By Mark Langabeer, Hastings and Rye Labour member
Hundreds of thousands of households are gradually slipping into serious debt, as inflation in the cost of rent, energy, food and other essentials eat away at incomes. Some of the effects of the impoverishment of the population were feature in a recent Channel 4 Dispatches programme, Broke: Britain’s Debt Emergency.
The programme interviewed a number of advisors from the Citizens Advice Bureau as well as three of their clients. The programme makers noted that an astonishing one in four people have applied for loans to cover energy bills in the last six months. The CAB predict that among the total population, as many as one in five will be living in poverty by the end of 2022.
The introduction of a cap on energy prices, to an average of £2,500 annually – still far in excess of energy costs a year ago – still means that 60% of the population will live in fuel poverty, meaning that energy bills will be over10% of their income. The CAB estimate that in most regions nearly half of all debt-related clients owed Council Tax and it is estimated that a million people are in debt to loan sharks, operating illegally.
The programme interviewed one single mum with debts of £20,000. She was a manager at a local supermarket but was forced to reduce her hours because of a family bereavement. Before seeking advice from the CAB, she took out a loan for £500 to cover everyday expenses and repayment costs soared to £1,800 an effective interest rate of 180%. She has entered an agreement to consolidate her debts, but as the CAB advisor said, that this process can itself involve substantial fees.
Bailiffs knocking at the door
The programme interviewed a man who had to care for his young son. He relied on Universal Credit income of £600 each month and was unable to pay all his bills, so he ended up with bailiffs knocking on his door. He was worried that they would take his young (primary school age) boy’s possessions. Understandably, he felt that this was unfair because the boy couldn’t be held responsible for their current predicament.
Finally, a single woman was interviewed: she was studying for a degree during the day and working in a local supermarket in the evenings. She had to pay £70 a week from her earnings following a County Court judgement that placed an attachment on her earnings. She too had fallen behind on her rent and was facing eviction.
The Citizens Advice spokesperson who was responsible for clients with debt problems, pointed out that the level of debt today was greater than any time in her eleven years’ experience at CAB. She noted that her organisation could only act as a ‘sticking plaster’ for clients. Incredibly, the Citizens Advice said that it took 39 years to repay the average debt in 2019! But by 2022, it has increased to a jaw-dropping 190 years!
In is inevitable that the doubling of energy bills and double-digit inflation will drive more people into debt. The founders of the labour movement understood that a society based upon the market and private ownership would provide huge wealth for a tiny number in society, while driving ever more people into poverty.
The Labour leadership have to go with public opinion and include the public ownership of the giant energy companies and big financial institutions as part of its programme at the next general election. Labour committed to a socialist programme could end the nightmare of a lifetime of debt for so many in Britain’s ‘green and pleasant land’.
You might have to register to watch the programme, but it is available to see on the Channel 4 website, here.
