial and humane realities? If you are interested in these questions as someone who lives or works in an urban community, why not come to Manchester for an inspiring weekend of reflection, celebration and inspiration this September?

To find out more and book your place visit www.jitc2013.co.uk

Urban Mission Congress 2013

The UK Urban Mission Congress, held every 3 years in a different city around the United Kingdom.  The 2013 event, Making Sense of the Fragments will be primarily for people involved in urban ministry from Greater Manchester and across the UK, but is also open to anyone interested in learning about or supporting ministry and mission in inner-city and housing estate areas.

Speakers and guests confirmed so far include Dr Tony Campolo, Andy Flannagan, Stuart Murray-Williams, Les Isaac, Marike Hoek and John Haynes.  The programme will include:  ‘Question Time’ event with a panel including GM Police and Crime Commissioner Tony Lloyd, Chief Constable Peter Fahy, founder of Street Pastors Les Isaac and Niall Cooper of Church Action on Poverty.  Campolo and Curry.  World Café sessions.  Site visits and much more.

Why Making Sense of the Fragments?

Firstly, the urban context itself is fragmented, and possibly more so than ever, in both social and economic terms. Huge disparities in wealth, income, life experience and opportunity, with rich and poor within the city (and more generally) increasingly living in geographically separate communities and having totally different experiences of what it means to live in the city. Huge diversity in  social, ethnic and religious terms… If we are to do anything in an urban context we need to not just see this fragmented reality (which many of us are fantastically good at not seeing most of the time), but work harder to make sense of it, in terms of mapping the various realities, understanding the connections between the fragments and working out what being seekers of justice (or life in all its fullness) means in this context.

Secondly, we must take seriously the fragmentation of the churches in the urban context (not to say how the churches relate to other faith communities).  In many ways the fragmentation of the churches mirror that of the city itself, with ‘successful wealthy churches’ for the relatively well off and ‘poor struggling churches’ for others. And this is not even to get into the fragmentation born out of theological, institutional or denominational difference….

So how do we make sense of these fragments, not by claiming that ‘our’ response is the ‘right’ one, but by engaging in dialogue which affirms our diversity whilst at the same time creating space for us to come together… For the sake of the city and all who live in her.

To find out more and book your place visit www.jitc2013.co.uk

Thatcherism or Compassionate Conservatism: Where now for the Tory Party and the country?

Margaret Thatcher’s passing this week has given all of us over the age of 40 the opportunity for nostalgia (of one form or another) for the 1980s… But as Jonathan Freedland has aptly pointed out, the debate over how to remember Maggie is not about the past. It is a contest over Britain’s present and future.

The challenge is most acute for the Conservative Party, not least in the light of the recent controversy in relation to welfare reform:  Is it still committed to Compassionate Conservatism, or is it returning to its previous incarnation as the Nasty Party?

For many Conservatives, the purpose of Operation True Blue, is to not to so much to remember Mrs Thatcher, but to reclaim Thatcherism as the true heart not just of the Tory party, but of British political life per se.

The Nasty Party

But part of the legacy of two decades of Thatcherism was the Tory Party’s image as the Nasty Party:  A party which cared little for the poor and the vulnerable; a party which was willing to take a swipe at single parents, benefit scroungers, and other groups who were considered a ‘threat’ to society.  Mrs Thatcher may have been strong, decisive (and a whole host of other things), but even strongest defenders would struggle to describe her style of political leadership as compassionate (though Paul Goodman has a try here).

Compassionate Conservatism

Ten years ago, Compassionate Conservatism was launched by a bevy of senior Conservatives (chief amongst them David Cameron), as part of the wider project to detoxify the Conservatives of their Nasty Party image.   Some of its was quite blatant political re-positioning (remember ‘Hug a Hoodie), but beyond this there was a project of some substance.  At the heart of the project was the work of the Centre for Social Justice:  Iain Duncan Smith’s programme to re-engage with issues of poverty and social justice – and to come up with a positive agenda to tackle ‘Broken Britain.’

Iain Duncan Smith has admirably stuck to his guns in Government, forcing through the introduction of the Universal Credit – which though it has its faults – is fundamentally a welcome attempt to redesign and simplify the benefits system to genuinely ensure that work pays (and to that extent completes the task started by Gordon Brown in introducing Tax Credits fifteen years ago).

Truth and Lies about Poverty

But as the Free Churches have so powerfully demonstrated in their recent report Truth and Lies about Poverty – the wider welfare reform debate has effectively been re-toxified in recent months.  The language of strivers and skivers has much more in common with the Thatcherite approach of blaming the poor than anything to do with the project of Compassionate Conservatism.

So which way now for the modern Conservative Party? 

Is it still committed to the course of Compassionate Conservatism – trying to reach out to the poor and marginalised; trying to understand the world they inhabit and find solutions to their problems (whether or not we agree with their analysis or their prescription)?  Or has it become again the Nasty Party – willing to deliberately sow social division at the expense of those it is happy to demonise as an undeserving  underclass for the sake of party or electoral advantage?

This is the true choice facing not just the Conservative Party – but the country at large – as we contemplate the legacy of Mrs Thatcher this week.

 

God’s bankers: Through the eye of the needle…

“In this day and age, if someone earns £1m, I mean firstly you’re giving 80 to 85 per cent away in taxes – income tax, national insurance, VAT – then you provide for your family’s education, shelter, warmth; at the end of the day, there’s not much left for what you might call yourself.”

A fascinating, and slightly disturbing, article in today’s Independent, explores the question as to whether evangelical Christianity is taking a hold of the City of London’s financial institutions.

Whilst the relationship between faith and finance runs deep (Barclays was originally a Quaker-run bank), Alex Preston explores the role of more recent developments – Alpha, Christianity Explored and other similar initiatives – in attracting a new generation of City-types to faith.

His conclusions are troubling:  Whilst the vast majority of the City Christians he met were decent people using their faith to make sense of a dog-eat-dog world, it’s clear that Alpha and the majority of other evangelistic initiatives pointedly sacrifice asking hard questions about the relationship between faith and wealth which might stand in the way of members’ economic advancement.

So how do Christian bankers respond to the Gospel challenge to the wealthy? Seemingly with the same self-justifying rationalisations that Polly Toynbee found in researching her book, Unjust Rewards ‘It’s a fact of modern life that there is disparity and ‘is it fair or unfair?’ is not a valid question. It’s just the way it is and you have to get on with it.’

Hence the quote at the top of the page from Nick Fletcher, member at Holy Trinity Brompton and chief executive of financial advisers Saunderson House: A breathtaking attempt to claim its tough to make ends meet on £1 million a year.  (I’d certainly not go for financial advice to anyone who can claim that they are paying 80-85% in tax).

As the Catholic Bishops Conference concluded as far back as 1997: “There may come a point at which the scale of the gap between the very wealthy and those at the bottom of the range of income begins to undermine the common good. This is the point at which society starts to be run for the benefit of the rich not for all its members.”

And as one banker Preston quotes says: “The City isn’t immoral any more, it’s amoral.”

 

Sadly, the response still seems to be. Amen to that.

 

Benefit cuts: The day of reckoning draws near

April 2013 is D-day for literally millions of people who rely on welfare benefits or tax credits to help make ends meet.  Next month, a whole raft of cuts and changes to the benefits system start to come into force, and the impact will be felt by some of the poorest and most vulnerable families across the country.

Iain Duncan Smith, the Work and Pensions Secretary, has heralded the reforms as the biggest for six decades and claims that people will be lifted out of poverty as a result and that lower and middle income families will be better off as a result. But with £18 billion being cut from the benefits budget, the reality for many individuals and families is not so promising.

In a timely intervention, the new Archbishop of Canterbury, Justin Welby has led calls for the Government to abandon the worst of the cuts which will impact most severely on the poorest and most vulnerable.

Most of us find it hard to comprehend the scale of the Government’s welfare reform programme.  But make no mistake, for millions of families directly affected, the impacts will be real and lasting. Many in our own churches and communities will see their incomes go down over the coming months, in some cases by hundreds – or even thousands of pounds a year.  It is therefore incumbent on all of us to try to try and understand at least the basics:

Six and a half million households will lose out as a result of the Government’s decision to uprate most benefits by just one percent for each of the next three years.  With inflation running at over 2.5 percent, families will cut in the real value of their benefits of up to £215 a year by 2015.  More immediately, those reliant on income support or Jobseekers Allowance will receive a meagre 70 pence more a week from April to help them to cover the extra costs of food, fuel and other household essentials.

Over three million low income families will be affected by the abolition of the current system of Council Tax Benefit.  Although families in Scotland and Wales have been protected from the changes, from April each local council in England will be responsible for devising their own system of Council Tax support – but with ten percent less money.  As a result, from April, hundreds of thousands of families on low incomes will be required to pay the majority of poorer Council Tax payers of working age will for the first time have to pay between £96 and £300 a year in Council Tax.  Worst affected will be single parents who work part time and depend on childcare.

Up to 660,000 families and single people will lose an average of £14 a week as a result of the so called ‘bedroom tax’. If you rent from a Council or housing association, and your home is considered to be ‘too big’ for you, your Housing Benefit will be reduced by up to a quarter.  Two children of the same sex under 16 will be expected to share a bedroom, as will two children under 10, regardless of their sex. The bedroom tax takes no account of disabled people’s adapted homes, of foster parents who need rooms to take children in, or of parents sharing custody who will lose the room for their child at weekends. Although the Government hopes that this will ‘encourage’ people to move to smaller properties, many will struggle to do so – because there are simply not enough one and two bedroom houses available in large parts of the country.

Around 67,000 families will be affected by the ‘benefit cap’ of £500 per week, more than half in Greater London.  The majority are larger families, with 3 or more children, who face the unenviable choice of staying put and running up huge debts – or uprooting their families and moving to cheaper parts of the country – with the damage that may do, not least to childrens’ schooling.

April also sees a major change in disability benefits, with Disabled Living Allowance (DLA) being replaced by new ‘Personal Independence Payments’.  In time all current DLA claimants will be re-assessed, and as many are 400,000 people are expected to lose their entitlement to mobility payments, or to lose support altogether.

Last and by no means list, April also sees the start of the biggest change of all – the introduction of Universal Credit.  By 2017, upwards of six million working age people will see their existing benefits and Tax Credits replaced by a single Universal Credit payment.  Whilst some will see their incomes increase – significant numbers will also ultimately see their benefit levels go down.  In a cost saving exercise, most people will be expected to apply for Universal Credit on-line.  This may not be easy for people who do not have easy access to the internet – and the likelihood of people making mistakes in their applications, which may delay or even invalidate their claims, are also high. There are also very real concerns that the move from fortnightly to monthly payments will make it much harder for families to make ends meet.

Many of these numbers involved are truly mind boggling.  In Birmingham, 30,000 are estimated to be affected by the Housing Benefit changes alone; in Barnsley, 3,700 will lose benefits and £33 million will be lost from the local economy; in Plymouth one in five of the total population will be affected by welfare reform in one way or another.

For each and every individual or family affected, in cities, towns and villages across the country, the result will be to see their wallets and purses squeezed as never before. For many there is no further room for ‘belt tightening’ and it will increasingly be a stark choice – do I heat or eat?  Do I pay the bills or feed the children?

The numbers turning to churches and foodbanks or falling prey to the extortionate and irresponsible practices of payday lenders – are almost certainly going to escalate dramatically in the coming months.

You have been warned.

Regeneration with a human face

Do we need to redefine regeneration in a zero growth economy?  What would truly ‘people-centred’ regeneration actually mean in practice.

Julian Dobson, author of a refreshing new report for Respublica, drawing on significant aspects of Church Action on Poverty’s work over the past decade, argues that ‘regeneration is the action of citizens and those who work with them to recreate home for new times, especially where there is poverty or disadvantage.”

Responsible Recovery: A social contract for local growth  argues that a more joined-up approach to government policy on welfare, poverty and employment is needed in order to address the needs of the poorest communities.

For that to happen, policies need to be people-centred, locally accountable and locally responsive. The report takes the ‘sustainable livelihoods’ model that has been tried and tested internationally, and applied in the UK by Church Action on Poverty and Oxfam. It views the journey out of poverty as a shift from surviving to coping, from coping to adapting to change, and from adapting to accumulating.

As Dobson argues: “By using a sustainable livelihoods approach, it is possible to identify what really matters to people, work with them to meet these priorities, and draw in appropriate support from community, public and private organisations.”

Not only that, the report makes the case for adopting participatory budgeting and other approaches to local participation as ‘common practice rather than as isolated experiments, and endorses Church Action on Poverty’s Peoples Budget campaign target of ensuring 1% of local authority spending is allocated through participatory budgeting methods.

In his introduction to the report, Dobson affirms much of what Church Action on Poverty has been advocating in regeneration policy for the better part of  a decade:

“The starting point should be to understand and engage with the poeple who are most affected by poverty in the places where they live, working with them to create solutions that work in the context of their lives and strengthen the links and assets that are already important to them. This paper argues that we need to see people as the solution, not the problem.”

Read the full report here.

Truth and Lies about poverty

Excellent new report out today laying bare six myths about the poor which enable the majority to live with the comfortable assumption that both poverty and wealth are deserved, from the Baptist, Methodist and United Reformed Churches and the Church of Scotland.

Download the report here

The myths exposed in the report, reinforced by politicians and the media, are convenient because they allow the poor to be blamed for their poverty, and the rest of society to avoid taking any of the responsibility. Myths hide the complexity of the true nature of poverty in the UK. They enable dangerous policies to be imposed on whole sections of society without their full consequences being properly examined. This report aims to highlight some comfortable myths, show how they have come to prominence and test them against serious evidence.

Tell your MP

Let your MP know that you care. A copy of the report has already been sent to every MP in the country, but now they need to know that their constituents care about this issue. Please write or email your MP  – ask them to ensure that they read the report and listen to its recommendations.

 

Tackling poverty from the bottom up

Do we treat people in poverty as an undeserving underclass, hapless victims, or potential agents for change and transformation? As we are discovering in our work at Church Action on Poverty, ordinary people can do extraordinary things…

Contrary to the growing view that people on low-incomes are dysfunctional, dependent shirkers and skivers, Church Action on Poverty’s experience over the last 30 years has proved again and again that people in poverty not only understand the root causes of their problems, but are highly effective at creating lasting solutions to them.  Instead of imposing policies or top-down solutions, we use radical, participatory tools that help people in poverty access power and education, creating a network of grassroots social change that continues to grow.

Sarah: An inspiration for others

Sarah Whitehead: An inspiration to others. Photo: Helen Clifton

A 29 year old single parent living a life on benefits in Salford, Sarah Whitehead seemingly had little going for her.  Like many ordinary folk, she had some hopes and ideas for improving her neighbourhood, but little idea of how to about making things happen.  But she was encouraged to sign up with our Community Pride programme in 2010. Over the next few months, with a group of other ordinary folk from Salford, Sarah developed the skills and confidence to transform her rubbish-filled alley into a community garden, inspiring others to do the same; she also helped create the Weaste Area Forum, who have set up a jobs centre, community gym, and cafe.   Sarah is now, in turn, running a Community Pride training programme for ex-offenders in Salford.

She said: “Other people have come to me and said, ‘You’re an inspiration’. When you can see what you can do when you get involved, it makes people really want to do it. I want to be heard and have my say. Church Action on Poverty have helped me create changes with my voice. And that just proves to me that I can do it, and I should continue to.”

Kath: Champion of responsible lending.

Kath Carter: Living life to the full

As well as enabling local people to make changes within their communities, Church Action on Poverty’s approach has achieved success nationally. With support from Church Action on Poverty, women from Stockton-on-Tees have successfully negotiated a code for responsible lending with three major national high cost lending companies, benefiting more than 300,000 low-income customers.

Kath Carter is now a leading stalwart of Thrive in Stockton on Tees and a trustee of Church Action on Poverty. But things were not always so rosy for Kath. In her own words:

“I was the carer for my husband and son and still am, also looking after my grandchildren on weekends and school holidays. I had lost all connection with the outside world watching it go by through the barriers of a window and a TV screen. Thrive has allowed the dormant me to blossom again, even though the problems of life have not changed I feel valued and confident enough to enter full life again.”

Through Church Action on Poverty’s Powered by People UK programme, Kath has trained as a community leader. She has been trained to be powerful.

Last year, with others involved in Thrive, Kath uncovered huge dissatisfaction amongst customers with the actions of a high cost lending company, Buy As You View (BAYV) – high credit charges, poor customer service, lack of transparency in what customers owed and so on. Based in Cardiff, BAYV sells TVs and other household appliances to over 100,000 people, and something of a poor reputation for customer service.

Most local projects would respond by encouraging customers to get help from the local CAB and seek redress on an individual basis. Not so, Thrive. Having been trained in Community Organising, Kath’s response was to seek to challenge the way the company itself operated – at the very top – by seeking a meeting with the boss of the company, Graham Clarke.

With assistance from our project local worker, Kath and colleagues produced a spoof TV advert for BAYV highlighting the issue, which was watched by over 1,000 people on YouTube. When Mr Clarke refused Kath’s request for a meeting, several hundred Church Action on Poverty supporters in churches across the country emailed Mr Clarke, demanding that he meet with Thrive to respond to their concerns.  In response to polite pressure, the company agreed to a meeting.  When the meeting was called off at less than 24 hours notice, we emailed our supporters, asking them to phone Mr Clarke and ask why.  Church Action on Poverty’s chair, Lewis Rose, was one of those who responded – leaving a personal message on Mr Clarke’s answerphone.  Lewis was surprised on the following Saturday morning to receive a call from a Cardiff number he didn’t recognise – it was Mr Clarke ringing him up personally, to say that the emails and phone calls had got through:  He would now fly his senior management team from Cardiff to Stockton, to meet with Kath and six of his customers.

Having in Graham’s words ‘thrown rocks at him’ to get him to the meeting, far from finding confrontation, he accepted the concerns of some of his most long-standing customers, and acceded to all of Thrive’s demands. Not only that – he agreed to work with Thrive to bring together a roundtable of high cost lenders along with the Office of Fair Trading to find a way forward. This roundtable, chaired by the Bishop of Ripon, has spent the past few months developing an industry wide code for responsible lending, which when it is signed, will benefit up to 325,000 customers of high cost lending companies.

Maureen, is another of Thrive’s community leaders, who has been directly involved in negotiating with Buy As You View and other major high cost lenders over the past 18 months.  In her own words: “At the beginning I joined Thrive to get me out of four walls. I just carried on because it was something to do. Then we started talking about the bad boys of doorstep lending; loan sharks. Then I realised it was about companies that I was with. Buy As You View have actually lowered their interest rates. They’ve also started the ball rolling about sharing information on credit ratings. It does work. If I’d have realised that doing this sort of thing would have empowered me and others, then I would have done it a long time ago.”

The message is clear: People power does work. The power of ordinary people; trained, encouraged and supported to challenge the practices of powerful institutions in society; to reclaim power.

To find out more about the work of Church Action on Poverty visit www.church-poverty.org.uk

This is an edited version of an article that first appeared on the Guardian’s Northerner blog.

High Cost Lending: Part of the problem not part of the solution

Attending a conference on Tackling Britain’s high cost credit problem today, I felt like I’d been here many times before over the past 14 years – only the problems just keep getting worse.

In the fourteen years since we launched Debt on our Doorstep – the campaign for fair finance – the basic injustice that those on the lowest incomes pay the most to access credit hasn’t gone away.  In spite of countless Government reviews of the ‘high cost credit’ sector, the scale and urgency of the problem is greater than ever.

Whilst the cost of mainstream credit (for those who can access it) is at record low levels, for those reliant on ‘high cost’ lending, the costs are greater than ever.  As Damon Gibbons reveals in a joint Church Action on Poverty and Centre for Responsible Credit report launched to coincide with the conference, the cost of borrowing from the likes of Provident Financial – Britain’s biggest doorstep lending – have actually increased in the past five years.   Meanwhile, there has been an explosion in payday lending, frequently at rates in excess of 1,200% apr.

The high cost credit crisis is now no longer restricted to those on the lowest incomes.  Peter Tutton revealed that the debt charity Step Change has seen a mushrooming of consumer debt problems over the past twelve months from those in the ‘squeezed middle’:  Households, who despite being mostly in work have seen their incomes go down on average by 7 percent over the past three years.  Their debts, frequently to multiple Payday lenders (£1,600 a month) now exceed their average monthly income (£1,400 a month).  Four out of ten are below the official poverty line – but this figure rises to eight out of ten once their debts are taken into account.

With the full impact of cuts to Housing Benefit and other benefits due to come into effect in the next two months, the pressure on household finances to turn to high cost lenders simply to pay the rent and other household bills will become even greater.

Declining incomes, declining benefits, rising prices and high cost credit are all part of a toxic mix which, in part, explains the explosion in foodbanks over the past twelve months.

And yet, just at this moment of crisis in household debt, the Government is withdrawing from its own role of lender of last resort – abolishing much of the Social Fund, and looking to local authorities to step into the breach with a mishmash of local schemes – many of which are yet to be fully developed, in spite of the fact they are due to come into operation in less than five weeks time.

Amidst all the doom and gloom at the conference, there were just a few glimmers of hope:

Some high cost lenders are now accepting the case we have been making for more responsible lending practices – with Brighthouse and Buy as You View now working to reduce the cost of borrowing for their ‘better’ payers.  And Credit Union membership in the UK has now, for the first time, topped the one million mark, with £800 million in savings and £600 million out on loan.  With support from the Department for Work and Pensions, many Credit Unions are now making great strides towards offering a competitive range of products and services – but the coverage remains extremely patchy.

And some see positive signs that the new Financial Capability Authority (which is due to replace the Financial Services Authority later this year) will take a more robust line in terms of regulating high cost lending – and not least in terms of using its new power to cap the cost of Payday lending.

But in general terms, there was little cause for optimism amongst those assembled at the conference today.  And far fewer grounds for optimism, I suspect, in the streets and neighbourhoods where it really matters.

Is it possible to reduce the ‘excess cost’ of finance, food, fuel and a whole host of other essential household goods and services, and thereby ease pressures on family budgets?  Is it possible, in short, to make markets work for the poorest?

For families already struggling to make ends meet, borrowing money at high (not to say extortionate) cost, serves only to make matters worse.  That was true back in 1999, and it is all the more so today.

IF only: Does hunger only matter overseas?

• A quarter of a million people reliant on emergency food aid.
• One in five mothers go without food on a regular basis so that their children can eat.

Do these figures relate to Ethiopia, Sudan, the Congo – or the UK?  Hunger is no longer a reality only for families in drought stricken, war torn or ‘underdeveloped’ countries in sub-Saharan Africa.   Hunger is an increasing reality for families in what is still the sixth richest nation on the planet.

And just as in sub-saharan Africa, this is not due to a shortage of food.  The supermarket shelves are still stacked high with produce from every corner of the globe, driven across the country in refrigerated lorries; transported across the globe in vast container ships or airfreighted from fields afar…

… But out of the reach of increasing numbers of families who simply don’t have the financial wherewithal to food their kids on a regular basis.  With incomes stagnant (or in many cases falling), and the prices of food, fuel and other essential goods and services rising faster than ever, the equation for all too many families is far too simple:  Pay the bills or visit the supermarket? Heat or eat? Feed myself or feed the kids?

The Trussell Trust – the largest network of foodbanks in the UK has provided emergency food assistance to a staggering 260,000 families to date this year.  Double the number of families they supported last year – and four times as many as two years ago.  Over 300 local foodbanks are affiliated to the Trussell Trust, and it is opening a further 3 every week.  Their long-term aim is to open a foodbank in each and every community across the UK.

As Chris Mould, Executive Chair of the Trussell Trust said: “We see the reality of food poverty day in and day out in food banks across the country.  We see it and we’re often shocked by the depth of difficulty people face.  Behind the statistics are hungry mouths.”

“The problem is not confined to just a few pockets of inner city Britain – this is widespread.  It’s a consequence of low income and the high rise in the cost of providing for basic needs.  Therefore it needs political attention, from all parties.”

And the UK’s food crisis is now starting to attract international attention.  As the UN Special Rapporteur on the Right to Food, Olivier de Schutter reminded us at a meeting in London tonight, it is the duty of the UK Government to protect the basic human right to an adequate diet.  The bulk of Mr de Schutter’s work is focused on investigating the causes of food crises in developing countries, he is increasingly being called on to investigate food crises in the world’s richest countries, where ‘the failure of social policies’ since the recession is leaving increasing numbers of families to go hungry.

The European Union too is now in discussion about the potential for extending its Food Aid Programme to all 27 Member States – including the UK – with 2.5 billion Euros having been provisionally allocated to a new seven year Programme in the recent EU budget round.   At present the UK and a number of other states are resisting the plans – presumably another one of the EU’s ‘wasteful’ social programmes??

Last month over 100 international NGOs launched the IF campaign – to end global hunger.  I can’t help feeling that it is something of an irony that the IF campaign currently doesn’t include seeking to end hunger close to home.

Is it more palatable to tackle hunger in sub-saharan Africa, than it is to face up to the reality of hunger in our own backyard?