Speech on Health Inequalities in the North East (Long Version)
Blog / January 25, 2012 / Comment now
MP claims government Workfare scheme is failing the unemployed
Press Releases / January 24, 2012 / Comment now
Labour’s Grahame Morris has pressed Work and Pensions Minister Chris Grayling for answers on compulsory workfare programmes for the unemployed.
In a Commons question time the Minister denied the government was operating a workfare scheme but instead referred to ‘mandatory activity’ for the unemployed.
The Minister said: “I can confirm that we have schemes in place as part of people’s job search. They include mandatory work activity”.
Mr. Morris said “Profits at Poundland soared by 34% in 2011, with people on workfare forced to work for free in Poundland stores”. He went on to ask: “Who is the real beneficiary of workfare: the taxpayer or the shareholder?”
The Minister claimed that more than 50% of young people who go through the scheme moved quickly into employment and in some cases with Poundland.
However a report commissioned by the Department for Work and Pensions in 2008 ‘A comparative review of workfare programmes in the United States, Canada and Australia’ found little evidence for the effectiveness of Workfare.
The report stated that “Workfare has a deterrent effect which stops people claiming, or encourages them to leave welfare.
It went on to say “There is little evidence that workfare increases the likelihood of finding work.
In fact, subsidised or ‘transitional’ job schemes that pay a wage were found to be more effective in raising employment levels than ‘work for benefit’ programmes.
In June 2010 the government abolished the £1 billion Future Jobs Fund which gave businesses in unemployment hotspots up to £6,500 for creating jobs that would last at least six months in favour of mandatory workfare.
North South Divide Exacerbated by Coalition policies
Blog / January 19, 2012 / Comment now
It has been announced this week that unemployment reached its highest point since 1994. The unemployment figure of 2.68 million for the period September-November 2011 represents a rise of 118,000 from the previous quarter. Youth unemployment for the same period was recorded as 1.04 million, an increase of 52,000 on the previous quarter, and is now at the highest level since current records began in 1992. In Easington, the number of unemployed claimants was 3,063 in December 2011, a rise of 471 from December 2010.
The rapidly rising unemployment rate is testimony to the failing economic policies of this Tory-led Coalition that chooses to stand aside at a time when intervention is desperately needed. However, the impact of these job losses is not simply being felt evening across the UK. Instead, a decade of progress made in reducing the North-South divide is being reversed. In the North East unemployment has increased 19% and stands at 11.7% compared to a national average of 8.4%.
Coalition Ministers has sought to propagate the myth that the North East fared no better during the boom years of the Labour government. However, this is not supported by the facts. Based on Gross Value Added per head indexes, the rate of growth in the North East went from being the lowest of the regions during the 1990s to being the second highest during the last decade. Employment growth between the mid-1990s up to the 2008 economic downturn increased by 11.2% compared to 9.2% nationally.
Another myth, this time put forwarded by the Prime Minister prior to the 2010 General Election, is that the North East had become over reliant on the public sector at the expense of the private sector. Rather, between 2003 and 2008, private sector employment rose by 9.2% whilst at the same time public sector employment grew by only 4.1%. Between 1999 and 2007 the number of North East businesses rose by 18.7% which compares favourably to London’s business growth of 19.6% for the same period.
The North East economy began its long overdue recovery under the last Labour government, following decades of neglect by Tory governments. This record is being quickly undone by coalition policies across all government departments. Whilst the North East was hit hard by the global downturn of 2008, it is the policies of this government which are entrenching a North-South divide and disproportionately damaging the North East’s economy. Even after the global downturn, employment rose under the Labour government between August-October 2009 and August-October 2010 by 24,000 before falling sharply under new the Coalition government.
The inherent unfairness of Coalition policies for the North East is not confined to unemployment. The Association of North East Councils has highlighted the huge variation in changes to council grant funding per person across the UK as another area where the North East will be worst affected. The reduction in councils’ revenue support grant and changes to the allocation rules for additional funding from central government means that the most deprived and poorest areas will lose most between now and 2012-13.
Heat Map: Changes to Council Funding
The unfairness is highlighted by the fact that councils in more prosperous areas in the south will receive a per person increase whilst North East councils face some of the largest cash cuts. There are further proposals for other changes to how councils raise their funds such as the localisation of Business Rates. Early analysis by Durham County Council has shown that such a move would increase the budget of Westminster Council by £950 million each year whilst Durham County Council would lose a further £86 million.
Coalition Ministers have also announced their intention to allow regional pay differences for low paid workers across the public and private sector. Whilst no firm policy has been announced by the government, the issue was raised in the autumn statement which asked for expert advice on how public sector pay might better reflect local markets. Rebalancing our economy for the future and redressing the north-south divide should be a priority for government. However, proposals to entrench regional pay differentials in the public and private sector would simply entrench this divide.
A final assault on the North East’s economic future has been the destruction of our well-established structures for regional development. One of the first actions of David Cameron’s government was to abolish our Regional Development Agency, One North East, and do away with Regional Ministers who had been able to play an important role working with the private sector on large scale investment programmes. The net affect has been a two-thirds cut to regional development funding and the establishment of a much smaller national fund to which every region must compete for investment. Pricewaterhouse Coopers evaluated the work of RDAs between 2002-03 and 2006-7 demonstrating their role in improving economic output from investment. The report showed that for every £1 spent by RDAs an average of at least £4.50 of economic output was achieved. This rose to an output of at least £6.40 when future benefits were assessed. Local Enterprise Partnerships have been set up to replace RDAs, however these bodies are unfunded and are dispersed across the region.
The Labour government was able to mitigate against the worst impact of the global downturn through investment and support for private sector growth. The reckless actions of this Coalition have set in reverse the progress that was being made between 2009 and the last General Election. The North East requires an alternative vision for confidence, growth and jobs. Labour’s Five Point Plan provides a foundation for this and proposals for a guaranteed job paid for people out of work for over 12 months, as suggested by IPPR North, would start the process of regeneration so badly needed in the North East.
£125 million of funding for the North East put at risk by Coalition’s failing regional policy
Blog / January 9, 2012 / Comment now
Millions of pounds that has been earmarked for regional development projects in the North East has been put at risk by the inaction of government Ministers. The unallocated funds are part of the European Regional Development Fund (ERDF), which exists to boost growth and jobs regionally, particularly in disadvantaged areas. The potential loss to the North East highlights the disastrous consequences of the decision to abolish the Regional Development Agency One North East which previously managed the process.
The North East economy has already been plunged into a regional recession according to economists at IPPR North due to Coalition spending cuts and rising unemployment. Over 32,000 public sector jobs have been axed and unemployment stands at over 11%. The private sector-led recovery that was promised by David Cameron has also not materialised with the Northern TUC showing declining employment in the private sector since the Coalition took power in May 2010. It is now clear the extent to which Ministers have failed to act with any sense of urgency in response to the growing decline of the North East economy.
Not only has there been a complete vacuum in regional policy under the Coalition, Ministers seem to be overseeing a ‘managed decline’ in a region where the Conservatives and Liberal Democrats have next to no elected representatives. European Commissioners have raised real concerns that up to £125 million of ERDF funding could be jeopardised as a result of the dither and delay of government Ministers. As the rules stand, if this money is not allocated in time, two thirds would automatically be lost to central Treasury funds. This is not just a problem being faced by the North East, with 41% of ERDF funding for England still unallocated.
Labour made significant progress supporting weaker regional economies such as the North East and developed flagship policies and investment structures. One North East, set up by Labour, ensured that infrastructure was built to attract and support new businesses, high-tech industries and other emerging markets. In an area which was dominated by coal mining and fell into economic decline under the last Tory administration, investment in infrastructure was well overdue in order boost economic activity.
However, One North East was one of the first causalities of the Coalition cuts. Its replacement by much weaker and unfunded Local Enterprise Partnerships has made achieving jobs and growth in the region much harder. The failure of the new regime to even ensure the efficient allocation of EDRF funding is beggar’s belief. Business Minister Mark Prisk all but accepted the failure of government’s new regional policies when he was forced to write to local decision makers to urge them to make use of national matched funding opportunities given the slow progress on allocating the funds in the past year. In addition to this, overall funding for regional development has been cut by upwards of two-thirds.
The current structure of having multiple Local Enterprise Partnerships and a single National Regional Growth Fund effectively means that there is no regional policy at all. If the North East region is to stand any chance of meeting the current economic challenges through creating jobs and growth this has to change. Labour understood the difficulties facing the northern regions and made good progress during 13 years in government. This is now being unravelled by the reckless reforms and spending cuts of this Coalition. Labour’s five point plan would also help boost regional growth now with a one year National Insurance tax break for small firms taking on extra workers and bringing forward long-term investment projects.
Time for a Public Debate on Firearms Controls
Blog / January 4, 2012 / 1 Comment
The terrible events which culminated in the deaths of four people in Horden in the heart of my constituency have prompted me to write this article. While the full details of the events leading up to this tragedy are still unfolding there are more general concerns relating to the storage of firearms in a domestic situation and whether firearm licensing procedures are robust enough to address concerns surrounding mental health.
First of all I would like to express my deepest sympathies to the family and friends of those who have lost their lives. The thoughts and feelings of the whole community are with those affected by this terrible tragedy. Horden is a stable, tightly knit former mining community with its own distinct identity. The events of 1st January have shocked and devastated local residents. I went to school only a mile or so away and I know many people from Horden on a personal and long standing basis.
I want to give credit to Durham Constabulary who acted quickly to reassure local people that there is no continued threat to the safety of the community and I would like to thank all the emergency services, the Police, Paramedics and the Armed Response Team for their rapid and professional response to the shootings in Horden. The investigation is being handled in a professional and sensitive manner and I hope the Police are given the time to establish exactly what happened.
I welcome the Chief Constable Jon Stoddart’s referral of the case to the Independent Police Complaints Commission in light of their previous contact with Mr Atherton when he threatened to self-harm. I understand that the police reviewed Mr Atherton’s firearms licence at that time in 2008 however decided not to revoke it.
Without seeking to pre-empt the outcome of the police investigation or the IPCC review into the events that took place in Horden there is an opportunity to consider the effectiveness of current rules concerning fire-arms control in the UK. I welcome the intervention by Keith Vaz MP, Chairman of the Home Affairs Select Committee, who this week sought an update from government on its progress since his committee called for the codification of the 34 separate pieces of legislation covering UK gun law last year. He has also raised the issue of strengthening the link between police and the medical profession when the holder of a gun licence is known to have developed mental health issues.
Other important issues in this debate must be the consideration of whether firearms should be kept in domestic premises in any situation and which is the appropriate authority to evaluate a person’s mental health when issuing gun licences in the first place. Once issued gun licences are valid for five years and determining a person’s continued suitability to possess firearms over this period raises further difficulties.
As we go forward in the wake of this terrible tragedy it is appropriate that there should be a public debate over whether gun laws should be reviewed. This does not mean the law should or will be changed; ultimately that is a matter for Parliament and Government following a sober review of the current protections in legislation. Britain already has some of the toughest gun control laws in the world. The broader issues raised by the Horden case must be looked at in a calm and measured manner once the Police and IPCC investigations are complete and I would welcome a public debate in which the requirements of the shooting fraternity are balanced against the need to protect public safety.
I continue to offer my support and assistance to the residents of Horden and to the wider community who have been affected by this tragedy. I would also welcome your views on this issue.
Other cases such as that of Christopher Foster who murdered his wife and teenage daughter in 2008 show similar hallmarks to that of the tragedy in Horden. Depression is a real and serious illness with recognisable symptoms affecting a person’s physical, psychological and social wellbeing. There are many ways mental health issues can arise such as relationship breakdown, family or work pressures, debt or bullying and it can affect anyone at anytime in their lives. It is essential that the symptoms are recognised and that people receive the right treatment and support. There is a strong argument that removing gun licences in these situations should become a matter of course.
Anyone who is suffering from depression and mental health issues should consult their doctor, who can rule out any physical illness which might cause the symptoms of depression. According to NICE some people with milder forms of depression may benefit from a psychological therapy alone but you may also be offered anti-depressants. People with moderate to severe depression should be offered anti-depressants as well as talking therapy. If symptoms persist you may be referred to the local community health team for specialist support.
Depression can be an intense and debilitating illness and if you or someone you know is experiencing any symptom you should seek help. In addition to your doctor there are a number of other organisations who may be able to help with advice and support. A selection of these is listed below.
MIND
0300 123 3393
Samaritans
08457 90 90 90
Alcoholics Anonymous
0845 769 7555
www.alcoholics-anonymous.org.uk/newcomers
Stonewall
Info line 08000 50 20 20
SANELine
0845 767 8000
Preventing young suicide
0800 068 41 41
Childline
0800 1111
Depression alliance
Refuge
0808 2000 247
Eating Disorders Association
0845 634 1414
Shelter
0808 800 4444
NHS Direct
0845 4647
Grahame Morris speech on Unemployment to the House of Commons
Blog / December 15, 2011 / Comment now
Grahame M. Morris (Easington) (Lab): I rise to support the motion in the name of my hon. and right hon. Friends on the Front Bench. We are aware of the national figures, so in the limited time that I have I will concentrate on the picture as it affects Easington and the north-east region.
As Opposition Members are aware, the north-east has suffered more than perhaps any other region. Unemployment currently stands at 11.7%. In both the public and private sectors, unemployment is rising unabated as a direct consequence of the Government’s policies.
As we already know, the public sector is losing jobs more than 13 times faster than the private sector can create them. We were promised a private sector-led recovery. We were told that the public sector jobs that have been lost in the north-east—we have lost more than 32,000 so far—would be replaced by a growing private sector. That clearly has not happened over the past 12 months.
The latest job figures show that the north-east has lost a larger proportion of jobs than anywhere else in the country. We have 6,000 fewer jobs in the construction sector compared with the same period last year. Clearly, Government policy has had a direct impact on the private sector. Cutting infrastructure projects and the Building Schools for the Future programme has hit construction jobs. The figures produced by the northern TUC show that the public sector is losing 2,000 jobs a month.
As my hon. Friend the Member for Stockton North (Alex Cunningham) mentioned, the Conservative Government of the 1980s and early 1990s bear a heavy responsibility for the worklessness that exists in areas such as mine. When the traditional industries were still operating—in my case it was coal mining—the numbers of people who were employed were high and the numbers on benefit were relatively low. It was not until the pits closed that we saw significant increases in unemployment and incapacity claims. As hon. Members have already said, there is a human cost to unemployment. After closing the pits in Easington and in the north-east, the Conservatives left villages, towns and entire communities without work.
Ian Lavery (Wansbeck) (Lab): Does my hon. Friend agree that the unemployment statistics in Easington are very similar to those in Wansbeck? In my constituency, there is in excess of 30 people applying for each job vacancy and that is intolerable. The Prime Minister has kept one of his promises: before the election, he said that the north-east would be hit the first and hit the hardest.
Grahame M. Morris: Indeed. I share my hon. Friend’s concerns, and that has certainly been the case. We are facing a worsening of the north-south divide. It is also the case that the north-east has faced some of the worst increases in unemployment across the UK. The hon. Member for Salisbury (John Glen) said that there were 1,000 people out of work in his constituency. There is more than three times that number in my constituency. The number of 18 to 24-year-olds out of work in Easington has increased by 65%. For the over-50s, the figure is up 58%, which is just as concerning. The situation for those out of work in the north-east is much bleaker than in many other regions.
Unemployment and worklessness are not evenly spread across the country. Indeed, they are concentrated in particular pockets, largely the older industrial areas of the north-east, Merseyside, Scotland and Wales, and that makes unemployment far harder to deal with. I should like to commend the excellent work carried out by Professor Steve Fothergill and his colleagues at Sheffield Hallam university in identifying some possible solutions. I know that time is short, so I will bring my speech to a close.
There are real concerns about the Government’s intentions in relation to workfare. If jobs exist, why are they not being offered as real jobs with real wages? We need a plan from the Government for jobs and growth. Our Front-Bench team has a five-point plan to kick-start the economy, but the Government could go further. There are some helpful suggestions from the Institute for Public Policy Research for supporting employment, and I raised them with the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), in a recent Adjournment debate. I would point out, however, that the Government’s promises on jobs and growth are as hollow as a chocolate Father Christmas.
Child Poverty in the North East and Easington
Blog / December 14, 2011 / Comment now
Figures from the North East Child Poverty Commission show that the Coalition Government is struggling to meet the 2020 Child Poverty eradication target, especially in areas of high deprivation such as the North East and Easington.
Nationally 2.8 million children are living in poverty, around 21 percent of all children in the UK. In the North East the figures show that 132,000 children are in poverty, nearly one in four of all children in our region. While places such as Hexham (9%) and Berwick (14%) are below the regional and national average, inner city and de-industrialised parts of the North East struggle to reduce child poverty and it is accepted that without significant Government intervention the 2020 child poverty target will be missed.
Easington constituency headline child poverty rate is 28 per cent, however, there are great variations within the constituency with the Eden Hill ward (49%) and Deneside (38%) suffering high levels of deprivation compared to Hutton Henry (9%) and Seaham North (12%) which have considerably lower levels of child poverty[1].
The measure of poverty that is used by most governments around the world, including the UK is “those households whose income falls below 60% of the median income”. The Government’s figures show that a couple with two children aged 5 and 14 would need a weekly household income of below £379 before housing cost (BHC), or £346 after housing cost (AHC), to be defined as living in poverty. A single person with two children aged 5 and 14 would be classified as living in poverty if their income was below £297 BHC and £256 AHC[2]. In 2009/10, 16 per cent of working-age adults (5.7 million) were in households in the UK with incomes below 60 per cent of median household income BHC and 22 per cent (7.9 million) AHC[3]. Most worryingly, around 55% of children living in poverty are in households where at least one parent works. The Government have been promising to “make work pay” but all their efforts have been directed at cutting and withdrawing benefits. They have done nothing to address working poverty and poverty pay. Labour’s national minimum wage was an important first step to addressing poverty pay; however, it is time to move beyond a minimum wage to a living wage. If the Government are to “make work pay” they need to support a living wage to end poverty for working families. In London employers who commit to paying a Living Wage have lifted more than 10,000 families out of working poverty. Employers also repeat the benefits of enhanced quality of work from staff, a fall in absenteeism, and improved recruitment and staff retention.
The new OECD report Divided We Stand: Why Inequality Keeps Rising finds that inequality has risen faster in the UK than in any other rich country since 1975.
Inequality exploded under the Thatcher Government, and while progress was made in the early years of the Blair Government, inequality has started to rise again. The gap between the richest and the poorest in society does matter, especially when it comes to the life chances of children.
The inequality gap is back on the political agenda, especially in a time of austerity. There is growing public concern according to OCED report author Michael Förster, “In almost all countries apart from the US and Japan, more than 50% of people say that inequality is too high. In the UK, it is 65% so I think everyone agrees it is a problem”
The Labour Party acknowledged the significant problem of child poverty after 18 years of a Tory Government. Labour lifted 600,000 children out of poverty, and introduced the commitment to end child poverty by 2020. A target supported by both Coalition partners when in opposition. David Cameron insists that the government’s cuts will not increase child poverty; however, evidence is mounting of yet another broken promise. The Institute of Fiscal Studies report Child and Working-Age Poverty from 2010 to 2020, has found that child poverty will continue to rise and the 2020 target will be missed.
Alan Milburn, the Coalition Governments adviser on social mobility has stated that:
“Progress on child poverty is stalling”
“Worse than that, it has almost certainly started to reverse”.
“Child poverty is set to rise and, if things go on as they are, it is likely to go on rising for many years to come”.
The previous Conservative Government took child poverty in the UK from 13 per cent in 1979, to 29 per cent when they left office in 1997. As child poverty begins to rise again the Government’s only answer is to question the internationally recognised method for calculating poverty, actions condemned by the Family Action Group described as “another nail in the coffin of the life chances of a generation of children” adding “moving the goalpost on income poverty might help the Government balance the books but it will send the life chances of children into the red”
Child poverty can have a devastating effect on a child’s health, wellbeing and life chances.
Infants in the poorest families have an almost 10 times higher chance of dying suddenly in infancy than those in the highest income group.[4]
The impact on children’s lives of chronic illnesses, such as asthma and diabetes, seems to be greater among poor children. Acute illnesses are more likely to affect poor children and they are more likely to experience hospital admission.[5]
There is an ‘attainment gap’ between pupils who receive Free School Meals and those pupils that don’t receive FSM. 15% of boys receiving FSM did not get 5 GCSEs in 2010, whereas only 5% of boys that didn’t get FSM failed to get 5 GCSEs.[6]
Children who live in poverty are twice as likely to live in bad housing and this means that they are a third more likely to suffer respiratory problems such as chest problems, breathing difficulties, asthma and bronchitis than other children. Overcrowding and spells living in temporary accommodation are also factors that affect children growing up in poverty.[7]
There is a strong stigma attached to living in poverty and poor children are often bullied at school. Not wanting to appear poor means that a lot of children who are entitled to Free School Meals don’t actually take them and poor families will often go without other items to protect their children from this stigma[8]. This issue was covered in a BBC animated film called ‘The Wrong Trainers’[9]
Only one in nine children from low income backgrounds will reach the top 25% of earners as adults[10]. The UK has very low ‘social mobility’ which is sometimes expressed as ‘poor children grow up to be poor adults’.
It is estimated that child poverty costs the UK approximately £25 billion per year, including around £17 billion that would go back to the government (through increased taxes and reduced benefit payments) if child poverty were eradicated[11].
The Government are failing to meet their child poverty obligation judging by the standards outlined by David Cameron – “the right test for our policies is how they help the most disadvantaged in society”. A test he will fail if he continues to ignore child poverty.
End.
[1] End Child Poverty, Poverty In Your Area: Available at http://www.endchildpoverty.org.uk/why-end-child-poverty/poverty-in-your-area#northEast
[2] Households Below Average Income: An analysis of the income distribution 1994/95 – 2009/10, DWP 2011. Available at: http://research.dwp.gov.uk/asd/hbai/hbai2010/pdf_files/full_hbai11.pdf
[3] Households Below Average Income, DWP 2011. Available at: http://statistics.dwp.gov.uk/asd/index.php?page=hbai
[4] Health Consequences of Poverty for Children, End Child Poverty, 2008
[5] Ibid
[6] National Pupil Database. 2009/10
[7] Health Consequences of Poverty for Children, End Child Poverty, 2008
[8] Poor pupils prefer hunger to stigma of free meals, Times Educational Supplement, 2011. Accessed at: http://www.tes.co.uk/article.aspx?storycode=6070031
[9] http://www.bbc.co.uk/filmnetwork/films/p005d74f
[10] Opening Doors, Breaking Barriers: A Strategy for Social Mobility, Cabinet Office, 2011
[11] Estimating the costs of child poverty, Joseph Rowntree Foundation, 2008
Glendene pupils brighten up construction site
Press Releases / December 9, 2011 / Comment now
Easington MP Grahame Morris has praised a community initiative by leading support services company Carillion to help local children add a splash of colour to building work around their school.
Working closely with student art teachers Mike Finlay and Nick White, and class teacher Terry Cullen, the children at Glendene School have created some spectacular scenes depicting Easington’s coal mining heritage to brighten up site cabins and hoardings erected as part of a major ‘Building Schools for the Future’ construction project.
Grahame Morris MP with Eric Baker, Headteacher and pupils of Glendene School
Lead contractor Carillion teamed up with its supplier PPG to provide the children with free paint. Hire firm Speedy Elliot was also more than happy with the free makeover for their cabins.
Carillion’s site manager Peter Blacklock explained: “When the site cabins and hoardings arrived the school children thought they looked dull, so we came up with the idea of asking if could liven them up with some artwork. The children have done a really great job to give this construction site a fresh and exciting new look – not just for them but for our guys on site as well. Communities are always at the heart of what we do at Carillion and we are delighted to have been able to help out with this project.”
MP Grahame Morris added: “This is a perfect example of businesses engaging with the local community and working in partnership with them to make a positive and lasting difference. It’s also great to see the creativity on show here by the special and talented children at Glendene. The fact they have chosen to celebrate the region’s mining heritage shows just how strong the community spirit is here in Easington.”
Glendene Head Teacher, Eric Baker, commented: “This is an excellent example of how communities can work together. The Children thoroughly enjoyed the experience and we are grateful to our building partners for funding this initiative.”
Ends
Notes to editors:
Glendene School and Community Arts College is a Special School for children and young people aged 2-19 years, with a range of Special Educational Needs. The school is also a Visual Arts College, working to bring arts projects into the wider community. The school is located on Crawlaw Road in Easington Colliery, County Durham.
MP calls for Government action against legal loan sharking as new data shows 3.5 Million at risk
Press Releases / December 8, 2011 / Comment now
The Office of Fair Trading is launching an investigation into the high cost credit payday loan market where interest rates can reach 5,000 per cent.
New figures released from R3, the insolvency trade body, show that nearly four million Britons were expecting to need a payday loan to make ends meet in the next six months.
Grahame Morris MP is now calling on the Government to take action to tackle the threat posed by high-cost credit providers to indebted families.
Grahame Morris speaking after the release of the figures said:
“These figures show millions of families across the UK are suffering financially as rising costs of living, wage freezes and unemployment hit household incomes. It is worrying that people are putting themselves at risk of spirraling debts as they are forced to turn to payday loans which have interest rates running into the thousands of per cent interest.
“Nearly four million people – the same as the entire adult population of Scotland - are involved; it is simply unacceptable that the Government is refusing to act. I urge all residents in East Durham to sign the e-petition calling for caps on the costs of credit now to tackle these problems”
“It is important that the public are aware of the low cost credit alternatives to high street pay day loans. County Durham Credit Union offers a range of credit services available to residents in County Durham at a faction of the cost of payday lenders – I am delighted that they have extended their services into East Durham”
East Durham Credit Union is introducing at least 14 new collection points, and aim to increase Credit Union membership in East Durham by 600.
Currently there are 4 collection points all in the South of the former Easington District area. East Durham Area Action Partnership has secured funding for a dedicated Development Officer who will be based in East Durham Trust and East Durham Homes.
East Durham Credit Union, who have already signed up 250 members, including local MP Grahame Morris, who is calling on the Government to take action.
“Without regulation these companies are being given carte blanche to rip people off with excessive interest rates and loose credit checks. Labour MPs have been campaigning on this for over a year now and this research shows why they were right to be worried.
“32% of payday loan customers say they had to take out a payday loan to pay off another loan and 48% say the loan made their financial position worse. With half of families now struggling to make it to payday and a wealth of evidence about the problems they cause, how much worse does it have to get before the Government steps in?
“For the sake of families in East Durham the Prime Minister should see sense and introduce caps on the costs of credit like they have in other countries.”
The Office of Fair Trading spokesman said: “We will be undertaking a review of business compliance with the irresponsible lending guidance shortly.”
“The OFT seeks to ensure that consumer credit licences are given to and retained only by those who are fit to hold them, including payday lenders.”
ENDS
- Grahame Morris MP was referring to new data published by R3, the insolvency trade body on Wednesday 7 December 2012. This shows that 3.5 million adults considering taking a payday loan over the next six months in response to their financial difficulties. This come against a background of increased pessimism as only 20% of adults in Great Britain believe their personal financial situation will improve in the next six months.
- Of those who took part in the research who have a payday loan 60% regret taking out the loan, 48% say it has made their financial situation worse, 40% say that having the payday loan makes it harder to pay other bills, 32% say that they took out a payday loan but couldn’t pay it off so had to get another one.
- For further details on this research please contact Will Black, Communications Manager at R3 on 020 7566 4215 / 07917 422 485 or will.black@r3.org.uk
- If the e-petition receives 100,000 signatures it will go before the Backbench Business Committee to be considered for a debate in the House of Commons. The petition can be found here: http://epetitions.direct.gov.uk/petitions/20219.
- The petition has been launched in the wake of new research from the Debt Advice Foundation which shows that 41% of those struggling with debt claim their financial problems are the result of high-interest or payday lending. One in four people who take out a payday loan need the money to buy food or essentials for their household, with 44% using them to pay off other debts. In addition, Citizens Advice have recorded a fourfold increase in the numbers of people getting into debt problems as a result of borrowing from payday lenders in the space of just two years.
- In 2009, the payday lending industry was worth over £1.2bn, more than three and a half times larger than in 2006[2]. One in ten UK payday customers have incomes of less than £11,100 per year.[3]
- Labour MP Stella Creasy proposed legislation to introduce a cap on the costs of credit in February 2011 and again in June 2011 which the Government opposed. The
- Stella Creasy is the Labour and Co-Operative MP for Walthamstow. She has been campaigning to toughen up regulation of the high-cost credit sector for over a year and is backing an e-petition calling for the Government to End Legal Loan sharking in time for Christmas 2011.
- For more information about this and the wider campaign on high-cost credit, contact Mark in her office on markharrison@workingforwalthamstow.org.uk on 020 7219 6980 or visit her website www.workingforwalthamstow.org.uk.
Strikes were no ‘damp squib’ – Strikers show government they won’t pay for the failure of others
Blog / December 6, 2011 / Comment now
George Osborne’s first eighteen months as Chancellor has been a failure for the economy. The worsening economic situation is predominantly being faced by women, young people, those in the poorer English regions predominantly in the north, the low paid and public sector workers. Child poverty is set to soar; changes to tax and spend policies will hit women far harder than men and the cull of public sector jobs will again see a greater proportion of women out of work.
Politics is about making choices and yet the rhetoric of the Chancellor has been that he has none: ‘the deficit demands these swinging cuts’. However this line is now wearing thin in the face of increasing evidence that his policies have failed not just the poor and vulnerable in society, but the British economy. His cuts have reduced growth and actually increased borrowing. The Chancellor will fail to meet his borrowing targets for 2015-16 and his forecast of eliminating the structural deficit over the life of this parliament has slipped back three years in just eight months. Even with the austerity measures, public spending cuts and tax hikes, borrowing is set to increase dramatically by £158 billion over the next five years. His plan is certainly hurting, but it isn’t working.
This unfairness is certainly felt first and worst in the public sector. Those workers who gave up a day’s pay to go out on strike were adding their voice to the chorus of people who recognise the unfairness of Coalition policies. Public sector workers that do demanding and valued jobs caring for the sick, elderly, cleaning our streets & teaching our children have reacted against an assault by this government on their pensions. The government used a standard tactic of first offering an entirely unpalatable proposal for reform, only to offer a new tweaked proposal which was just as unpalatable.
The truth is that it is the behaviour of Ministers which led to the collapse in negotiations, with David Cameron allegedly bragging that the unions had walked straight into his trap. The Coalition’s latest proposal would see public sector workers lose more pay in the guise of pension contributions only for that money to go straight to the Treasury to reduce the deficit. It is nothing more than an unfair tax on public sector employees to pay for an economic crisis they had nothing to do with. It is also in direct contrast to the failure of the Chancellor to take any meaningful action against the banks which should have seen bankers contribute far more to pay off a deficit of their own making. The unfairness of the 3.2 percentage points increase is that is has nothing to do with the sustainability of public sector pensions which are set to fall from around 2% of GDP to 1.4% of GDP over the next forty years.
Most reasonable people agree that there are genuine grievances felt by those working in the public sector and yet some still believe that strike action on 30th November was wrong. Indeed some in the Labour Party establishment refused to offer support to striking public sector workers. Over fifty trade unions balloted for strike action, with seven not affiliated to the TUC and the majority not being affiliated to the Labour Party. This is clear evidence, if it is needed, that these strikes were not political and were certainly not party political – a situation which should have made it easier for the Labour leadership to offer its support to these workers.
The vast majority of those voting to strike would have done so for the first time in their lives. Indeed, this was the biggest day of action in a generation and for that reason alone it required the support of people that until recently would have found the concept of striking alien. That is also why the accusations levelled by government Ministers that the two million who had withdrawn their labour were inconveniencing parents and frustrating working people were so duplicitous, because it was exactly those parents and ordinary workers that were taking action.
One of the most disturbing aspects of this Coalition’s behaviour has been its willingness to create a divide in this country between workers in the public sector and the private sector, propagating a myth that wealth created in the private sector is simply squandered in the public sector. Nothing could be further from the truth when the facts show the public sector taking the pain for a crash created by the private sector. We should value our wealth creators and small medium sized businesses but recognise that without the people who teach our children, care for us in old age, provide our healthcare and clean our streets wealth would mean little for the majority of us. Quite simply good quality properly resourced public services are what make a civilised society for ordinary people.
It is the behaviour of this Coalition government and its reckless austerity policies that have already added £46 billion to borrowing, which made strike action unavoidable. At the same time Ministers said that negotiations were ongoing they also said that they had made their final offer. Such a negotiating position does the British people a dis-service. The strikes were never intended to ‘bring Britain to a halt’ and they were certainly not a ‘damp squib’ – a comment the PM has since backtracked on. Instead they showed the willingness of ordinary people to take strike action. In doing so strikers showed their resolve and no doubt will do again should government not negotiate a fair outcome for the future of public sector pensions.
Politics is about making choices. As the old saying goes: Nothing in life is certain except death and taxes. The rest lies in the hands of the Chancellor.
