STUDENTS who unite to threaten wholesale default on their loans are among the more radical possibilities set out in a new report that explores debt in the UK.
“Forgive Us Our Debts”: Lending and borrowing as if relationships matter, by Theos and the St Paul’s Institute, also suggests that the UK consider moving towards a system in which “those most able to pay the most interest do so, while those least able to pay, pay the least” — the opposite of the current situation.
In their exploration of “one of the most pressing and complex issues of our age”, the researchers, Nathan Mladin and Barbara Ridpath, argue that debt has reached “unprecedented levels” in the UK and around the world. “There are indications that personal debt levels are reaching unsustainable levels.”
After a detailed account of a Christian understanding of debt throughout history, which notes that a prohibition on charging interest was maintained up to the modern period, it concludes that “debt and interest are neither amoral nor immoral, but morally ambivalent. Debt should be judged on the purpose for which it is incurred, the terms of the debt — whether these are clearly presented, fair and freely accepted.”
While arguing that a moral dimension is lacking from the contemporary debate and that the Bible can help people to discern “morally rich principles”, it cautions against deriving an ethics of debt from Bible passages that would address business and national debt, noting the “broader economic, political and cultural differences between 1st-century Palestine and contemporary life in the UK”.
Not all existing debts should be forgiven wholesale, it says: this would be “as impractical as it is unethical”. The Christian ideal is “not necessarily a completely debt-free society, but one in which lending occurs in relationships of mutuality and gift exchange”.
Many of the recommendations focus on the need for restoring “reciprocal relations” between borrowers and lenders. Market traders should, the report suggests, always consider “whether they would be willing to sell a product to a family member: the ‘Granny test’”. Financial education — a field championed by the Archbishop of Canterbury — is emphasised; and it is suggested that regular forums should be held “to discuss whether what the government commits in terms of debt is at sustainable levels and accomplishing what it was intended to do”.
At the extreme end, it suggests, “debtors could unite, such as those who owe student debt, to threaten wholesale default, in order to force a reconsideration of student debt terms.”
The report notes that the British economy is increasingly reliant on consumer debt, subject to extremely low levels of investment, and that 16 million British people have less than £100 in savings. As of 2017, outstanding personal debt, including home mortgages, consumer credit, and credit-card debts, was equivalent to around 90 per cent of the country’s GDP.
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