Social Fund To Be Run by Loan Sharks!

The DWP sucking up to loan sharks.

UK – After bailing out greedy bankers, with billions of taxpayers money, when the banks gambling houses lost vast amounts of money on fraudulent schemes to rip off the the public, the treasury is seeking to punish the poorest in society by allowing loan sharks and doorstep credit agencies to run the social fund emergency loans.

The social fund currently extends £500m a year in interest-free loans to some 1.2 million benefit claimants. The social fund was set up to help needy people, many of them elderly or disabled, meet the costs of items such as cookers, cots and funerals.

But the government consultation document says in future some loans could be run by credit unions, who it says typically charge annual rates ranging from 12.68% to 26.8%.

It states that the government is considering offering contracts to credit unions to provide “affordable loans”, as well as other services such as savings accounts and financial advice, to people at a local level.

“To fund the cost of these extra services, we are proposing that the credit offered under these arrangements could attract an interest charge of 1-2% per month,” it says.

The scumbag Tories in the person of Chris Grayling, Shadow work and pensions secretary acting out of character and in the interests of the poor for once accused government ministers of acting like “loan sharks”.

“These proposals are simply outrageous.

“Thousands of people are losing their jobs every week, and it is nothing short of extraordinary that the government’s answer is to propose abandoning interest-free emergency loans, and start charging 27% a year instead.

“Gordon Brown and James Purnell are behaving like loan sharks.”

Labour MP and chairman of the Treasury Select Committee John McFall told the Bastard that the social fund “does not work”.

“The government needs to… ensure that people get the genuine loans and genuine needs met,” he said.

“To put a 26.9% interest rate on that seems to me that it would make a bad situation even worse, so I think that’s a bit of a joke.”

The Liberal Democrats said the proposal was “totally unacceptable” and “seemed to be destroying the purpose” of the social fund.

Treasury spokesman Vince Cable told the Bastard: “It’s completely self defeating. It’s just driving people who are already in difficulty into even further difficulty.

“It’s harsh, it’s insensitive and it doesn’t reflect the needs of the day.”

Loan Sharks

  • Are unlicensed lenders. They operate illegally and will lend you money when nobody else will, but:
    • the interest will be very high and you may find it difficult to keep up the repayments
    • you might be forced to get a second loan to pay off the first, and so on and so on until your debts are out of control
    • they may turn very nasty if you fall behind with your payment
  • They prey on vulnerable people like the unemployed or lone parents.
  • The may force you to hand over Social Security Benefit Claim Books as security against loans.
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Author: Dr Suusi Watson

Editor of the Bastard

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