Payday Loans and debt slavery

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“Debt, n.  An ingenious substitute for the chain and whip of the slavedriver.”  Ambrose Bierce (The Devil's Dictionary, 1911)

News

Britain’s Office of Fair Trading (OFT) has referred the entire payday lending industry to the Competition Commission, based on a recent review.  The value of the industry has spiralled from £900 million in 2008/09 to £2.2 billion in 2011/12.  Up to 2 million people currently take out these short term cash loans to make ends meet, at interest rates of typically 25% per month.

 

When made and accepted responsibly, payday loans can be an alternative to unauthorised overdrafts for urgent cash needs.  However, 28% of these loans are not repaid at the end of the month but are rolled over, when the costs start to spiral.  Loans that are rolled over – often because borrowers could not afford them in the first place – provide almost half the total revenues of the industry.

Part of the OFT’s criticism is on how payday loans are sold – emphasising the speed and simplicity of getting cash, rather than the costs and risks involved.  Only 74% of lenders run affordability checks on new clients; the figure falls to just 23% in the case of extending a loan.  This suggests that lenders may not rely so much on prudent lending to ensure high repayment rates, but on their debt collection methods.

Another major criticism by the OFT is that many of the organisations actually making the loans are concealed behind intermediary companies, agents or brokers.  Borrowers have to reveal all their personal details, including mobile phone number, email and address, while the actual lender remains obscure.  This relational distance is part of the reason why the number of complaints against lenders has increased 10 fold in the last 4 years.

It is an indictment on our society that we allow the normalisation of business based on exploiting people’s naivety, hardship or desperation.  Unmanageable debt is a major cause of mental health problems and relationship breakdown.  Debt carries a relational as well as financial cost; alleviating it warrants both kinds of response.  

Read on…

An offshoot of the Occupy Campaign in USA is an imaginative project to buy up a bundle of unpaid medical debts for a fraction of their face value, then cancel them.  Read more about the Rolling Jubilee initiative here.

Walk the talk

There are a growing number of charities that help people manage their debts – providing relational support as well as financial advice.  Could you do something to support one in your area?

The last word

From the Bible, Proverbs 22 verse 7: “The rich rule over the poor, and the borrower is slave to the lender.”

Magnetic Mandela

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“Do I not destroy my enemies when I make them my friends?” Abraham Lincoln

News

Despite having left the South African presidency in 1999 and stepped out of public life nine years ago, the ailing Nelson Mandela is still a central figure in South African politics and society.  Not because he may hold some power behind the scenes in the ANC, nor because he intervenes in political affairs.  Rather it is due to the extraordinary relational footprint he has left in the nation.

The history of South Africa over the last 20 years could have been very different had Mandela not been such a remarkable leader relationally.  Despite the inhuman conditions of Robben Island prison, Mandela treated his captors with courtesy and respect, to the point where some felt they were more like Mandela’s guests than his jailers. 

Following his release he engaged with the white government leaders with dignity and courage, which slowly won their trust and allowed a passage towards peaceful elections.  Mandela could so easily have been driven by bitterness, resentment and anger which could have led the country towards showdown and civil war.

Other stories are still being told of how Mandela gained the loyalty of the white elite by keeping the same security staff in the presidential palace after coming to power.  The film Invictus tells how he earned the trust of the wider white population by embracing the Springboks – who epitomised Apartheid – and enthusiastically supporting their successful bid to win the 1995 Rugby World Cup.

Mandela’s domestic life was more troubled, and his first two marriages ended in divorce. Nevertheless, his remarkable accomplishment of uniting South Africans across racial and tribal divides, and leading them peacefully from Apartheid to democracy, explains the enduring influence which this frail 94 year old still exerts from his hospital bed – right round the world. 

There is a magnetic power in this remarkable person; no wonder no one wants to let him go.

Read on…

The trial of Nelson Mandela in 1964 led to his 27 years of imprisonment; read his remarkable speech at that trial, carefully documenting the grievances of the black South African population and the ANC’s strategy here.  

Walk the talk

Treating people who are prejudiced against you with dignity and respect can be transformative of the relationship; is there someone you need to respond to in the opposite spirit?

The last word

From the Bible, Matthew 5, verse 39: “You have heard that it was said, ‘Eye for eye, and tooth for tooth.’ But I tell you, do not resist an evil person. If anyone slaps you on the right cheek, turn to them the other cheek also.”

The Woolwich murder: a relational dashboard

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“Anger ventilated often hurries toward forgiveness; and concealed often hardens into revenge.”  Edward Bulwer-Lytton (British politician and novelist, 1803-73)

News

Wednesday’s brutal murder on an off-duty soldier in London has thrown up a wide range of reactions and responses which serve as indicators of several key relationships in Britain.

Positive scores:

• The courage of members of the public who stopped to help, one woman from Cornwall even engaging an attacker in conversation to try and calm the situation; this suggests a good degree of solidarity across communities in Britain
• Several Muslim community leaders were quick to voice condemnation of the attack, as the perpetrators had delivered an Islamist tirade at the scene.  This points to a strong desire by the Muslim community to distance itself from extremists and affirm its shared values with the rest of the country
• The police who arrived on the scene showed restraint as they didn’t shoot to kill, but instead to disarm, the attackers; this measured response helped to limit the relational damage which might have escalated if they had adopted a heavy handed approach (such as sparked of the London riots in 2011)

Negative scores:

• The time, place and brutality of the attack and the choice of victim suggests that the relationship between Islamist extremists and the British armed services is dire to the point where individual humanity is lost in the hatred generated by ideology
• Sensational media coverage has not served the British public well; it gave a public platform to the jihadists which has led to violent reactions by far right groups such as the English Defence League, and may yet inspire copycat attacks on other members of the armed forces
• By waiting on the scene after the attacks and letting themselves be filmed, the extremists successfully manipulated the media and used them to magnify their message

Read on…

An analysis in the Guardian by a former Cobra staff officer today suggests the government over-reacted by convening the highest national security committee, Cobra, to the detriment of a number of relationships; read the article here.

Walk the talk

The pathway to murder starts with resentment, leading to bitterness, hatred and violence; are you aware of any growing resentment in the heart of someone you know well, which you could help defuse?

The last word

From the Bible, Proverbs chapter 29 verse 8, “Scornful people inflame a city, but those who are wise turn away wrath.”

Sexual exploitation and the limits of freedom

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“The only freedom I care about is the freedom to do right; the freedom to do wrong I am ready to part with on the cheapest terms to anyone who will take it of me.”  Thomas Huxley (atheist and defender of Darwin’s theory of evolution), 1870.
 
News
Seven members of a paedophile gang based in Oxford were sentenced this week, having been guilty of grooming and then sexually exploiting a number of vulnerable girls as young as 11 over several years.  This is the latest in a string of similar cases around British cities.

‘How can this be happening?’ is a phrase cropping up in the media.  Accusations of blame fly in all directions: staff of care homes where most of the girls were living; police and social services who didn’t respond sooner; religious or cultural differences; apathetic members of the public who didn’t speak up; or the girls themselves, for their risky behaviour.

The underlying problem in society is the dilemma between maximising freedom and choice (especially in the area of sex) and the responsibility to protect the more vulnerable members of society.  The reality in our culture is that individual freedom holds the trump card.

Now freedom is all very well, provided there is a way of restraining ‘free’ people from exploiting and abusing others.  There can be three mutually reinforcing sources of such restraint: moral discipline, the cultural consensus, and the law of the land.  What has happened over the last 50 years?  Morality has become highly individualised, and the cultural consensus is no longer influenced by those religious values emphasising the importance of doing right and avoiding sin, on the basis of being accountable to God.

So that increasingly leaves the law and various government agencies, such as police and social services, with the job of stopping people from sexually exploiting vulnerable children.  Is that realistic?

There is something deeply flawed with our culture of individual liberty, as the freedom of some will always be at the expense of the vulnerable or poor or small or disabled.  We cannot delegate their protection to the state.  Instead we need a decisive shift – culturally and personally – towards valuing our relationships and responsibilities one to another, even if that involves some loss of individual freedom.

Read on...
For more details on the actual extent and nature of child sexual exploitation by gangs and groups in Britain, read the Executive Summary of this recent report by the UK Children’s Commissioner.

Walk the talk
What steps could you take in your home, workplace or community to encourage people to develop a greater sense of responsibility towards members of more vulnerable groups?

The last word
From the Bible, Luke 10, verses 30-32: ‘A man was going down from Jerusalem to Jericho, when he was attacked by robbers… A priest happened to be going down the same road, and when he saw the man, he passed by on the other side.  So too, a Levite, when he came to the place and saw him, passed by on the other side.’

The shirt on your back

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“Fashion is made to become unfashionable.”  Coco Chanel

News

So far 275 bodies have been pulled of the garment factory in Bangladesh which collapsed on Wednesday, but hundreds of other people in the building are still unaccounted for.  The tragedy has revealed a chain of connections from the grieving community in the outskirts of Dhaka all the way to high streets in Europe and North America.  

At one level this terrible event can be viewed through a culpability lens.  Are the factory directors to blame for ignoring the warning cracks in the structure, or the building owner who failed to meet construction standards?  To what extent is the government liable for its failure to implement health and safety policies, or is it the fault of western clothing brands who are constantly seeking to reduce costs in the supply chain?

It is likely that the pressure to drive down costs and increase profits by companies at the local, national and international levels ultimately influenced the main decisions and short cuts that led to the building collapse on Wednesday with thousands of people inside. 

The average American buys 68 garments and 8 pairs of shoes a year.  The West’s demand for cheap, ‘throw away’ fashion means factories in places like Bangladesh have to minimise their financial costs to stay in business – but at what relational cost?  The supply chain is not just an economic concept – it is a relational one too.

If this tragedy were to spur more consumers in the West to pressure big brands to take more responsibility for the working conditions at the other end of the supply chain, even if it means paying a little more for their clothes, then the loss of hundreds of grieving families outside Dhaka may not be entirely in vain.

Read on…

A seven minute video produced by the Fair Wear foundation, based in Amsterdam, explains the complexities of clothing supply chains, the ways people can be exploited and what can be done to improve the conditions for factory workers. Watch it here.

Walk the talk

Do you know where the shirt you are wearing was made?  Why not go to the website of the retailer you buy from or brand you wear to find out how ethical their supply chain is – and then send them an email with your thoughts?

The last word

From the Bible, Deuteronomy 22 verse 8: “When you build a new house, make a parapet around your roof so that you may not bring the guilt of bloodshed on your house if someone falls from the roof.”

The Thatcher legacy: a relational audit

- a personal view by Michael Schluter

 
We depart from our usual Friday Five format to bring a commentary by Michael Schluter on Margaret Thatcher’s legacy.  Michael headed up the ‘Keep Sunday Special Campaign’ in 1985-86, which led to the only defeat of a whole government bill while Mrs Thatcher was prime minister.

Margaret Thatcher is remembered with respect and affection by many, and rightly so, for breaking the power of the unions and re-establishing non-aggressive industrial relations in Britain. From a relational perspective there are few things more damaging to relationships than the breakdown of law and order.  ‘Parity’ in the relationship between unions and management in the coal mining industry, and between unions and government generally, was at a low level when Mrs Thatcher came to power. Some may feel that power swung too far back towards the employers, but I believe everyone should acknowledge there are some important relational benefits in Mrs Thatcher’s legacy.

However, it has to be recognised also that there are significant relational downsides to her legacy. She was so focused on the individual, and rolling back the power of the state, that she famously said ‘there’s no such thing as society’ (see below). Arguably, she went over the top in pursuit of market solutions and ended up closing mines and factories in the Midlands and North of England without making adequate preparation for alternative sources of employment and incomes. This left many communities and households devastated for a generation. The bitterness and resentment of these people has flared up again this week following Mrs Thatcher’s death.

In Europe her fierce defence of British interests gave the UK short-term financial benefits but probably at the expense of long-term goodwill and friendship with our European neighbours.  On the other hand, her contribution to ending the Cold War helped re-establish the relationship between the peoples of East and West Europe.

In terms of family and religious life, she attacked the institution of Sundays, which led on to the substantial commercialisation of Sundays under John Major in 1994. This undermined the opportunity for many to enjoy a shared weekly day off with friends and family.

Above all, through her belief in the magic of the market, Mrs Thatcher’s financial reforms cut off the few remaining relational threads between providers and users of funds for investment, and led to increased relational distance between management and employees as company size and pay differentials burgeoned.

So hers is a complex and controversial legacy from a relationships standpoint. Let’s hope for great leaders in the future with the same dedication and determination, but with a relational vision rather than an individualistic and materialistic agenda.

"They are casting their problems at society. And, you know, there's no such thing as society. There are individual men and women and there are families. And no government can do anything except through people, and people must look after themselves first. It is our duty to look after ourselves and then, also, to look after our neighbours."  Margaret Thatcher in an interview in 1987

Relationships and reorganisation in the NHS

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“When wealth is lost, nothing is lost; when health is lost, something is lost; when character is lost, all is lost.” Billy Graham

News

Far reaching reforms to the English National Health Service (NHS) were implemented this week, as responsibility for health care spending was passed down to over 200 local commissioning groups.   At the same time, deep problems in the NHS were brought to light in a damning report into poor care in North Staffs, which led to 1200 unnecessary deaths and a culture of neglect.

NHS reorganisations are hugely expensive.  A senior NHS executive admitted that during the last restructuring, the service lost its focus on patients and was preoccupied with managing the changes and merging organisations. 

The effectiveness of any reforms depends on accurate diagnosis and appropriate prescription.  The fundamental issue is an absence of values around care and respect; managers pursue financial targets rather than patient care.  But the prescription proposed is more of the same: setting new targets around values, holding people accountable for care and punishing staff who fail to deliver.

Such remedies view the healthcare service as a giant machine, which can be micro-managed to improve performance.  But what if the NHS is essentially a vast network of relationships?  Changing organisational values and culture then becomes an organic, relational challenge, involving leadership by example, cultivation of trust and responsibility, and a focus on patients’ experiences as much as clinical outcomes.

These softer goals are less amenable to target setting from a centralised bureaucracy; but they are more human, more caring, and more likely to deliver positive outcomes – not only to patients, but to anxious, overworked staff too.  

Read on…

A much more thorough analysis of relationships in the NHS was made by John Ashcroft and Geoff Meads in 1999.  Although the context of the NHS has changed, much of the underlying thinking and analysis is still pertinent.  Read the book online here.

Walk the talk

Is there an organisational problem you are trying to solve by tightening up the rules?   Might a focus on cultivating more healthy relationships of trust and respect produce a better result in the long run?

The last word

From the Bible, Proverbs 11, verse 17: “Those who are kind benefit themselves, but the cruel bring ruin on themselves.”