TENDRING TOPICS………..ON LINE
A Nation of Debtors!
It was only a few weeks ago that I commented in this blog on the dangerous lure of ‘Pay Day Loans’; the offer – by a bank or other financial institution – to lend a relatively small sum of money ‘just till payday’ to deal with some sudden crisis (a burst pipe, a forgotten family birthday, an unexpected visitor) that may have arisen just at a time when you have nothing in reserve and only just enough money to see you through till payday!
It all sounds so very sensible and straightforward. It is a short term-loan ‘only till payday’ perhaps just a fortnight away. It is of a relatively small sum, possibly £300, possibly £500 and, before you accept it, you know perfectly well how much interest there will be when you pay it back. That too, will seem a very small sum and well worth the convenience of having the money when you needed it.
And it would be fine, except for the fact that having paid it back with its small amount of interest, you won’t have sufficient money left in your pay packet to see you through the expenses of the next month! The only answer may be to seek another payday loan, and another, and another, with that ‘small amount’ of interest becoming very large indeed. Because of all this I wasn’t in the least surprised to learn of the government’s concern about the very large number of 25 to 35 year olds were seriously in debt, many of them as a result of reliance on ‘payday’ or similar loans to get them through a crisis.
Nowadays being in debt has become regarded as the natural, the normal, even the expected human condition. In my childhood and youth things were very different. My parents had a horror of debt. They believed that if there was something that you wanted you should save up until you were able to afford it. Then, and only then, you could buy it. ‘Hire purchase’ was only just coming into common use. It was regarded with suspicion. My Dad worked out that buying ‘in instalments’ meant that in the end you were paying anything up to twice as much as those who bought it outright. He called it the Kathleen Mavourneen system (there was a song of that name containing the line ‘It may be for years, and it may be for ever’!) I do remember my parents, after hours of discussion, buying just one object on hire purchase – it was a rather good (for its time) Murphy wireless set!
I inherited their fear of indebtedness. I needed a car for my job. I bought a second-hand one for cash – out of my savings. Later I was able to buy a motor-caravan.
New Year, 1979 - My bungalow home and the Toyota
Later too, my wife Heather and I took out a mortgage to buy the home I now live in. I was worried about the burden of debt involved, but at least I had a secure job (that was in the late 1950s – how many jobs are really secure nowadays). About that time I increased the spare-time freelance writing that I had started several years earlier. As well as freelance journalism I wrote several commercially successful books about domestic hot and cold water supply and drainage. To reduce our debt I paid every penny I earned from this source to the Building Society until my mortgage had been paid off – ten years earlier than the agreed completion date! Heather and I were debt-free!
What helped to pay for that bungalow and motor caravan!
It was during those years that debt became a normal and accepted thing. Do you remember when credit cards (Barclaycards were the first I think) were introduced. They encouraged us to get into debt. No more of that tedious ‘saving up’ before you could buy that new vacuum cleaner, that fridge, or that new lawn mower. Barclaycard, I remember, ‘Took the waiting out of wanting’. Wise credit card users paid off the debt quickly to minimise the interest payments. Unwise ones paid a little off and then bought something else that they ‘just couldn’t manage without’. They stayed permanently in debt, month by month helping to enrich the bankers with their interest payments.
Then came the Thatcher years - and government policies that I believe future historians will see as having done incalculable harm to the British way of life. There was the unrealisable dream of Home Ownership for All. It continues to this day. Quite recently David Cameron spoke of the pride and joy felt by those who held the key ‘of their own home’ in their hands for the first time. He didn’t mention the anguish and despair felt by those same home buyers when (possibly thanks to Government policy) they lose their jobs - and their homes - and have had to hand those keys back to the real owners, the money-lenders who provided the mortgage.
No doubt remembering what a successful vote-buyer the ‘right to buy’ legislation (compelling local councils to sell their housing stock to sitting tenants at knock-down prices) had proved to be in the Thatcher era, David Cameron is trying it again – this time demanding that councils offer up to 50 percent discounts (well, it isn’t his money that he is generously giving away!) I doubt if the idea will work a second time round but, if it does, yet more folk will find themselves in debt to the tune of tens of thousands of pounds – and the reserve of affordable homes for letting will take yet another tumble!
Then there are student loans. Every single graduate Member of Parliament received free tuition and, if he or she needed it, generous living allowances for their time in University. Since the Thatcher/Blair era though, Parliament has decreed that the most promising members of the younger generation leave university and enter the world of work (when they can find any!) with a burden of debt of between £20,000 and £40,000! What hope have they of ever getting their feet on the home ownership ladder? They are assured that they don’t even have to begin paying off that debt until they have a substantial income. Many of them will never pay it off completely though they will have the knowledge of that debt hanging over them throughout their lives.
Oliver Goldsmith wrote in The Deserted Village that ‘Ill fares the land to hastening woes a prey, where wealth accumulates and men decay’. In Britain
A tv ‘Soap’ – and Real Life
Aficionados of the tv hospital ‘soap’ Holby City (yes, I am one of them) will remember that a month or so ago there was a strong story line about the development of a plastic surgery department that would augment the hospital’s finances by serving a number of private patients. A distinctly dodgy surgeon and his colleague carried out a number of breast enhancements using poor quality implants from a source in which the dodgy surgeon was discovered to have a strong financial interest.
Patients complained, the story broke in the press and (as happens rather more often in ‘soaps’ than in real life) the guilty surgeon was killed in a car accident leaving his innocent (well, comparatively innocent) colleague and the hospital to clear up the mess and suffer the consequences. The surgeon’s career seemed to be over and Holby City
We Holby City fans are now seeing the same drama, but on a much bigger scale, being enacted in real life. A considerable number of women, in the UK , in France , in Germany
The German government, typically incisive, has decided that the substandard implants will be removed and replaced and that the government will meet the cost of this. Our government, equally typically indecisive, has maintained that the substandard implants do no harm whatsoever – but now agrees that all implants carried out by the NHS will be removed and replaced at public expense. They hope that all the private enterprises that have carried out implant surgery will do the same.
Some, no doubt, will. Some can’t, because they are in administration. Others will remember their first duty is not to their patients but to their shareholders. They are in business to make money, not give it away. The NHS will ‘take up the slack’ and accept the responsibility of any private enterprise that cannot or will not fulfil its obligations. Their first duty, as a publicly owned body, is to the patients.
So, once again – as with the failing banks – the public sector (that means us taxpayers) will be helping out a greedy and incompetent private sector. We should beware of private contractors being invited to fulfil functions previously in the public sphere.
In ‘the market place’ the buyer is trying to get ‘the best at the lowest price’. The seller, on the other hand, is intent on getting ‘as much as he possibly can for as little as he can get away with’. In this instance the fact that those French suppliers were trying to ‘get away with’ substandard implants was discovered before any serious harm was done. Who knows what may happen next time?
‘Constant dripping wears away the stone!’
I am reminded of that proverb when I think of the way in which an increasing number of us have year after year protested, apparently in vain, about the enormous – and constantly widening – gap between the incomes of the wealthiest members of our society and those of the poorest. I originally drew attention to it for no other reason than that it seemed wrong that some of our fellow countrymen had no roof over their heads and didn’t know from where the next meal was coming, while others owned luxury yachts, national newspapers, football teams, and half a dozen palatial residences world-wide!
More recently a carefully researched publication (The Spirit Level’) revealed that levelling of incomes benefited everyone in society – not just its poorest members.. Investigation showed that those countries with the narrowest gap between the incomes of the rich and poor had less crime and violence, more stable relationships, fewer divorces, better health and better standards of education than those – like Britain and the USA – that had a wide and ever-widening gap.
For years the victims of this injustice suffered in silence but during recent months the constant dripping has produced world-wide peaceful protests (the Occupy Movement) particularly by young people. In the UK the ‘squatters’ at St, Paul’s Cathedral are the most evident, but by no means the only manifestation of a movement that has produced protests throughout Europe, in the USA (both in Wall Street and widely across the Union) and in Russia.
Could it be that David Cameron, our Prime Minister, is the latest convert to the ‘New Levellers’? Disturbed by huge rises in executive pay and bonuses in the private sector in the midst of government induced austerity, he is urging that shareholders should have more power to regulate executive pay, and that there should be no rewards for failure.
Predictably perhaps, these modest suggestions have produced outrage in the ‘business community’. It is quite all right (a good idea in fact) to complain that the Chief Executive of a local authority or a hospital board is earning more than the Prime Minister, but to criticise the fact that the annual income of the Chief Executive of an international corporation would be enough to hire six prime ministers smacks of Bolshevism!
I believe that compliance with the Prime Minister’s suggestions would have only a tiny effect on the income gap. Much more radical action than that is needed. However our cause is now being noticed at high level. I can only suggest that we ‘carry on dripping’.
No comments:
Post a Comment