Wonga: The Welby Effect Part 2

After announcing yesterday that profits had more than halved, another Wonga story this morning. The Financial Conduct Authority has just put up a press release headed with the following announcement:

Wonga has entered into an agreement, known as a voluntary requirement (VREQ), with the Financial Conduct Authority (FCA) that requires it to make significant changes to its business immediately.

Reading between the lines, the FCA says that Wonga aren't doing enough to check people's ability to pay back their payday loans. Roughly 375,000 customers will now be released from punitive debt interest as a result, 330,000 of which have arrears of over a month - for them, the entire debt is being written off. That's 375,000 people who Wonga now admits it shouldn't have lent to in the first place. Their website now acknowledges the 5000%+ annual interest rate that Wonga previously deemed 'irrelevant'. It doesn't look at the moment as though the interest rate is changing, but they will be lending to fewer people.

Wonga made 4.6m loans last year, so the write-off amounts to 8% of the total number of loans in a year, and will cost them £220m. That's more than 5x their declared annual profits from 2013. At this rate Wonga could be out of business before Justin Welby has time to say Amen.

More from the FCA:
“We are determined to drive up standards in the consumer credit market and it is disappointing that some firms still have a way to go to meet our expectations. This should put the rest of the industry on notice – they need to lend affordably and responsibly.

“It is absolutely right that Wonga’s new management team has acted quickly to put things right for their customers after these issues were raised by the FCA.

Effective today, Wonga has introduced new interim lending criteria that should improve customer outcomes.

Wonga's press release in response is mildly worded mea culpa "we recognised that we may not have always made the right lending decisions, and on reflection some of these loans may not have been affordable", i.e. we were bleeding people dry who couldn't afford the repayments and we've finally been had up for it. 

Wonga's publicly stated priorities, after cutting out lending to vulnerable customers, include a plan 'to address the total cost of credit'  Hopefully the next wave of the Welby effect is an end to usurious rates of interest. After that, we need an end to advertising  during childrens TV programmes - the TV watchdogs need to step up to the plate now that the FCA have shown how its done. (you can lobby for that here)

And finally how about a few more stories about credit unions, so that people know there is an ethical alternative to branded debt sellers. 

If you live locally, here's a couple for starters:

Somerset Savings and Loans

Camelot Credit Union

Wonga: The Welby Effect

A plan for the church to develop credit unions has been floated, with Welby proud that the church is “putting our money where our mouth is” in developing an alternative to payday money-lenders. The plan, he says, is to create “credit unions that are both engaged in their communities and are much more professional – and people have got to know about them.”

It will, he adds, be a “decade-long process”, but Welby is ready for the battle with the payday giants. “I’ve met the head of Wonga and I’ve had a very good conversation and I said to him quite bluntly we’re not in the business of trying to legislate you out of existence, we’re trying to compete you out of existence.” He flashes that smile again. “He’s a businessman; he took that well.”

that was an interview in July last year. Since then Wonga has been fingered for sending fake legal letters to 45,000 customers, and made to pay out over £2m in compensation. This morning they've just announced that pre-tax profits for 2013 fell by 53%. At this rate Wonga will be out of business before the CofEs alternative credit union scheme has even got off the ground. Welby 1 Wonga 0.

Christians Against Poverty (CAP) in Yeovil

Just had the latest newsletter from our local CAP centre. Some fantastic work being done there, here's a few snippets from it:

Please pray for those potential clients who need our help, but can’t get appointments. We are booked up 3 months ahead and had to turn 2 away last week.

To help with the situation we are now delivering 38 Christmas hampers to our current clients, and we have opened a regular drop in centre at St John’s Church every Thursday morning from 10am to 12 noon. As well as being somewhere warm where our existing clients can drop in for a coffee, cake and friendly chat, it’s also useful for anyone with appointments in January or February, or potential clients to come and get some immediate advice. So far this has been very successful. 

We’ve managed to  make a couple of phone calls and avoid court action, bring a very urgent visit forward when we got a cancellation, and by showing what paperwork is needed make the first visit far more effective and less stressful....

..Also anyone who will otherwise be alone, and that includes a lot of our clients, is invited to the Christmas dinner in the schoolrooms on Christmas day.

Please pray for all these events, and that people experience Jesus for real at these events. I think that’s what “The Word became flesh” is meant to mean….

As we look back over another year we have a lot to be thankful for.

• We’ve now been open a month longer than 2½ years which is the national average.
• We’ve dealt with 102 clients.
• 17 of these are now debt free.
• 10 have made a first time commitment to Our Lord Jesus Christ as their saviour as a result of the Grace they’ve been shown and an explanation of the Gospel.
• 43 are on a debt management plan and are somewhere between initial contact and becoming debt free.
• 4 have parted company in a very positive way as they now feel empowered to work with their debts themselves and no longer need CAP’s help.
• 42 are still living in their homes, when they otherwise would have been evicted by their landlord or mortgage provider for arrears.

We were challenged at our 'clergy gathering' last week by a Kiran Martin from India, whose work in the slums was showing what the kingdom of God looks like in terms of transformation of everything - health, work, education, relationships, hearts, relationship with God, government, homes, from whatever angle you looked at it, it was good news. Reading the summary above I get the same feeling. 

Christmas Gifts: Archbishop v Advertisers

There's a Justin Welby interview with money saving expert Martin Lewis due for broadcast this evening, which is already making the news. Here's some of it:

The archbishop said that if he suggested that people should stop giving Christmas gifts, no-one would listen.

"It's obviously not what Christmas is about but to be absolutely honest, there's not that much point in saying it because nobody's going to pay attention," he said.

He added: "Giving at Christmas reflects that generosity of God. So be generous in a way that shows love and affection rather than trying to buy love and affection," he said.

"You can't buy it, you can show it, and when you show it, it comes back at you with interest.

"Save up for the Christmas budget, be sensible, don't put pressure on your finances - don't make your life miserable with Christmas.

"Share love and affection with reasonable gifts that demonstrate you really care for someone. That makes for the best Christmas you could ever have."

The CofE daily bulletin also has some of the coverage. There is a relentless attempt by advertisers to define what Christmas is about, and of course their false paradise includes us spending more money than last year on stuff we never knew we could manage without. I hope the Archbishops voice is heard above the beeping credit card machines.

Payday Lenders start defaulting after OFT investigation

Well, who'd have thought it? No sooner does the Office of Fair Trading start investigating the payday lending market, than 30% of the top 50 companies in the sector throw in the towel, rather than face the scrutiny:

The Office of Fair Trading (OFT) said that 14 of the lenders have told it that they are leaving the payday market and another firm which failed to meet the deadline has said it is no longer operating as a lender.

The watchdog has been carrying out a probe into "deep-rooted" problems within the industry, such as lenders encouraging struggling borrowers to roll over loans they cannot afford so that the debt balloons. Last month it referred the sector for a full-blown investigation by the Competition Commission.

A 12-week cut-off point set by the OFT for 50 lenders, which account for 90pc of the market, to show they are acting responsibly has now passed for all firms.

The 50 companies includes Wonga, and not one of them emerges with a clean bill of health:

The watchdog identified areas of concern with each of the 50 firms and in some cases it sent them annexes of up to 70 pages long.

A loan shark is a loan shark, whether they have a Rottweiler or a saturation advertising campaign.

Citizens Advice is now capitalising on the high profile of payday lenders with a campaign to encourage people to complain about mistreatment to the Financial Ombudsman: 

Citizens Advice chief executive Gillian Guy said: "Citizens Advice sees people day in day out who have been left in absolutely desperate situations by irresponsible lenders.

"Saddled with years worth of debts, many people are left feeling completely powerless."

Debt charity StepChange said the payday problems it is seeing are continuing to worsen. It helped 6,663 people with five or more payday loans in the first half of this year, which was almost the same number it saw for the whole of 2012.

StepChange's head of policy Peter Tutton said: "The number of people we help with payday loans looks set to almost double this year, while problems such as multiple borrowing and inadequate affordability checking by lenders continue to grow.

"The OFT's action including its compliance review and referral to the Competition Commission have both been welcome. However, the OFT should now issue a detailed progress report on how it plans to address the continued consumer detriment caused by payday loans."

Richard Lloyd, executive director of Which? commented: "“The fact that many lenders would rather leave the market than face scrutiny from the regulator shows just how bad practice has been in this fast-growing industry. People are increasingly turning to high cost credit just to pay for essentials or repay other debts, so it is vital that the Government and regulators continue to get tougher on irresponsible lenders."

This is good news, but clamping down on irresponsible lending is only part of the picture. There need to be less toxic alternatives, which address the reasons for people getting into serious financial difficulty in the first place. Despite the minor diversion into the CofE's investment policy, there seems to be a head of steam now behind Justin Welby's intervention last week, and a move from bland acceptance of Wongaville as part of modern life, to a serious questioning of the whole industry.

Snapshots of churches serving their communities.

Community Engagement from Newfrontiers NORTH UK on Vimeo.

good little vid sent my way recently, 5 good examples of churches responding to community need in creative and helpful ways.

Wanted: A Proper Debate About Consumer Capitalism

Only in Britain. We've never been very good about talking about the things that really matter, and it's bizarre that, as we've finally become more open in talking about sex, death, religion and politics (well, maybe with the exception of death), we've also lost the taste for serious conversation. It's now been the best part of a generation since we had an ideologically based political party, and Karl Marx would have his work cut out identifying one opiate of the people from the many candidates: lottery, celebrity culture, mobile phones, shopping, social media, sex. Pretty much anything except religion.

And so it is that, when a protest about how our economic system is run, a chance to debate some of the fundamental things in our society, finally hit the headlines for seven days running, we blew it. Instead of a substantial discussion about the consumer society, vast city pay packets, our crippling dependence on the banks, what do we have? The pretty trivial issue of whether a Cathedral was right to close on health and safety grounds. Only in Britain could the chance of a fundamental debate over the foundations of our society be scuppered by Health and Safety.

What have we been talking about:
 - Should St. Pauls have closed?
 - Should Giles Fraser have resigned over something that hasn't yet happened?
 - Would Jesus be in the camp, or in the cathedral? Or neither?
and there is now the unedifying spectacle of Anglicans publicly criticising each other (though I guess that's what I'm doing now!), and groups with little sympathy for the CofE pitching in to rub salt in the wound.

There has been an opportunity this week for the church to speak about Jesus message, to articulate a biblical ideology of wealth, poverty, justice, and money. St. Pauls has, apprently, a report ready to be published on the morality of City of London capitalism. Provided it is presentable and well-argued, this is precisely the time to go public with it. There will never be more attention on St. Pauls and its views than there is now, and it could take the debate in a whole new direction.

After all, what should we be talking about?
 - Developing an alternative to a Western economy based on debt, and a global economy biased against the poor.

 - Looking at the crippling economic, social and psychological consequences of consumer capitalism, and the epidemic of debt, depression and social breakdown that has come in its wake.

 - A robust public ideology of justice ('fairness' sounds a bit too weak and whiny for the phenomenal greed and inequalities we are dealing with here), that refuses to be held to ransom by people threatening to take their business or tax receipts elsewhere, one which values justice, integrity and community higher than profit.

 - Revisiting the whole structure of work and family, which has changed out of all recognition in 2 generations. The 24 hour society, twin incomes to prop up inflated mortgages, a toxic mix of overwork for the employed and no work for the unemployed, the increase pressure to offload children to state-sponsored childcare, and an ossified and overpriced housing market. How did we get here, and is it where we want to be?

 - Whether the current 'hands off' government approach really holds any water: lecturing banks, energy companies and city bosses has so far failed completely. We are rapidly reaching the point (maybe we have already) where corporations are more powerful than governments. Can this be tolerated? Is there an alternative? Can business be humanised, can we find an alternative trump card to profit and economics, and if so how?

 - The debt crunch has revealed just how weak and vulnerable the Western economies are. That the Eurozone is now actively going cap in hand to China is deeply worrying. The final act of Western democracy, as the sun set on its empire, was to max out its credit card and turn to an oppressive, rights-denying, church-suppressing, web-censoring regime for help, promising to lobotomise its conscience in payment. (Gordon Browns greatest gift to the British people was his '5 economic tests' for entering the Euro, tests which would never be passed as long as Brown was Chancellor. History may smile upon him for this.) Is there a way to keep Britain from this route? Even if there is, what will a world look like where appeasement of China is the pre-requisite for doing business? What will it mean for the oppressed Chinese themselves, for the world to go silent?

 - Plus a whole stack of issues around trade, global poverty, the conditions in which many Western consumer goods are produced (including, probably, some of the tents outside St. Pauls and the clothing worn within it), global warming etc. All of which, at root, are moral as well as economic questions.

Sorry, this is a bit of a rant, but I'm so frustrated. Perhaps I should pack my tent for London and hope to catch the eye of a camera crew. Perhaps taking my dog collar would help.

CAP Money Course

Good to hear that the Christians Against Poverty 'Money Course' will be running in lots of places around the country. We've teamed up with another local church to offer it from next week, after a pilot run in the autumn which worked very well.

Christian Today has more about the course, and CAP's work and vision.

“Whilst many in the UK are still reeling from the recession, we are convinced that, with the principles advocated in CAP Money, many will be saved from slipping further into debt, whilst picking up excellent financial skills that will stand them in good stead for the rest of their lives.”

CAP has an ambitious plan to open 80 new debt counselling centres this year, in addition to its existing 112 centres. It is inviting churches to consider running CAP Money as part of their outreach within the local community.

Speaking to Christian Today recently, CAP Operations Director Kathryn Foster said the expansion reflected the scale of the need. “Sadly we don’t see the need lessening. We would love if it our debt management courses got so in the fabric of society that people didn’t need debt counselling any more but we’re a long way off that,” she said.

Finances, Family and Footie: What we Worry About.

this released today by the Samaritans:

Nearly half the UK population (48%) has worried this year about debt and money, according to a survey published today by Samaritans and YouGov, with almost a quarter of people (23%) describing 2009 as a bad year or their worst year ever.

The poll of more than 2,000 people asked the public to identify their five biggest worries over the past year. After money, other top-five sources of anxiety were problems in relationships with family and friends (reported by 35% of people) and physical health concerns (32%), followed by fears over job security (24%) and workplace stress (24%).

Other key findings were:
loneliness was one of the top worries amongst 21% of young people (aged 18-24) compared to only 8% of older people (aged 55 plus);

more women (25%) have worried about their appearance or ageing than men (18%);

10% of men have worried about sport and how their favourite team is doing compared to 1% of women;

people have been more worried about domestic politics (24%) and world affairs (23%) than about what was happening in their own neighbourhood (8%);

over twice as many women (23%) have worried about their ability to cope emotionally with life than men (11%);

while 23% of people described 2009 as a bad year, for 18% 2009 was a good year; 41% thought the year had been both good and bad, featuring ups and downs.

press release and link to the full survey, including a regional breakdown, here.

I wonder if the message that 'there's probably no God, now stop worrying...' would be of any help here? Probably not. For something a bit more practical, there's a few debt resources and organisations here. We've just started using the CAP Money course, 3 dvd-based sessions on finance management, and are aiming to run it regularly in the new year. A pilot in the autumn was well recieved, so it'll be interesting to see what the take-up is in 2010.

If anyone reading this feels moved to help, then why not volunteer for the Samaritans? Details at the foot of this link.

Faith in public: Blair and Blears, Nurses and Curses

Tony Blairs speech at the Obama prayer breakfast makes interesting reading:

Today, religion is under attack from without and from within. From within, it is corroded by extremists who use their faith as a means of excluding the other. I am what I am in opposition to you. If you do not believe as I believe, you are a lesser human being.

From without, religious faith is assailed by an increasingly aggressive secularism, which derides faith as contrary to reason and defines faith by conflict. Thus do the extreme believers and the aggressive non-believers come together in unholy alliance.

And yet, faith will not be so easily cast. For billions of people, faith motivates, galvanises, compels and inspires, not to exclude but to embrace; not to provoke conflict but to try to do good. This is faith in action. You can see it in countless local communities where those from churches, mosques, synagogues and temples, tend the sick, care for the afflicted, work long hours in bad conditions to bring hope to the despairing and salvation to the lost. You can see it in the arousing of the world’s conscience to the plight of Africa.

There are a million good deeds done every day by people of faith. These are those for whom, in the parable of the sower, the seed fell on good soil and yielded sixty or a hundredfold.
What inspires such people?

Ritual or doctrine or the finer points of theology? No.

it's a speech that could be delivered in America without apology, but Blair hints at the difficulties with faith and public life in the UK

I do not mean by this to blur the correct distinction between the realms of religious and political authority. In Britain we are especially mindful of this. I recall giving an address to the country at a time of crisis. I wanted to end my words with “God bless the British people”. This caused complete consternation. Emergency meetings were convened. The system was aghast. Finally, as I sat trying to defend my words, a senior civil servant said, with utter distain: “Really, Prime Minister, this is not America you know.”

do read the whole thing, very good.


Hazel Blears spoke to a new Debt initiative set up by the Evangelical Alliance, aiming to co-ordinate and resource Christian responses to the debt crunch/recession. She quoted the Bible a bit, and promised to listen more to Christian groups. A new 'charter' is promised to give local authorities/funding sources more encouragement to fund welfare work offered by Christian groups, but there's concern that it might restrict what we can actually do.


Anglican leaders, including African bishops have called for Robert Mugabe to step down. If only political leaders in Africa were just as forthright.


It's utterly bizarre that using the word 'golliwog' in a private conversation gets you the sack, whilst abusing the Prime Minister for his race and disability at a public event doesn't.


The Somerset nurse suspended after offering to pray with a patient has been reinstated. The statement from her NHS trust makes it clear that they weren't happy with what she did, but recognises that spiritual support is part of patient care:

"We feel we were right to investigate the concerns from people about Caroline’s actions...

However, we are keenly aware of the importance of an individual’s spiritual belief, and we recognise that Caroline felt that she was acting in the best interests of her patients. For some people of faith, prayer is seen as an integral part of health care and the healing process....

It is acceptable to offer spiritual support as part of care when the patient asks for it.
But for nurses, whose principal role is giving nursing care, the initiative lies with the patient and not with the nurse."

New NHS Guidelines, published at the beginning of January, state that attempting to 'preach' your religion, or expressing particular points of view consistent with your faith, could be interpreted as harassment. The guidlines are worryingly vague. There is no distinction drawn between 'preaching' faith and simply telling folk what's good about it.


The Good Childhood Report, featured in the media earlier this week, has now been published, summary here. Dave Walker has put together a good collection of links on this today.


Worth Abbey is now holding Monastic Taster Weekends, for people interested in exploring a calling to be a monk.

More on most of these in my latest Touching Base column at the Wardman Wire.

More Debt Resources - book sale at Eden

Eden books are currently offering 20% off all titles on money management, the offer ends on Feb 16th.

Other debt resources here.

Debt Resources

Update: latest debt stats from Credit Action just out:

£135m daily increase in UK debt
£59,702 average household debt (including mortgages)
£224m interest paid in UK daily
every 10 minutes a property is repossessed
2,466 people made redundant every day
1 person every 4.8 minutes declared bankrupt or insolvent
£102 average daily decrease in house prices in 2008
The average houshold paid nearly £3500 in debt interest in 2008.
The average interest rate on credit card lending is currently 17.42%, which is 16.0% above base rate (1.5%).
30% of adults are concerned about their ability to manage personal debt.

full monthly report here, bleak stuff.


original post
Following on from the CRE post yesterday, here's a slightly bigger list of debt and money resources for churches:

- Christians Against Poverty http://www.capuk.org/home/index.php, debt counselling and advice. Tel 01274 760720

CAP have developed a CAP Money course, a 3-session course on money management for use in local churches, and will train local church members to run the course. There’s a training day in Bristol on 25th April. This is a great way of doing something practical for the community. (recommendation from one person who's using the course here)

- Care for the Family http://www.careforthefamily.org.uk/ online resource on debt and money management. CFF has just published The 60 Minute Debt Buster, on money management, which was on sale at the CRE. If it's anything like the Rob Parsons books on marriage and parenting, it will be very good.

- Credit Action http://www.creditaction.org.uk/home.html has information for employees, self employed, singles, young parents, lots of practical advice, and up to date information on debt in the UK. Tel 0207 436 9937

- Church of England links to resources on debt and money. http://www.cofe.anglican.org/debt

This week is also poverty and homelessness action week, lots of downloadable resources for events, church, schools, youth, factsheets etc. on the website (thanks for the link Joe).

And there are various contact numbers/websites at the end of this Care for the Family publication, including the CAB, Business Debtline, National Debtline, and Consumer Credit Counselling services.

Christian Resources Exhibition Exeter 09

Made it to the South-West CRE on Thursday, and came home with the usual bag full of leaflets, cut price books, and ideas about various things which will probably never happen. 'Highlights' included:

- the clergy catwalk show, mainly for one vestment which, from where we were sitting, looked like it was made out of rubber. Apparently they were all offered £50 to do it. I spent considerably more than that on a new set of shirts, which you'll see on the streets of Yeovil in a few weeks.

- Lucy Moore, speaking about Messy Church, really bubbly and enthusiastic, and great to see how many churches have used this model for reaching out to families and all ages. They have a website, there are now 2 books out, and it's been so popular that Lucy is now employed full time by Barnabas to help Messy Churches around the country.

- Christians Against Poverty have developed a 3-session course which any church can run on money managament and debt issues. Spot on for the current climate, they will train up your church members to run the course, provide the course materials, and then local churches can get on with it. Training day in Bristol on April 25th. More stuff on debt tomorrow.

- The Exeter diocesan beer, which is nearly as good as ours. However they have a really nice logo for their 2009 celebrations (its 1100 years since Exeter and Bath & Wells dioceses were created) which puts ours to shame. In fact, I'm not even sure we've got one! If their cricket team all turn up in June (Church Times cup, much more serious than the Ashes) wearing the black diocesan hoodies then we'll just point and laugh, then ask quietly whether we can have one.

- Street Pastors stall, they did a seminar on Thurs and lots of people who hadn't heard of it were really interested. Our Yeovil Street Pastors started training yesterday. I picked up the Torbay Street Pastors newsletter, which has a statistical summary of what they've done in 18 months or so on patrol, here's a few of them:
Nights 50
Man hours 2356
Flip Flops 191
Emergency Blankets 45
Contacts 3969
Incidents 190
Lives Saved 3

That last one really hit me between the eyes. Fantastic.

Now back to those leaflets....

Red Bull Economics

An upbeat letter from Barclays earlier this week, forecasting £8bn profit for 2008 (in any other age we'd have been scandalised by this kind of figure, now we're just relieved), shows that even the banking sector isn't a complete catalogue of woe. Royal Bank of Scotland, turning in a humungous loss, isn't the whole story.

Yet the government is spinning us a different line: this is a global recession, every country is suffering, there's nothing we could have done about it. Call me naive but if a bank can manage its affairs well enough to post a 10-figure profit in a year like 2008, then it takes quite some credulity to believe our government and economy is entirely powerless in the face of global market forces.

It's also a handy get-out clause: if it's not our fault, then we don't have to admit to being wrong about anything. It's good politics, but the one who fails to learn from the mistakes of history is doomed to repeat them. Meanwhile Gordon Brown can export the blame across the Atlantic, whilst taking the credit for putting together a rescue package.

But isn't credit the problem? Would we have a less severe housing crash if steps had been taken to dampen down prices a few years ago, and to restrict irresponsible lending by banks? Is it sustainable to continue build an economy on debt. Consumer debt is a bet on future income, we are spend money which doesn't yet exist. Our economy has been running like a nightclubber on Red Bull - propping itself up on the artificial stimulant of credit, and only now the effects have worn off are we realising that the body economic is completely knackered*.

The economic slowdown is now starting to hit really hard - Corus, Barratts, Woolworths, etc. It seems like a harsh time to be asking difficult questions, but they've got to be asked at some stage or we'll end up here again. Robert Peston talks of needing to 'reconfigure' our economies, but so far all we've seen is scaffolding to prop up the old structure. Here are a few questions I have, which may all have perfectly sensible answers. Not being an economist, or an expert in global trade, all I can do is ask the questions. Some may be dumb, unrealistic, naive etc. And if that's the only reason others aren't asking them, then I'll shut up:

- Is consumption the only way out of recession, or is it just a short term fix?

- We've been living beyond the means of the planet for some time now, is it time for some creative thinking about how our national economies can be smaller, how we can function with less consumption of resources rather than a constant increase?

- Can work be shared out more evenly across a population (why are some working 50-60 hour weeks and some 0?), or across a lifespan?

- Is it possible to sustain a modern economy without mind-boggling levels of debt? Can capitalism reinvent itself, or does market capitalism, with its constant reliance on the creation of new demands through advertising for the market then to 'satisfy', always end up consuming itself?

- Is modern capitalism compatible with the constraints of a finite planet, or does it need a major overhaul? Is this a one-off blip, or the first of a series of recurring shocks which show that our global economic and environmental RPM's are in the red zone?

The old chestnut about crisis and opportunity being 2 sides of the same reality has probably been overdone, but it's often only when everything falls apart that we ask questions about what we had to begin with. Most alcoholics only start on the path to recovery once they hit rock bottom, and recovery involves a very different set of principles and practices to what got them into trouble in the first place.


*In 2008 personal debt overtook GDP. We now owe more than the economy produces in a year. To put it another way, we are trying to run a year ahead of our capacity. The only way for the burden of debt to fall is for spending to reduce below income, so that we can use the remainder to pay off debt. So the choice is: reduce debt (= recession, because spending will fall), or try to maintain debt at current levels, or higher (which is what the govermnent seems to be aiming at).

For a different angle, try 'the good recession' (ht Tim Chester)
If you are familiar with sumo wrestlers, they gain hundreds of pounds. These men are huge. And they do this by eating tons of food and literally train their bodies not to feel full. They literally stretch their stomachs, massaging their intestines to make room for food. Isn’t that gross? And they do this to reset their definition of a normal meal so they can gain hundreds of pounds. In a similar way, our definition of need, when it comes to possessions, is completely out of proportion. We’re like those sumo wresters that have redefined their needs so that we can take in more and more.

Useful help sites

Credit Action

Matter of Life and Debt (CofE resource page)

Care for the Family resources on money and debt.

Christians against Poverty list of local debt counselling centres and details of what they do.

Resources on Debt, Families, Relationships

Resources from Care for the Family:

a good leaflet on debt and families, available free to download here.

Events listing, including national tours of
Teenagers! What Every Parent Has To Know
Motherhood - a Roller Coaster Ride
The 1-2-1 Challenge (activity weekends for 1 parent & 1 child)
Breaks for single parent famlies
Living With Loss (for bereaved parents)
A Different Journey (for those who have lost a partner at a young age)

facilitator training days
How to Drug Proof your Kids
Quidz In - raising financially confident children

The CFF website also has sections for bereaved families, stepfamilies, sigle parents, dads, marriage, parent and toddler group leaders and several other family-focused areas.

Faith and Recession

Following the success of Back to Church Sunday, the Sunday papers speculated about whether the credit crunch is forcing people to reassess their values, bringing some of them back to church. (Ht Start the Week). Meanwhile comment is Free at the Guardian is hosted a series of articles last week on 'Can Religion Help Us Through the Slump?' Here's the line-up

Monday's response - Julia Neuberger: Whether you're religious or not, what matters is the desire to make a difference to other people's lives

Tuesday's response - Francis Davis: Across the country it will be priests and imams who stand with local people in their moments of need . Davis is one of the authors of Moral but No Compass, which surveyed the charitable work of the church, and pointed out the inadequacy of the Governments dealings with Chrisitan charities.

snippet: While Gordon Brown's response (to the recession) has been to lead us into even more borrowing, there will be thousands for whom a hug will be just as crucial as their gas meter is ripped out in front of their eyes or as they find themselves locked out of their houses by insistent lenders and landlords.

In neighbourhoods across the country it will be priests and imams who stand with local people in such moments of terror. They are, after all, often the only "professionals" to have the courage to actually live among the people with whom they work.

Wednesday's response - Ishtiaq Hussain: Like other people of faith, Muslims are enjoined to be charitable; crucial during times like these

Thursday's response - Graham Kings: When belts tighten, do they have to tighten around the necks of the poor?

Friday's response Nick Spencer: Some varieties of religion prey on the poor, others offer them help. Both kinds will flourish during the recession

Ht Thinking Anglicans.

... with a whole host of carol services coming up, I'm challenged by all of these about the message I'll be preaching. Often I try to tie Christmas in to something in the news, or something topical, and this year the challenge is to relate it to the recession and the implosion in global capitalism. First main one on Weds (Yeovil College), I'll probably post a full list later this week.

CofE resources: Advent & Debt

Couple of useful things in the CofE November e-mailing

‘Why We Are Waiting’? – launch of the CofE’s Advent campaign
An Abbott, a Bishop and a Canon Theologian are set to launch an Advent website aiming to put the ABC of waiting back into wanting as the countdown to Christmas begins. The website – www.WhyWeAreWaiting.com – will include an introductory film featuring the Archbishop of Canterbury and an Advent Calendar with a difference made up of reflections, podcasts, and waiting tips. The website has been produced by the Church of England and will be launched by the three church leaders on Monday, November 24. More details at http://www.cofe.anglican.org/news

Separately, www.paperlesschristmas.org.uk offers a time-locked Advent countdown of 24 videos produced by Jerusalem Productions Limited, in association with Bible Reading Fellowship.

Tens of thousands turn to CofE for credit crunch advice and prayer
As the financial situation across the globe worsens tens of thousands are continuing to turn to online prayer and advice provided by the Church of England. The credit crunch is the biggest news story of 2008 - often the main item in television and newspapers reports. See our debt section on how to get help or click here to view prayers.


If you want to sign up to a monthly communications digest from the CofE, go to http://mxmodd.mxmfb.com/action/?v=%2Fc%2Fs%2F14889410%2Ff%2F21295849

Bipolar Banking? Analysing the Money Markets

I'm not sure I agree with the Pope.

"We see it now in the collapse of the great banks that money disappears, it's nothing," he remarked earlier this week. I'm sure he'd have been just as chilled if St. Peters Rome (completed with the money raised by selling time off purgatory to medieval peasants), had collapsed. The moral he drew was that God is more dependable than money.

But this isn't a crisis of money, it's a crisis of faith. 5 live's phone-in yesterday morning included Kriss Akabusi, who reminded us what we already knew, that the word 'confidence' comes from the Latin for 'with faith'. (You didn't? Me neither)

Market Mentality
Look at the language people are using: 'the main emotions are panic and fear' (Times) 'uncertainty and fear' (George Bush) 'panic, fear, frenzy' (Telegraph), 'brutal...riot...chaos' (Wall Street Journal: bit more macho). What's striking is that most of it is psychological language. The crisis is not quite 'all in the mind', but it's close. The talk is about rebuilding confidence - without confidence the market won't stabilise, but until the market stabilises people won't have confidence. Oops.

If you had to compare the graph of any banking share over the last 12 months to a mental state, it would be manic depression. The manic phase: overpricing, fuelled by reckless borrowing, has turned almost overnight to a spiral down. Take HBOS: somewhere between £12 and £1.20 is (shareholders hope), the true value of the company. But it doesn't change that quickly over 18 months.

DONT PANIC!
One thing I admire about Alastair Campbell is his openness about his depression, of which there is more in a documentary tomorrow. Our financial markets are cracking up too. Unfortunately, being in a room full of 1000 other panicking people doesn't make it easy to stop panicking. Just as modern life is toxic to mental stability, so is the stock market.

I remember those neat little charts from economics 'O' level (GCSE for you young 'uns), which made market behaviour look oh so scientific. The worshippers of the free market maintain that the market system itself is fine, but after the last few weeks, that belief seems increasingly psychotic (= loss of contact with reality). Whilst the real economy grinds slowly into recession, share prices cry 'look at me' as they jump from a cliff. The Gadarine swine, who hurled their demon-possessed porcine bodies into a lake from a cliff-top, are the closest biblical metaphor.

Medicating the Market
So who will cast the demons out of the pigs? The challenge is at least as much a mental one as an economic one: what will trip the psychology of the markets into an upswing, or, at the very least, boring old stability? What is the seroxat for stock markets? We have the talking cures (one a day from George Bush), and a sizeable one-off financial pill, but every depressant knows that medication works -when it works at all - only when you take it regularly over the long term.

What is the long term medicine? Gordon Brown, speaking on Monday, outlined a moral solution:
"My values, the values of the country, celebrate hard work, effort, enterprise and responsible risk taking - qualities that markets need to ensure that the rewards that flow are seen to be fair....And that is why we back the work ethic; we support effort and enterprise and responsible risk-taking. These are the morals markets need."

So the problem, according to Brown, is irresponsibility, lack of trust etc., and the solution is a more robust moral code for the markets.

Just in case we hadn't got it, he said the same thing again on GMTV on Thursday: "I am angry at irresponsible behaviour. Our economy is built around people who work hard, who show effort, who take responsible decisions, and whether there is excessive and irresponsible risk-taking, that has got to be punished."

That's all well and good: markets without a moral foundation don't work. If there is no trust, integrity, honesty etc. then there is no basis for open trade and commerce. But is that enough? Will it stop the kind of speculation and herd psychology which drives markets over a cliff? And if not, what's the alternative?

This is the way the world ends, not with a whim, but with a banker.
(ht) We don't know if global 21st century capitalism can survive without epidemic levels of borrowing, because we've never tried it that way before. But we do know if we don't try a different way, there won't be a globe full stop. Like it or not, global recession is the only sure-fire way to reduce our carbon footprint.

It's too soon to tell whether we'll look back on autumn 2008 as the beginning of the madness, or its end: the final dash to a watery grave of an unbalanced and unsustainable system. How's the patient, nurse?

(cross-posted from Touching Base, a weekly column at the Wardman Wire)

Debt Resources

Care for the Family have published a new debt resource, 'Money, Debt and Family Life' available at this link. It's one of a whole series of pdfs, available here, which cover things like adoption, eating disorders, miscarriage, step-parenting, postnatal depression, caring for elderly relatives etc. They are very well set out, and are great resources for a support group, or for any church or individual looking for a good starting point for advice and help.

Other debt links, mentioned on the document, include:
National Debtline:
Offers a helpline, information pack and fact sheets.
Freephone: 0808 808 4000
Website: http://www.nationaldebtline.co.uk/

Consumer Credit Counselling Service: Offers a help pack and advice
Wade House, Merrion Centre, Leeds LS2 8NG
Freephone helpline: 0800 13 8 1111
(open from 8am to 8pm Monday to Friday).
Email: contactus@cccs.co.uk http://www.cccs.co.uk/

Christians Against Poverty (CAP):
A national debt counselling charity working through a network of 64 centres based in local churches.
Jubilee Mill, North Street, Bradford, BD1 4EW
Tel: 012 74 760720 Email: info@capuk.org
http://www.capuk.org/

With the credit crunch, fuel and food prices starting to bite, never mind the 10p tax abolition, problem debt is an increasing problem, and if churches are asking 'what can we do to help our communities?' then this is part of the answer.

Be a Better Debtor

The Church of England has produced a helpful new resource for people in debt, timed for the post-Christmas financial reckoning. At a time when 8m of us owe over £10,000, and 2m people don't even know how much debt they're in, debt is one of those icebergs that sinks a lot of people, and many more in an economic downturn.

The main resource page is here, with a 1-page 60 second questionnaire here to work out how much debt you're in and how big a problem it is. The resource page has lots of useful links, a powerpoint presentation ready to use in church or any sort of meeting, tips on saving money and wise budgeting, and some case studies.

The Ugley Vicar got there first. Meanwhile Jeremy Clarkson, who published his bank details in the Sun to make the point that we shouldn't get so worried about the Inland Revenue losing our personal data, has been eating his words after finding that someone had used the info to donate £500 of Clarksons money to charity.