Tuesday, 30 July 2013

Clear the Temples of Wonga Capitalism!

According to the Bible, 2,000 years ago Jesus Christ entered the temple courts to find them overrun by money-changers, fashioned himself a whip, overturned their tables, scattered their coins and drove them out.

And he sayeth, "all of ye but Wonga are to be cast out..."
Two millennia on, Justin Welby, the Anglican Archbishop of Canterbury - and therefore one of the men claiming to represent Christ on earth - entered the debate about today's moneylenders, denounced Pay Day Loan giant Wonga - only to hastily retreat days later when it emerged his own Church of England has huge investments in Wonga! 

Archbishop- caught with the Wonga...
Rather than lash out JC-style with verbal whips, JW admitted to being "irritated" and "embarrassed" at the revelations of having such dodgy investments, and then heaped praise on Wonga chief executive Errol Damolin as "a very intelligent man, with a very professionally managed company", feebly mumbling "there are plenty of others much worse".

Listening to their flock
The Christian churches - whichever wing - are among the most enduring institutions in human history. One critical factor is their ability to tack and weave in response to the winds of change in social opinion, adapting just enough to hold onto their followers.
The Archbishop's mother was Winston Churchill's personal assistant. He is related to the 1950's Tory leader Rab Butler. He was Eton and Cambridge educated; went on to become an oil industry executive, and in 2008 defended disgraced bankers from being 'named and shamed'. 
But as he surveys the public outrage at the scourge of Pay Day Loan sharks, he tries to reflect some of that fury amongst his flock, pledging to "compete Wonga out of business" by promoting and assisting the growth of Credit Unions. 

Even the Tory-led Westminster Coalition are trying to perform the same, deceitful balancing act. They have pledged £35m in funds to Credit Unions, but rejected calls for a cap on the interest rates charged by the booming Pay Day Lenders like Wonga - whose 'representative' annual interest rate (APR) is a mind-boggling 5,853 per cent!!

This £35m is welcomed by the 400 local Credit Unions, who are currently going bust at a record rate and unable to match the escalating demand for modest loans off working class people. But it is entirely dwarfed by the £2,000m Pay Day Loan industry; by sixty times over, in fact.

Loan Shark Cancer
Loan sharks are a cancer at the heart of Britain's low wage economy. Pay Day loans are the product of a poisonous cocktail of poverty pay, mounting inflation on daily essentials like food and rent, and the failure of the High St banks to offer credit, let alone affordable credit, to the working class majority.

Last January, Which? magazine found that over half the population had used credit cards, store cards and Pay Day loans to pay for Christmas - borrowing on average over £300.

1.75 million adults in the UK are denied bank accounts. Another 9 million have accounts that deny them any credit. And those granted overdraft facilities are charged exorbitant daily rates for using them.
When the rent is due, and shopping for food unavoidable, but it's still a week to go to pay day, it's dangerously tempting to reply to the deluge of seductive emails and adverts from Wonga,Payday Pig and the whole array of offers of magic 'solutions'.

Recent surveys show that young workers aged 18-34 are far more prone to take out Pay Day Loans - because they generally suffer the lowest pay, often in the most insecure jobs. A horrifying one in six surveyed in that age bracket plan to incur such crucifying interest charges over the next 6 months.

When you borrow £100 off Wonga to buy food, you typically pay back £137 a month later - or roll over the debt, then take out more loans to pay it off, sliding into the abyss of mounting indebtedness.

Tempting ripoff.
Poverty Pay
The underlying cause is the pathetic £6.19 legal National Minimum Wage - and that's the 'adult' rate!

The higher level Living Wage - recently updated to £7.50 - is entirely voluntary, the product of campaigning pressure on employers. It is hardly a princely sum. But even that modest figure has been denounced this week by the Scottish arm of the Confederation of British Industry as a threat to jobs and the economy!

Low pay is the curse of the modern working class. Over one in five earn below the Living Wage. Oxfam Scotland calculate that costs Scottish society £6billion every year.

Growing numbers of bosses dodge even the measly legal Minimum Wage. 
This sea of poverty pay slashes spending power - endangering jobs. 

Cuts create a pool for the Sharks
Westminster Coalition cuts to in-work benefits have further driven workers towards the murderous clutches of the Loan Sharks - whether the backstreet versions that enforce repayments with a claw hammer, or the £2billion-strong 'legal' Pay Day Loan outfits.

Workers' wages are at their lowest share of national wealth in 60 years. Recent government figures admit 280,000 of us in Scotland who work are in officially recognised poverty. That is the pool trawled by these ruthless examples of financial capitalism.

People desperate to survive clutch at the Wongas of this system to tide them over, only to be drowned in a sea of rip-off charges. No wonder Wonga was named as Europe's fastest growing business in 2010; and these predatory capitalists stole £62.4million in profit off workers' wage packets last year.

Credit Unions
Credit Unions are a lifeline to many working class people. Their interest rates are capped at 2 per cent a month - about 27 per cent APR. Compared to the Loan Sharks like Wonga that is like heaven on earth. But their resources are limited. On their own, they can't possibly provide the cheap or interest-free loans that would be possible if the enormous resources of the banking system were taken over into democratic public ownership. 

Pouring a few drops into Credit Unions from the ocean of wealth in their hands by the wage-cutting, benefit-cutting Westminster bootboys is a dishonest bit of political posturing. It's in the same school of hypocrisy as Westminster driving half a million families into food poverty and then praising Food Banks. 

And Cameron is accompanying this token investment with raising the cap on interest from 2 to 3 per cent a month, a huge leap in repayment costs for those seeking refuge in Credit Unions.

Plans by the Anglican Church and the Kirk to set up their own Credit Unions as well as provide premises and volunteers for existing ones seems laudable. But it is fundamentally flawed because it does not confront the root causes of people's increasingly desperate reliance on loans. And Justin Welby has quoted annual interest rates of 80-90 per cent as necessary to make a profit in such Credit Unions - hardly in keeping with "blessed are the poor".

Clear the temples!

Unless the Archbishop of Canterbury, the Anglican Church and the Kirk in Scotland are prepared to challenge the rule of the bankers, wage-slashing employers and their hired capitalist politicians, they cannot hope to drive the latter-day moneylenders out of the temple! They cannot hope to overcome poverty and the ocean of debt that decent working people are drowning in.

And the Church as an institution is hardly clean when it comes to capitalist exploitation. The Church of England has investments worth over £5.6billion. They used to be the biggest landowners in the country, but now also invest heavily in property and international stock markets.
They seek to appease the moral feelings of their churchgoers by setting limits on the type of investments they profit from. The Church Commission's guidelines accept that they can make money from investing in companies where up to 25 per cent of profits come from gambling, alcohol or high-interest loans, and up to 10 per cent from the arms trade; anything above these thresholds would presumably be sinful!

Neither Wonga nor Welby - organise workers!
Workers in low-paid, insecure jobs can't rely on the Tories or the Church hierarchy to rescue them from the Hell of Loan Shark Britain - with it's brutal anti-union laws, designed to shackle workers and hamstring our efforts to increase pay to a Living Wage as a guaranteed legal minimum for all over 16. 

Workers in unionized workplaces have on average 12 per cent higher wages than their exact equivalents in places where the government's laws and the fear and terror used by employers have blocked the unions getting organised.

So rather than wait for Eton-educated Westminster Ministers or Eton-educated archbishops to challenge Wonga capitalism, (which they are tangled up in anyway), we need to organise and fight back ourselves, as workers, young and old, religious and non-religious. 

Living Wage - not living hell!
We need to demand a decent Living Wage as a legal minimum; full trade union rights at work from day one in the job; taxation of the bloated rich and big business; and democratic public ownership of the entire banking and financial sector, to then offer cheap loans to individuals, small businesses and the public sector.

When the plundering Wongas of this capitalist world slap us in the face, we should reject the philosophy of 'turning the other cheek' so they can smite that too. 

We need to overthrow the capitalist Coalition that dictates on behalf of the moneylenders and wage-thieves of big business. We need to fight back together, 'clearing the temples' of these obnoxious capitalist exploiters and their system.

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