I was listening to a podcast the other week, and I have been reading, about the UKs dependency on the network of Food Banks throughout the UK.
A Food Bank is usually a voluntary organisation that supplies food to people are in financial need. Food is donated by the public and distributed throughout a network of banks. Service users need to be referred to the bank and organisations such as Citizens Advice Bureaus are ticket holders; as they are free advice service they tend to see people who are more financially vulnerable than others dealing with debt issues.
There has been a phenomenal increase in the take up of Food Banks in the last 5 years. Partly due to the increased exposure of them through mainstream and social media, but also due to the harsh public funding cuts to subsistence level welfare benefits and the, close to complete removal, of free legal advice under different Legal Aid Schemes. Further cuts are planned according to the government to help balance the books in the times of this austerity that we live in, due to the past government’s failings blah blah blah…
As an aside to this, despite recent legislation enforcing stricter rules on such schemes, payday money lender use is also on the increase; I assume this will be in part be due to some of the reasons noted above.
My concern with these two practices and with the further reduction in welfare spending is that people are becoming dependent on the schemes. Food Banks and payday loans are supposed to be a last resort. Regardless of how they are marketed, payday loans should not be used on a regular basis. Why should they? Particularly workers on a salary, or fixed income. I know that in recent times it has been a luxury to find such work, but there is growth and more reliability in income.
As I am writing this I can see that Tesco is to close 43 of its stores which is not going to help my case in what I am about to say but please do hear me out.
A person should not have to rely on voluntary assistance to get food on their table. Yes, they may have debts, and yes, they may have limited income. But there are circumstances and systems in place to make sure that essential expenditure is still affordable to your household. It can be held up in court as well going through insolvency procedures to further safeguard the chasing of creditors.
I heard on the radio a lady who did work. She stated that she could not afford or survive without her payday money lender. She had been using the same place for over 12 months. Why? Her income had not changed in that period. She knew what she was getting each month yet the risk was taken to borrow money at extortionate rates to fund something – this was not divulged. Why was she not living within her means. What was missing? This was not addressed on the radio show and it further legitimises the practice.
We need to start being more truthful to ourselves about what is affordable. Higher prices are driven by people willing to pay higher prices. We can afford these higher prices through money that is not ours which increases priced further. The housing market would become more affordable, food and gas would become more affordable, food! These prices will stay elevated for as long as we keep propping them up with money that doesn’t truly exist in our accounts.
Taking out payday loans and taking free food will always keep the price of luxury and non-luxury items at a premium and we need to take a long hard look at how we deal with finances as a whole.