All Campaigns subcategories:
Welfare rights keywords:
Labour ministers' unsocial fund
NOT SATISFIED with attacking the benefits entitlements of the unemployed in the recent Welfare Reform Bill, the government proposed charging up to 27% interest on emergency state loans to claimants.
Many elderly, disabled and unemployed people apply for emergency loans to replace a broken fridge or cooker, etc. These loans are then repaid from benefit payments. Prior to 1988 claimants could qualify for one-off, non-repayable grants.
Even an interest-free loan is a big financial undertaking from people struggling to survive on a pittance.
However, the government's consultation paper proposed outsourcing the social fund to credit unions: "Interest would be charged in return for these services but this would be at affordable rates compared to those charged by commercial lenders in the same market. We propose to set it at the maximum charged by credit unions of 2% per month (26.8% apr)."
Yet Gordon Brown has the hypocritical cheek to berate the banks for not passing on to customers the most recent reduction in lending rates!
This latest Labour bludgeon to strike the poorest and most vulnerable in society was the brainchild of work and pensions secretary James Purnell. Readers will recall that Purnell, in an earlier, crassly insensitive comment, lectured the unemployed 'not to use the economic recession as an excuse for not finding work'. Advice no doubt appreciated by the 75,000 people who lost their jobs in November!
The government, faced with a barrage of criticism over this outrageous proposal, has subsequently denied wanting to charge interest on social fund loans.
However, Kitty Ussher, a work and pensions minister, hasn't withdrawn the proposal of privatising the social fund and allowing credit unions to administer loans from the fund. But why would a credit union be prepared to offer interest free loans?
Like many of Labour's 'kite flying' proposals, the suspicion is that we haven't seen the last of this proposal.
Phone our national office on 020 8988 8777
Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206
Regional Socialist Party organisers:
Eastern: 079 8202 1969
East Mids: 077 3797 8057
London: 07748 534 891
North East: 078 4114 4890
North West 079 5437 6096
South West: 077 5979 6478
Southern: 078 3368 1910
Wales: 079 3539 1947
West Mids: 024 7655 5620
Yorkshire: 077 0671 0041