IT WAS the perfect story. Newsdesks around the country, weary of yet another tale of a skateboarding cat, or Elvis discovered in a Chipstable chip shop, rejoiced at a truly heaven-sent gift: the Church and money.
The broadsheets reported that England’s senior cleric, the Archbishop of Canterbury, had severely reproached the nation’s unscrupulous payday lenders, declaring his determination to compete against them and their usurious interest rates (News, 2 August 2013). The tabloids got straight to the point: “Welby’s war on Wonga”.
The story broke on 25 July 2013, at the start of the silly news season. There was still the whole of August to worry about; Elvis and Tiddles were put on hold.
A few days later, there was a blip in the narrative when it was discovered that the Church Commissioners held an investment worth more than £1 million in one of Wonga’s main financial backers.
The C of E, however, continued to receive much positive media coverage for its campaign to help millions of people caught in the perfect storm of low wages, poverty, unemployment, declining benefits, and mountainous interest rates from payday lenders.
There were harrowing reports of clergy and laity helping distressed parents in parishes, going hungry to feed their children while confronting door-stepping bailiffs, or pleading with benefit staff for a £30 grant to repair their ancient washing machine. The Archbishop’s intervention had unveiled a nationwide tale of human misery, groaning under a payday-loan industry that turned over more than £1 billion a year. It was far from a silly-season story. This was life and death.
EIGHT years on, and since the pandemic (worsening the financial situation of more than one third of the nation, 38 per cent, according to the Financial Conduct Authority), what have been the long-term results of the C of E’s war on payday lending?
Despite Wonga’s collapse into administration in 2018 (News, 7 September 2018), payday-loan companies have not gone away, and are easy to find online, although there has been industry reform (News, 12 February 2016). Citizens Advice explains that lenders must publish their deals on at least one price-comparison website, which must be regulated by the Financial Conduct Authority.
From 2 January 2015, an interest cap of 0.8 per cent per day was introduced, and clients should not have to pay back more than twice the amount borrowed. Also since 2015, 30-day loans — the most popular type — should cost no more more than £24 in fees and charges for every £100 borrowed. Default fees are capped at £15.
In 2016, the Task Force that Archbishop Welby set up with the aim of creating a fairer and more just financial system gave birth to the Just Finance Foundation. Its aims include equipping future generations to manage their money wisely, building people’s motivation and access to fair financial services, and developing fair financial systems in local communities. It remains a small organisation, with just five employees supported mainly by trusts and foundations.
The group’s programme director, Sarah Wallace, said that, between April 2020 and January this year, more than 1500 volunteers (one third from parishes) had undergone debt training. “The pandemic saw us move more online,” she explains.
“We have a Covid Cash Course, which is free and upskills churches, charities, and community leaders to help people recover from money issues that have arisen due to Covid. It covers topics such as Universal Credit, budgeting, money strategies, and help with bills.
“Financial exclusion has become a major social problem, a symptom and cause of underemployment, poor health, and homelessness. Our JFF Communities operate through local networks in the Black Country, Liverpool, and Tyne to Tweed, promoting and supporting credit unions, improving access to free debt advice, financial-capability training, and appropriate financial services.”
Ms Wallace says that there is an “urgent need” for banking reform to give many of the poorest access to an account, without which, for example, welfare benefits cannot be paid. Interest-free loans are also in her sights, as some credit unions can charge interest of up to 42 per cent, and do not automatically accept all applications.
“Society needs a safety net, but work is also good for people. It provides purpose,” she says. “But it’s about good work and a decent wage. I know some people benefit from the gig economy, but, overall, it’s not good, and I’d like to see it cancelled.
“There are different views on the minimum wage and living wage. It is helpful to set a minimum, but I am not an economist, and I know there is an argument that higher wages can push up inflation.”
The parish, she says, is central to helping those struggling to make it to the end of the week, let alone each month. “I have heard heart-breaking stories of people, at the end of their rope, knocking on a church door because it was the only place they could turn. The Bishops can give a voice to the voiceless. They can lead the debate.”
KEVIN PEACOCK and Julie Anne Wanless are used to those kind of knocks at the door of St Andrew’s, Clubmoor, in Liverpool. For the past 18 years, it has provided debt-advice clinics and money management across the city and beyond.
“Payday lending has got worse over the years,” Mrs Wanless, the St Andrew’s Money Team Co-ordinator, says.
“The underlying causes are low pay and low income. The average income in Clubmoor is £20,000 — around £10,000 less than elsewhere. People used to borrow money for consumer debt; now it’s for priority debt. They borrow money to repair the washing machine, or for a utility bill, and the interest charged keeps them in harness for years.
“It was amazing when the Archbishop spoke out against Wonga. One of the benefits was [that] he removed the shame and fear of debt. People kept it a secret, not seeking help from agencies that could help them, but shared their problems with relatives.”
Mr Peacock feels it is time for the Bishops to “give the issue another push”.
“There needs to be a culture change. The Church is in an ideal position to do this because it has a platform. People listened to Archbishop Welby when he spoke out. He has respect.
“We need to maintain the focus on the most vulnerable. We may be approaching the end of the pandemic; so things are going to get serious. During the last 18 months, lenders held back from contacting clients, but that is starting again. People are getting letters and visits and phone calls demanding payments that have been put on hold.”
Rochester diocese hit the headlines when it launched a campaign against loan sharks. The community-engagement adviser, Keith Berry, said that several other initiatives had since been added to the diocese’s debt armoury, among them the “Jesus Money Cards”, a set of questions across four topic areas — spend, give, save, and borrow — that the diocese plans to roll out to parishes next year.
Crosslight Advice is another of its “weapons”: an independent, community-focused charity working to alleviate poverty caused by problem debt and lack of financial capability, and offering a budgeting course across south London, Sevenoaks, Tonbridge, and Tunbridge Wells. Mr Berry describes it as “simple and effective”, with the offer of one-to-one support at the end if needed.
James Henderson, a senior development worker with Transforming Communities Together, reckons that there has been a mixed response to Archbishop Welby’s campaign. “Some parishes jumped straight in, and set up programmes and outreaches, while others were paralysed, wondering how to get started,” he says.
“It is in our DNA as a Church to fight against injustice wherever we see it. There is real power in unity. The answer lies in the community — all types of groups, not just parishes — working together.
“I am a big fan of movements. We have seen how BLM and Extinction Rebellion have brought issues of injustice to the fore, showing how it is the poorest who are worse affected. It is up to individual parishes to assess how they respond. As long as a movement is in line with gospel values, I am in favour.”
Not all initiatives have stood the test of time. All Saints’, Murston, in Sittingbourne, Kent, picked up the challenge eight years ago, raising £50,000 in just six months to fund the local credit union. Phil Bromwick, now in his seventies, remembers: “We even ran a money programme for pupils aged nine and above at the local school.
“We linked with KentSavers Credit Union, and set up several foodbanks. There was a thriving drop-in centre at the church, a hub where anyone could walk in and get debt advice, along with a slice of cake.
“It was amazing to see people’s lives transformed. There was an amazing change in the community, one of the poorest in Kent.
“However, as is often the case, it was left to a handful of people to run the operation, and, as they died out or moved away, things began to slow down.”
Mr Bromwick says that, today, none of the services remain. “It’s all stopped. It is good that CAP operate in Sittingbourne, and the Citizens Advice is active; but it is such a shame all the initiatives that grew up from the Archbishop’s campaign have since folded, even though the need has increased over the years.”
Archbishop Welby said: “The Church of England runs 33,000 social projects, including debt and financial-advice centres, across the country. We do not do this to be nice — we do this because Jesus calls us to care for those who are vulnerable and uplift those who are struggling.
“The Church has been a pioneer of alternative methods of lending through credit unions and other innovative, people-centred models; Christians have campaigned for fairer financial systems; and Christian charities work to educate and empower people facing real financial problems.
“The Bible speaks powerfully about debt slavery, money, and fairness. I am determined that we will continue answering God’s call to respond with compassion and courage to the injustices of usury and poverty.”
James Hastings is a journalist and author.
These are challenging times, says Hector Sants
THE Archbishop’s Task Group on Responsible Credit and Savings was set up at the beginning of 2014 — seven years ago. It ran for three years, until the end of 2016, when the transition was made to the Just Finance Foundation, which was established in January 2017.
The Task Group was set up at the request of the Archbishop of Canterbury to harness the national and grass-roots resources of the Church of England in support of credit unions and other forms of responsible credit and savings. The overall vision was to put the Church at the heart of the movement for a fairer financial system.
The Task Group developed a number of initiatives: It worked to encourage the church network to work with local community organisations and church congregations to build up capacity in their local credit unions.
Crucially, it also identified the importance of the Church’s supporting a fairer financial system through its presence in the educational system. The programme established Lifesavers: a unique savings club and financial-education programme for primary schools. This initiative seeks to address the lack of financial education in the system for primary-age children.
Additionally, the other key feature of the Task Group was the support that it provided to those advocating system-wide changes, particularly in regulation, which led to significant restructuring and improvement of the provision of credit to vulnerable individuals. Evidence of the successful impact of this work is the disappearance of many of the high-cost-credit providers referred to in the Archbishop’s original comments.
These initiatives have since been taken forward by the Just Finance Foundation — an independent charity of which the Archbishop is the patron — that seeks to create a fairer financial system, focused on serving the whole community.
The Just Finance Foundation works not just with the church community, through its links with the Church Urban Fund, but also directly with schools and other local community organisations.
Lifesavers continues as a successful and expanding programme that has been supplemented more recently by online education tools such as Milo’s Money. The work with the church community, in partnership with the Church Urban Fund, also continues, and was particularly relevant during the Covid crisis.
There is, however, always more to do, and the Just Finance Foundation continues to seek funding to increase capacity and capability.
It is clear, however, that the work of the original Task Group, the Just Finance Foundation, and the establishment of a credit union for church employees has significantly raised the profile of the importance of a fairer financial system to the underlying health of communities. It has also raised the profile of this issue with clergy and the wider church community.
The Just Finance Foundation, however, recognises that in these challenging times — and with the resultant pressure on church resources — keeping the relevance of the fairer-finance agenda at the front of church thinking will require continuous engagement and the support of the leaders of the church community.
Sir Hector Sants was the head of the Archbishop’s Task Group on Responsible Credit and Savings 2014-16, and is a trustee of the Fair Finance Foundation