CHURCHES and the charity Church Action on Poverty (CAP) have called for a pandemic-related “debt Jubilee” for the households worst affected by a cut in their income.
The Baptist Union of Great Britain, the Church of Scotland, and the Methodist and United Reformed Churches have united with CAP behind the report Reset the Debt: A fresh start for families in Britain swept into debt by Covid-19.
It estimates that six million people in the UK have been disproportionately affected financially. Almost one in five households needed to borrow money to buy food or essentials in July; and six million people have fallen behind with rent, council tax, and other household bills.
Using results from a Citizens Advice survey of 6015 people between 29 June and 8 July, the report says that, owing to the March-to-July lockdown, 3.4 million adults fell behind on telecoms bills, three million on water bills, 2.8 million on energy bills and council-tax payments, and 1.2 million on rent.
The group is asking the Government to create a Jubilee Fund to provide grants for debt relief, to provide greater security in the winter months. The £5-billion one-off scheme would relieve solely debts accrued during lockdown — particularly rent, council tax, and utilities — in an attempt to stop people from losing their homes.
Church Action on Poverty’s director, Niall Cooper, said: “Over a third of families with children lost income as a result of lockdown. The past few months have been hard enough for all of us, but for those families who have lost income, and been saddled with unpayable debts and possible eviction, the pressure is unbearable. To enable these families to get through the hard months ahead, it is essential that the burden of unpayable Covid-19 debts is lifted.”
Younger, black and minority-ethnic, and disabled workers have been disproportionately affected. The Citizens Advice survey suggests that 31 per cent of under-35s make up 20 per cent of those behind on bills, while over-35s make up eight per cent. Disabled people make up 16 per cent of those struggling, in comparison with seven per cent of others.
A survey of 3972 people between 15 June and 19 July by the charity StepChange, used in the report, suggests that 1.5 million people have had to rely on credit cards to pay bills, while 1.6 million have had to use overdrafts. High-cost credit has been used by almost one million people.
The President of the Methodist Conference, the Revd Richard Teal, said: “This call comes out of what churches have seen in communities throughout the country. We know that, during lockdown, people have focused on keeping themselves and their families safe and fed — and, for many, that meant bills or even some rent had to go unpaid. These families are now facing a crisis, and this is simply not right.
“The fact that Covid-19 debt has disproportionately affected low-income families demands a compassionate and just response. For the benefit of families and wider communities, the aim of this campaign is to bring stability and a more hopeful future for millions of people currently struggling to cover the basics of life. These people cannot be forgotten as we move into what will be a challenging winter ahead.”