Credit Michael Chapman istock

The Equality Trust is one of 80 civil society organisations and academics calling on the government and Chancellor Rishi Sunak for urgent action to support households from falling into debt

Rt Hon Rishi Sunak MP Chancellor of the Exchequer HM Treasury 1 Horse Guards Road London SW1A 2HQ 

Wednesday 1 April 2020 

Dear Chancellor, 

We, the undersigned leaders of civil society organisations, trade unions and community groups, academics, and policy experts call on you to take urgent and immediate action to prevent the COVID-19 pandemic deepening the debt trap faced by millions of low income households, and pushing millions more into problem debt. 

The UK already faced a profound and growing crisis of poverty, destitution and problem indebtedness prior to Covid-19. Over 14 million British citizens, nearly 20% of our entire population, were already in poverty: struggling to afford even basic living essentials like food, water, electricity and rent. Growing numbers have been forced to borrow from high-cost lenders just to put food on the table, and faced spiralling indebtedness as a result. Personal debt was at its highest ever level just prior to the Covid-19 outbreak, with over 9 million people in problem debt. 

We strongly commend the action you have taken within the last week to protect incomes and prevent the pandemic leading to employers laying off workers. We particularly applaud the moves to guarantee wages through the job retention scheme and to uplift Universal Credit and Local Housing Allowance. 

However, many thousands of layoffs have already happened despite the measures announced, with many more expected in the coming weeks. Even with the actions you have announced so far, our social safety net will be severely inadequate to support those who lose their work and incomes because of this crisis, as well as those already out of work or unable to work for health or other reasons, all of whom now face increased living costs because of Covid-19. 

Statutory Sick Pay is at an unliveable rate of £12.50 per day. A decade of real cuts means that other unemployment and social security benefits are similarly not enough to live on, worth less today in real terms than they were in the 1990s. Across the board, from Universal Credit to Carers’ Allowance, our social security provisions are insufficient to meet basic living costs, pushing those who rely on them into poverty, or debt, or both. 

This crisis highlights the wholesale inadequacy of our social safety net and its inability to provide for the welfare of citizens and the nation as a whole at a time of national crisis. It is incumbent on the government to urgently move to provide a liveable income guarantee for all, including the homeless and people with no previous recourse to public funds, removing all punitive sanctions and payment delays. Self-isolation from Covid-19 simply cannot be a privilege only some can afford. 

However, even with further action, these delays and gaps in the Government’s support package mean millions are already facing a dramatic drop in their incomes. Given the existing debt overhang, a more comprehensive household debt write-off will be needed in the post-Covid 

period, to give families and the economy a fresh start. In the meantime, to prevent the further build-up of unfair and unsustainable household debt, we call on the government to: 

1. Freeze repayments on all unsecured debt (including loans, credit cards, and rent- 

to-own finance), with no accrual of interest during the repayment holiday 

Those facing redundancy, loss of wages or other payment difficulties because of Covid-19 must be entitled to an immediate freeze on unsecured debt payments, similar to the mortgage holiday extended to homeowners, with no interest accumulated during the repayment holiday and no impairment of credit records. 

2. Freeze utility, rent and council tax payments, with no build-up of arrears 

More help must also be made available to impacted households in respect of council tax, rent and utility bills for those who need it, to ensure there is no build-up of arrears on these accounts. Central government should: 

• Fund local authorities to provide 100% Council Tax Support to impacted households; 

• Require landlords accessing mortgage holidays to pass that holiday onto tenants; 

• Fund local authorities to make additional discretionary housing payments where rents are still required and cannot be paid; 

• Provide help with gas and electricity costs by, for example, by broadening the scope and assistance provided through the Warm Home Discount Scheme. 

3. Write-off council tax and social security debts 

We welcome your move in the Budget to ease the burden on households of unfair council tax debt. In the face of Covid-19, it is essential to go further and provide breathing space to households under pressure by writing off the council tax debt and debt for overpayments of child benefit, working tax credit and Universal Credit: debts which, in a vast majority of cases, households have not intended to incur and which thousands are struggling to repay. Again, there should be full reimbursement to local councils by the government for resulting revenue losses. 

4. Suspend all debt collection and enforcement activity with immediate effect 

Broadening the Government’s pledge to protect renters by suspending all evictions, we call on the Government to suspend all collection activity on household debts and all enforcement activity by bailiffs, enforcement agents, and others. 

Without this package of measures, the economic recovery from Covid-19 will be severely suppressed and millions more households will be pushed into the poverty, destitution and indignity of the growing household debt trap. 

We call on you urgently to act. 

Yours Sincerely, 

Dr. Alexander Guschanski – Lecturer in Economics, University of Greenwich 

Dr Andreas Antoniades – Senior Lecturer in Global Political Economy, University of Sussex 

Andrew Jackson – Research Fellow, Centre for the Understanding of Sustainable Prosperity, University of Surrey 

Andrew Denis – Fellow Emeritus, Department of Economics, City, University of London 

Ann Pettifor – Director, Policy Research in Macroeconomics 

Anna Laycock – Chief Executive Officer, Finance Innovation Lab 

Anna Vickerstaff – UK Team Leader, 

Anne Funnemark – Campaign Director, Jubilee Scotland 

Asad Rehman – Executive Director, War on Want 

Beth Redmond – Organiser, Tenants Union UK 

Dr Bruno Bonizzi – Senior Lecturer in Finance, University of Hertfordshire 

Caroline Molloy – Editor, Open Democracy UK 

Dr Christopher Harker – Associate Professor, Institute for Global Prosperity, University College London 

Dan Wilson Craw – Director, Generation Rent 

Dr David Harvie – Associate Professor of Finance and Political Economy, University of Leicester 

Damon Gibbons – Director, Centre for Responsible Credit 

Dr Daniel Ozarow, Chair – Jubilee Debt Campaign Academic Advisory Network 

Debbie Webster – Manager, St Anns Advice Group and the Chase Neighbourhood Centre, Nottingham 

Professor Deborah James – Department of Anthropology, University of Bristol 

Dr Deborah Potts – Emeritus Reader in Human Geography, King’s College London 

Dr Dianna Smith, Lecturer, School of Geography & Environmental Science, University of Southampton 

Fanny Malinen – Director, Research for Action 

Fran Boait – Executive Director, Positive Money 

Dr Hilary Powell – Co-Director, Bank Job / Optimistic Foundation CIC 

Professor Hulya Dagdeviren – Professor of Economic Development, University of Hertfordshire 

Ian Hodson – National President, Bakers’, Food & Allied Workers Union 

Imogen Richmond-Bishop – Coordinator, Right to Food project 

Irene Audain MBE – Chief Executive Scottish Out of School Care Network 

Isaac Rose – Coordinator, Greater Manchester Housing Action 

Jamie Burton – Chair, Just Fair 

Professor Jan Toporowski – Department of Economics, SOAS University of London 

Dr Jason Hickel – FRSA & Senior Lecturer, Goldsmiths, University of London 

Dr Jeff Powell – Senior Lecturer in Economics, Faculty of Business, University of Greenwich 

Dr Jo Michell – Associate Professor of Economics, University of West England 

Joel Benjamin – Debt Resistance UK 

Professor John Holmwood – School of Sociology and Social Policy, University of Nottingham 

Joseph Howes – Chief Executive Officer, Buttle UK – For Children and Young People 

Dr Joseph Spooner – Associate Professor, Department of Law, London School of Economics 

Dr Johnna Montgomerie – Head of the Department of European & International Studies & Reader in International Political Economy, Kings College London 

Judith Moran – Director, Quaker Social Action 

Dr Kate Bayliss – Senior Research Fellow, Centre for Development Policy and Research (CDPR), School of Oriental and African Studies 

Kevin Courtney – Joint General Secretary, National Education Union 

Professor Laura Bear – Head of Anthropology, London School of Economics 

Laura Payne – Project Manager, 4in10: London’s Child Poverty Network 

Laurie Macfarlane – Fellow, Institute for Innovation and Public Purpose, University College London 

Luke Hildyard – Director, High Pay Centre 

Maia Kelly, Coordinator, Leeds Tidal 

Manuel Cortes – General Secretary of the Transport Salaried Staffs’ Association 

Martin Charlesworth – Chief Executive, Jubilee+ 

Dr Mary Bousted – Joint General Secretary, National Education Union 

Mathew Lawrence – Director, Common Wealth 

Miatta Fahnbulleh – Chief Executive, New Economics Foundation 

Michael Deas – Coordinator, London Renters Union 

Neal Lawson – Executive Director, Compass 

Dr Neil Lancastle – Senior Lecturer, Leicester Castle Business School, De Montfort University 

Neil McInroy – Chief Executive, Centre for Local Economic Strategies 

Nick Dearden – Director, Global Justice Now 

Professor Ozlem Onaran – Director of Greenwich Political Economy Research Centre, University of Greenwich 

Paddy Lillis – General Secretary, Union of Shop, Distributive and Allied Workers 

Paul Parker – Recording Clerk, Quakers in Britain 

Dr Robert Biel – Associate Professor, Development Planning Unit, University College London 

Dr Robert Calvert Jump – Research Fellow in Political Economy, University of Greenwich 

Robert Palmer – Executive Director, Tax Justice UK 

Professor Roberto Veneziani – School of Economics and Finance, Queen Mary University of London 

Ronnie Draper – General Secretary, Bakers’ Food & Allied Workers’ Union 

Dr Ryan Davey – Social anthropologist, University of Bristol 

Sabine Goodwin – Coordinator, Independent Food Aid Network 

Samira Johnson – Co-ordinator, Unfair Debt Group 

Sara Williams – Debt Camel 

Sarah-Jayne Clifton – Director, Jubilee Debt Campaign 

Dr Shaun French – Associate Professor of Economic Geography, University of Nottingham, and Nottingham Financial Resilience Partnership 

Dr Simon Mair – Research Fellow, Centre for the Understanding of Sustainable Prosperity, University of Surrey 

Professor Steve Keen – Honorary Professor of Economics, UCL & ISRS Distinguished Research Fellow 

Stuart Melvin – Co-Founder, Workforce Movement & the Coronavirus Support Group for Workers 

Professor Terrence McDonough – Emeritus Professor of Economics, National University of Ireland Galway 

Tracey Herrington – Project Manager, Thrive Teesside 

Dr Wanda Wyporska – Executive Director, The Equality Trust 

Professor Wendy Olsen – Professor of Socio-Economics & Head of Department of Social Statistics, University of Manchester 

Will Stronge – Director, Autonomy 

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