The flawed welfare debate

What is astonishingly absent in the welfare debate is the knowledge that of all groups in our society, it is the poor and vulnerable who are financially exploited in a way which would cause outrage if universally applied.

Let’s start with electricity: the poor are expected, especially in council housing to be on metered supply. Which happens to be the most expensive: so one wonders – who benefits here? The electricity company certainly but one wonders if the councils don’t take undeclared benefits here too.

Next, the problem of the banks: Here I am not speaking of bonuses or the macro-level nonsense spoken by the commentariat but of the unprincipled exploitation of the poor by the banks. We all need bank accounts, yet basic bank accounts are hard to acquire and obviously limited on function, which is a problem when one returns to work.
The essence of this is what Lloyds-TSB calls its “unplanned overdraft facility”. If named more honestly, this would be their “forced-loan facility”. Go overdrawn and the bank will charge a flat rate of £15 per overdrawn item plus a basic £6 per day (for a maximum of ten charges per bank month) for being up to £25 overdrawn until the account is returned to balance.
So lets say that Joe miscalculates and spends £5 more than he has in his bank account but does not get paid for another two days and of course does not have access to a source of credit or additional income.
Lloyds TSB will charge as follows:
£5 to be paid back (basic capital).
£15 for going overdrawn (bank charge)
£12 for two days being overdrawn below £25.
Total: £32.

Basic mathematics will tell us that Joe has just been given (against his will and consent) a forced loan with an repayment rate of 540%.

This is a real scandal yet one with which the Labour Party is not concerned, nor the Liberal Democrats, nor the now “socially aware” Conservatives, nor the commentariat in the media.

No one is taking up the issue of why the poor are placed under the heaviest financial burdens and are still treated as semi-criminal by opinion makers.

Perhaps we need a new socialism in this country.


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