It looks as if more and more of us will have had Christmas and New Year on Wonga, with 9 million in serious debt, and Britain's debt mountain over £1.4 trillion, writes Dick Skellington.
I have looked hard this year but find I am not able to offer my usual traditional 'reasons to be cheerful' message, and New Year greet. Last year has seen my usual 'glass half full' philosophy turn to a 'glass half empty' one. In the past 12 months we have become a meaner nation, and one in which politicians and media compete to persuade us to turn our backs on the weak and the vulnerable.
It seems more evident than ever that the combination of economic stagnation and government austerity have had an acutely severe impact on our nation's poorest people while at the same time, turning us more isolationist, with an escalation of scapegoating minorities and migrants. We may be turning the corner, but the damage done has been so rooted that many will never recover.
We live in an increasingly divided society which witnessed a steep increase in avoidable deaths last winter. I know we had a very cold winter, but 31,000 excess deaths, a rise of 29 per cent on the previous year, is surely something we should be concerned about, particularly at a time when energy firms are making £53 profit from every customer while happily increasing their tariffs by five times the rate of inflation. Pre-Christmas announcements from the Big Six energy monopolies, following Coalition passing on green tariffs to the taxpayer, fail to redress the escalation in fuel bills since 2010. Freezing bills until 2015, as at least one of the Big Six has done, seems to be a case of slightly opening the stable door after the horse has bolted.
Add to this the Coalition promising to change the Energy Bill to manipulate official definitions of fuel poverty to bring it down, and you can’t help but think we live in increasingly cynical times. Families fall into fuel poverty currently if they spend more than 10% of income on fuel ‘to maintain an adequate level of warmth’. But the new indicator would mean they were in hardship only if they have ‘above average fuel costs’ that would leave them with a residual income below the official poverty line.
But moving the goalposts matters little when you struggle to find the net. The elderly, and poorer families, are growing more and more vulnerable in our so-called 'caring' society. They might be able to afford to heat one room but when they go to bed, some will sleep in cold rooms where they will become increasingly vulnerable to heart disease, strokes and respiratory illness. In some urban areas, such as Stoke on Trent, over two-thirds of the households live in fuel poverty.
This is the same Britain where we are seeing an acceleration in malnutrition. In November, government figures released by Health Minister Norman Lamb in response to a parliamentary question (note how bad news always has to be forced out of ministers), revealed that primary and secondary diagnoses of malnutrition increased from 3,161 in 2008-9 to 5,499 in 2012, with the prospect of even greater escalation in 2013.
The number of people fed by food banks in Britain has also risen – by 170 per cent in the past 12 months. We are witnessing a huge spike in the demand for charity food hand-outs at a time when our top bosses earn 14 per cent annual pay rises – an increase 20 times the average worker's pay rise of 0.7 per cent. Income inequality is at its highest level since the 1930s.
Each year Christmas and New Year grow more commercial than ever and the pressures to buy beyond our means become more and more intense. I learned that the average child's wish list of Christmas presents has reached a staggering £880, compared to the expected average spend of £207 a child. And New Year indulgences lengthen the debt for some.
Christmas and New Year is always a difficult time financially, and despite George Osborne's bluster in seeking to tax the likes of payday loan companies like Wonga, loan banks are surely the only winners as Britain's personal debt mountain tops £1.43 trillion for the first time and is scheduled to get worse. The Centre for Social Justice warned that two of the policies implemented this year by the Department of Work and Pensions, the bedroom tax and universal credit, will force more of us into debt into the next two years.
For some, then, prospects for 2014 look bleak. At the end of November the Government-backed Money Advisory Service (MAS) estimated that 9 million people in England were in 'serious debt', that the problem was most acute in English cities, and that 40 per cent of these people are struggling to pay back what they owe. MAS found that 7 million people were unhappy because of their debt concerns, but that very few sought financial advice. The five cities with the most acute debt levels were the new City of Culture Hull, Nottingham, Manchester, Knowsley and Liverpool. MAS defined serious debt if people felt that their debt amounted to a ‘heavy burden’, or else they had to have missed out on repayments in three of the last six months.
In these locations charity may be harder to find as seasonal costs spiral. A traditional Christmas lunch would have cost you 17 per cent more than in 2012. Christmas puddings have almost doubled in price, potatoes are up by 30 per cent, stuffing by 22 per cent, gravy by 17 per cent, bacon by 13 per cent, turkeys by 8 per cent. The only cheery news is that the cost of Christmas crackers fell by 10 per cent, while mince pies dropped by 14 per cent. Those who may want to drown the bad news in alcohol should note this has risen too, by 12 per cent on average. Even chocolate has risen, by 20 per cent (for smaller bars and portions of course). So if you have not already done so, be prepared to trade up, and ignore the multi-million advertising promotions you see on television. If you are one of the one in ten of us who are still paying for Christmas 2012, you have my sympathy.
Nearly 4 million British families do not have enough savings to cover their rent or mortgage for more than a month. Thousands are being made homeless every year because they are unable to meet their payments. Unsecured consumer debt has almost tripled in the last 20 years, reaching nearly £160 billion. Essential bills have increased by 25 per cent since 2007, with one in six payday loans now used to pay for outstanding household bills. The figures are frightening, especially at a time when our banks continue to act irresponsibly.
Note the Government's zealous approach to failing hospitals and schools, compared with how it has tackled the banking crisis – suggesting we imprison failing doctors, while leaving bankers with their assets and bonuses relatively intact. After a litany of colossal misdemeanours including Libor and suspected Forex rigging, money-laundering on behalf of pariah states and drug cartels, and repeated miss-selling on an industrial scale, still no-one has been struck off, disqualified or jailed. And just to add insult to injury the Parliamentary Watchdog Ipsa promises MPs an 11 per cent pay rise in the forlorn hope that this will stop the recruitment of the privileged and widen Parliamentary access to more humble politicians. Mind you Ipsa have decided to end the Parliamentarian habit of claiming for tea and biscuits, something anyone on welfare breadline payments might find rather stomach-churning. But you never know, some MPs might give their pay rise to charities helping the poor. It's just a thought.
So I do hope you have enjoyed your Christmas in this debt-stricken land and that the New Year festivities were spent in optimistic circumstances. I do hope you thought of others less fortunate than yourselves. Were you transformed like Scrooge? I believe it is better to give than to receive, and reverse the national drift towards heartlessness. And if you can afford to take the kids to a pantomime be prepared for the jokes about bankers being behind you, a chorus of payday loan companies lurking in the gods, the Big Six Energy companies being ridiculed as never before, and the scapegoating of politicians too remote from everyday life by the trappings of wealth, too thick-skinned to care, or too eager to get their 'selfie' taken with people far more interesting than themselves.
Dick Skellington 2 January 2014
The views expressed in this post, as in all posts on Society Matters, are the views of the author, not The Open University.
Cartoon by Gary Edwards