Public and private debt reach record levels under ConDem Coalition

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Household debt in the UK has reached a record £1.43 trillion, according to the BBC. What a marvellous achievement for Gideon George Osborne to put next to his already-record public net debt of £1.212 trillion (excluding interventions) or £2.184 trillion (including them).

If you’re surprised at that, don’t be – he needs to pretend that there isn’t any money so he can cut any services that are still left in the public domain after the fire sale of the last few years.

The Tory plan was always to increase private debt. Of course it was – if you cut public spending for people on the breadline, then they go into debt. Why do you think Wonga.com’s owner Dawn Capital is such a prolific contributor to Tory Party funds, with £537,000 in known donations this time last year?

The rich are shielded from debt problems in the same way they are shielded from taxation, thanks to the way our tax laws have been rewritten in their favour – all their money is safely tucked away in tax havens and can’t be touched.

On average, each adult in the UK owes £28,489. Some owe much more than that, though. Yr obdt srvt doesn’t owe a bean to anyone, despite being very poor, so that’s already £28,489 to be spread among everyone else. Mrs Mike isn’t in debt either.

The BBC report cautiously suggests that the record debt level “might increase concerns that the UK’s economic recovery [you know, the one they keep talking about on the news and in Parliament as if it actually exists] is based on increased borrowing, rather than growth sustained by rising incomes” – which of course is correct.

According to The Money Charity, total net lending by UK banks and building societies rose by £1.9 billion in September 2013 – that’s just in one month.

Over the four quarters to Q2 2013, they wrote off £3.67 billion of loans to individuals. In Q2 2013, the daily write-off was £7.61 million.

Based on the latest available data, every day in the UK 285 people are declared insolvent or bankrupt – that’s one every five minutes; 84 properties are repossessed; 1,447 people lost their jobs and eight people became unemployed for more than 12 months; 141 mortgage possession claims are issued and 113 mortgage possession orders are made; and 431 landlord possession claims are issued and 319 landlord possession orders are made.

The benefit system helps nobody. It has been redesigned specifically to push people further into debt – the cap on benefit rate increases to one per cent per year means people are two per cent worse-off for every year it continues, while inflation remains at current levels.

It is in this atmosphere that words written in this blog more than a year ago come back to haunt us all: “What do people do for money when the State fails them and they can’t get work? They fall into the debt trap.

“High-interest, doorstep lending to poor people is Britain’s latest – perhaps only – boom industry. In other words, the government’s sick benefits regime is forcing the poor into debt to organisations that will take away everything they have left, in order to make up payments on a loan whose interest rate they probably made up on the spot.

“And when they’ve taken everything, what do you do then?

“Do you really want your kids to starve?”

How the hated bedroom tax could help us tackle the hated offshore tax-avoiders

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Hugely unpopular: Thousands of people have demonstrated against the bedroom tax on the poor since it was first announced by our government of millionaires – this one was in Glasgow.

Has your council or housing association re-designated any so-called “spare bedrooms” into box rooms, studies or non-specific rooms yet, to help you avoid paying the bedroom tax?

If not, you have to ask yourself, why not?

It’s only around two months since the so-called ‘state under-occupation charge’ became the law of the land, forcing social housing tenants to lose 14 per cent of their housing benefit if they have one ‘spare’ room, and a quarter of their benefit if they have two or more rooms going ‘spare’ – according to the Coalition government’s definitions, which are, of course, unjust.

Already, thousands of people are sinking into debt, according to a Daily Mirror report today (June 4).

The report states that 1,120 of New Charter Housing’s 1,600 households affected by the bedroom tax – 70 per cent – are in arrears, with tenants losing up to £88 in benefits every month.

Brighton councillors have chosen not to evict tenants who fall into arrears because of the bedroom tax, although some other councils have said this is unrealistic.

And some district judges have stated they would refuse to grant possession orders, if bedroom tax cases came to their courts, citing the Human Rights Act

The Department for Work and Pensions claims that the tax is far (it would, wouldn’t it?) and will either “encourage” or “persuade” families it claims are “over-occupying” to move out, freeing space for others on the housing waiting list, which the Tory-led Coalition has allowed to become hugely over-subscribed due to its failure to invest in building new social housing stock.

The reality is that these families have nowhere to go – for precisely the same reason (lack of social housing stock). They could move into private rented accommodation, but that is more expensive, even for smaller properties, so they would, again, face going into arrears and eventually losing their homes.

A homeless family is, of course, far more expensive for a local authority, as it must then pay to put them up in temporary accommodation – usually a bed and breakfast establishment – at much greater cost then letting them live in council or housing association homes. This is just one reason why the bedroom tax is a waste of taxpayers’ money.

But it doesn’t have to get that far.

Councils in Leeds, Nottingham and North Lanarkshire have been re-classifying spaces in their housing stock as box rooms, studies or non-specific rooms, to help tenants avoid paying the tax. Edinburgh, Birmingham and York councils have been considering the same action.

An e-petition has been launched to get Sheffield Council to re-classify bedrooms as non-specific rooms, and may be signed here.

And what’s to stop councils and housing associations from simply cutting their rents by the 14 or 25 per cent necessary to let people continuing paying the same amount? It’ll be cheaper in the long term!

Some might say that this behaviour is cheating – that it is, in essence, tax avoidance.

Tax avoidance is perfectly legal, of course – and the government has been dragging its heels about changing the law ever since it came into office back in 2010. Could this because they and their rich friends are among the worst tax avoiders, and their money is a major part of the £21 TRILLION currently sitting in offshore bank accounts, helping to ensure the economy stays stagnant and justify the government’s pointless austerity scheme?

Let’s have some uniformity: Rather than have a patchwork of re-classifications across the UK, turning the bedroom tax into a postcode lottery, let’s call on EVERY council to take this step.

When the government complains, the response should be that councils will reverse the step, after the government puts an end to all the income tax avoidance it has been allowing and collects all the money that we, as a nation, are owed.

After that, there won’t be a need for the bedroom tax and so that law can be repealed.

Postscript: There will be naysayers who’ll respond to this by saying it’ll never happen and it can never work. Their principle purpose in doing so is to discourage people from trying.

There is a response to this, as follows: Why not? IF YOU DON’T ASK, YOU DON’T GET!