[Queen Elizabeth is celebrating her Platinum Jubilee of 70 years
on the throne. Even before cost of living crisis, the poor owed the
government – or, the Crown – £16bn. Why not just write it off?]
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A REAL JUBILEE: A MASS WRITE-OFF OF DEBTS  
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Caroline Molloy
June 2, 2022
Open Democracy
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_ Queen Elizabeth is celebrating her Platinum Jubilee of 70 years on
the throne. Even before cost of living crisis, the poor owed the
government – or, the Crown – £16bn. Why not just write it off? _

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As the Queen’s Chaplain herself reminded us on Radio 4’s
‘Thought for the Day’ this week, the word ‘jubilee’ isn’t
just another term for an anniversary, monarchical or otherwise, nor a
byword for bunting.

The biblical ‘jubilee’ was the blast of a trumpet, every 50 years,
that heralded the write-off of everyone’s debts.

This “radical and counter-cultural” measure, the Venerable Liz
Adekunle told listeners, brought “reconciliation” and a “clean
slate”. She urged us to ensure “that amidst all the partying”,
we “get a chance to remember the original meaning of jubilee”.

But what if we did more than just remember?

As American anthropologist David Graeber set out in his magisterial
‘Debt: The First 5000 Years’, most pre-capitalist societies
practised periodic mass debt write-offs, as a way of preventing a
level of indebtedness and inequality that damaged society.

“Forgive us our debts, as we forgive those who debt against us,”
went the Lord’s Prayer, at least until proto-capitalists got their
hands on it in the 16th century
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and, particularly in England, changed ‘debts’ to ‘trespasses’
and later to ‘sins’.

While the biblical codes made clear that it was personal, not
business, debt that needed to be written off, we now live in a strange
inversion. As Joe Cox, of Debt Justice (formerly the Jubilee Debt
Campaign), told me: “Billionaires and businesses use insolvency and
a variety of other practices to get huge amounts of debt written off,
and it’s ordinary people who are the ones that believe and are told
that they should pay their debts”.

MOUNTING DEBTS – and stress

Even before the pandemic and the cost of living crisis, much of the
UK’s household debt was already simply unpayable, with more than
420,000 people in England considering suicide while in problem debt
[[link removed]] each year,
and 100,000 actually attempting it.

The most distressing debts of all, according to Christians Against
Poverty (CAP), are those owed to the government, for things like
council tax arrears, benefit advances and sanctions and tax credit
overpayments – many of them very old. The charity found
[[link removed]] 93%
of its clients with these kinds of debts had sleepless nights, 74%
were scared to open the door, and 49% were scared to leave the house.

The amount owed in such debts has climbed steadily in the decade since
the financial crisis – reaching more than £16bn, according to
a 2020 parliamentary report
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More recent figures show there are £4.4bn of council tax arrears
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of benefit ‘overpayments’
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and £5.2bn of tax credit overpayments
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be repaid.

These debts – along with other ‘priority debts’, such as rent
and energy debts – can be deducted straight from benefits, taking up
to a quarter of an already inadequate payment for reasons that are
often unclear to the person receiving it, or from their low wages.

It’s no surprise that debts owed to public bodies now make
up around 40% of the Citizens Advice Bureau’s debt caseload
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up from 20% a decade ago.

CAP highlights the case of Beth, a care worker with £21,000 of debt,
including £7,200 from an Income Support overpayment 20 years ago. The
age of the debt meant that when she was ordered to pay, she had no
idea whether it was correct, or how to appeal. Such tales are not
uncommon. The Child Poverty Action Group has calculated that nearly
two million children live in households where debt repayments are
being taken from Universal Credit
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tax credit muddles
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more recent benefit advances, and similar.

Even the right-wing think tank, the Centre for Social Justice, has
suggested writing off tax credit debts that are more than three years
old, arguing that trying to claw it back “isn’t efficient or
effective
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But in the past few years, the government has done the
opposite: launching a drive
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trawl through records dating back to 2003.

Two-thirds (64%) of people with government-owed debts live below the
poverty line, according to CAP, meaning they are significantly poorer
than those who approach the charity for help only with consumer credit
debt.

These are debts born overwhelmingly by the poorest, and owed to the
government – in other words, to the Crown. Why not just write it all
off?

“Looking at debt to government would be a very good way to go just
to relieve some of that pressure on lower-income households,” Cox
said.

The government – the Crown – could lead the way in doing so from
its own departments, and also use the central purse to reimburse local
authorities owed money for council tax, rent and social care arrears
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IMMISERATING A WHOLE CLASS

Those against debt write-off will cry ‘moral hazard’ and claim
‘forgiving us our debts’ would simply encourage future reckless
behaviour, with people sliding back into debt.

But those behind on the payment of daily essentials aren’t failing
morally, and they aren’t ‘sinners’. They’ve been let down by
chaotic systems that generated overpayments through no fault of their
own, or by Universal Credit, with its incredibly tight sanctions for
missed appointments, which effectively turn payments into a loan that
has to be repaid.

It’s not greed that’s got these people into debt with the
government – it’s benefits and benefit eligibility that are
deliberately set at levels that are amongst the meanest in the
developed world. This is immiserating a whole class who, even if their
household works all the hours God sends, increasingly
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on in our globalised, post-industrial, low wage, stagnant economy.

The way to avoid a ‘moral hazard’ and stop people sliding back
into debt, post-debt jubilee, is to mend the tattered safety net.

Even before energy bills started to soar last autumn, nearly four
million low-income households were in debt on their bills
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with 1.4 million in council tax arrears, the same number in debt to
their energy provider, and almost a million in rent arrears. This
is triple
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number of households that were behind on payments before the pandemic
took its toll.

Some might claim that returning £16bn or so to the pockets of the
country’s poorest would only stoke inflation – but even the head
of the Bank of England has acknowledged it’s soaring commodity
prices and other supply shocks, not excess money, that
are responsible for 80% of the UK’s inflation overshoot
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If you’re managing but your neighbour is so stressed about debt they
can’t leave the house, are you happy?

The other argument against a modern-day debt jubilee is that of
‘negative solidarity’. This is the claim that it would be unfair
on those who have scrimped to avoid debt, forgoing even the tiniest
treats or going hungry to avoid ever falling behind on essential
bills.

But the principle of the biblical jubilee is that – as the authors
of ‘The Spirit Level’ powerfully showed
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and justice isn’t just an individual matter, but a community one. If
you’re managing but your neighbour is so stressed about debt they
can’t leave the house, are you happy? If you don’t owe anyone
anything, but your high street is boarded up and your kid has lost
their job because no one in your community can spare a couple of quid
for the odd treat, what then?

The residents of Warrington, Wigan, Swansea and Sunderland owe 20% of
their average income in debts – three times more than the residents
of wealthy cities
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Oxford and Cambridge. Much of what is owed isn’t due to the policy
of this government, but the tax credit debacles of previous ones. They
could write it off and call it ‘levelling up’.

If we really want communities to come together and unite, we need to
cancel the debts that weigh so heavily on the very poorest.

Now – wouldn’t _that_ be a good excuse for a street party?

_CAROLINE MOLLOY is openDemocracy's UK health and social affairs
correspondent, a journalist and speaker. She has written extensively
on politics, public services and the welfare state, and has a
particular interest in public services and technology._

 

_openDemocracy is an independent international media platform. We
produce high-quality journalism which challenges power, inspires
change and builds leadership among groups underrepresented in the
media. Headquartered in London, we have team members across four
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* debt
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* debt forgiveness
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* bankruptcy
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* United Kingdom
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* British Monarchy
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