To read my Big Issue in the North piece about the impact of austerity on Stoke, click here.
I’ve neglected my blog – for which I can only apologise.
For the past couple of weeks I’ve been working on the ‘Drowning in Debt’ report for Church Action on Poverty (CAP).
The report brings together years of research from the charity’s work with sister organisation Thrive, based in Middlesbrough, and the Centre for Responsible Credit in London.
The work focuses on the little known buy-as-you-rent sector, whose shops sell white goods and appliances with interest rates of almost 70 per cent. Bright House, the market leader, is by far the worst culprit – but PerfectHome and Buy As You View also sell goods with huge mark-ups on normal retail prices.
They are, however, increasingly dominating some of poorest high streets in the UK. Almost 80 per cent of BrightHouse’s 271 shops are in the top 30 per cent most deprived areas of the UK. 80 per cent of PerfectHomes’s 64 shops are in the 20 per cent most deprived areas of the UK.
People buy into them because the weekly repayments are so low – a washing machine from BrightHouse costs just £6 a week for 156 weeks. But at a final cost of £936, this hardly represents a bargain.
Many on the outside would like to see the whole sector disappear.
Yet as pernicious and predatory (a brilliant description from Niall Cooper of CAP there) as we all agree the sector is, it’s very hard for people who are on benefits, a low-income salary, or who have a poor credit rating to get access to the bank loans and credit cards many of us take for granted.
Like it or not, credit is necessary. So what the report outlines is what the sector needs to do to change – offer lower interest rates, better rates for better payers, transparent costings, free debt advice, no default charges, and share credit data – so that their customers can eventually get themselves out of debt and wean themselves back on to normal credit.
The Observer covered the report well here, using much of my research in an infographic.
Drowning in Debt was followed this week by the launch of the Charter to Stop the Pay Day Loan Rip Off, which demands that pay day loans (you know, the ones who charge up to 7,000% representative APR for their loans…..) immediately reform. The Charter has been widely covered, in the Independent, Financial Times,(£) Sheffield Star, Guardian, Ekklesia, etc.
It’s great to see Church Action on Poverty getting well-deserved coverage. They really do work at a grassroots level, and have the credibility of conviction and experience behind them.
Their dogged determination has put the scandal of modern-day poverty, foodbanks, and debt at the top of the political agenda. The Government are finding these issues increasingly difficult to ignore.