by Stella Creasy
Today’s evidence from R3, the insolvency practitioners, that the rapid and rabid growth of Britain’s payday loan industry is leading people to go hungry in order to repay these debts, is saddening but not surprising to me. For two years now along with many others I’ve been trying to warn the government that they needed to protect British consumers from these legal loan sharks- and for two years they have found excuses not to do so. Now as debt engulfs the household budgets of so many, we see the consequences of their choice to do nothing.
As the government tries to claim Britain is now on the up, we ignore how people are coping with the financial hardship of the recession at our peril. ONS data shows families are being squeezed much more this time than in previous eras, as they experience both falling household incomes and rising inflation. Predictions are wages will stay flat for years to come, offering little respite to which to look forward.
Dismissing the consequences of this as some in the government have done by telling people they should ”live within their means” misses the point. Too many in Britain, both in and out of work, cannot make their incomes meet the basic costs of everyday living. Research by Which? published last week found a third of payday loan users had taken out credit they knew they couldn’t afford to repay in order to pay for essentials such as food and fuel. In the week when British Gas bills will rise again, consumers are looking at the gaps in their budgets and rightly asking when will this all end. With massive cuts in benefits around the corner only adding to the misery they face, it is a question Westminster must answer.
