Over many years the UK economy has become reliant on debt to sustain itself. We are living in a Debt Economy, where stagnant wage growth combined with easy individual access to credit, a highly-leveraged housing mortgage market, a marketised education environment and a culture of consumption has become unsustainable for most households in Britain today. More worryingly is an economic environment where all-powerful banks and unscrupulous payday lenders continue to thrive while individuals barely survive; a stark imbalance of power between debtors and creditors that shows no signs of easing.
While governments have chosen to bail out the banks, households are left to pay the bill. This raises questions about the ‘morality of debt’ and its implicit repayment requirement; if banks don’t need to pay back their loans, why do we? However, if everyone simply started living within their means, refusing to rack up more debt, or choose to not pay down existing debt altogether, the economy would grind to a terrifying, irrecoverable halt – a reality that policy-makers are unwilling to either admit or consider. Their general response is rather to bury their heads in the sand, refusing to acknowledge the scale and scope of problem of household indebtedness.
This policy void has created a gap so large that civil society actors and individuals have had no choice but to step in, creating grassroots movements dedicated to promoting a restructuring of the entire economy, public debt resistance and personal debt resilience just to redress the balance. We use ‘civil society’ to denote a social space made of up dedicated individuals, key organisations, community-groups and new social enterprises. Thinking of civil society as a social space of interaction provides a framework for understanding the results of this research.
This report is the result of a six-month pilot study into the politics of debt in Britain. Using a range of qualitative methods including standard interviews, network scoping activities, collaborative encounter workshops and digital content analysis, we examine the causes and effects of household indebtedness and responses by civil society and individuals to combat it. The research reveals that, in the context of lack of government intervention, civil society actors and individuals are taking it upon themselves to fill the gap; by becoming resilient, by resisting, and by exploring ways to restructure their economy to restore balance.
There are those who promote a wholesale restructuring – of the financial services industry, of payday and other unscrupulous lending, bankruptcy law and the democratisation of money itself. Activist groups and researchers have also formed a resistance movement, contesting and campaigning against debt, intervening to expose the politics and power imbalances behind it. Finally, organisations large and small have formed to provide services to the indebted, offering individual counselling, support and assistance, helping individuals become resilient in the face of increasing financial peril.
At the individual level, people are increasingly turning to each other, forming support networks and solidarity online; sharing stories, building communities and offering advice. Digital spaces have become a vital place for those with nowhere left to turn; and despite civil society’s best efforts, the need is just too great to fill.
There is much work to be done; collaboration and communication is necessary but sometimes lacking among the myriad actors fighting the many and varied battles in the field, and not enough online outreach is occurring to meet individuals where they are, in the digital space. However, this report hopes to both celebrate the efforts of those dedicated people and also encourage them to combine resources, share ideas, and co-create solutions to the problem of household indebtedness, together. This research merely offers a starting point: a space for collaborative conversation about debt and the ways in which we can work together to craft alternatives to the Debt Economy.
Household indebtedness has become a political problem that can no longer be ignored. However, policy-makers are doing just that. In their absence, civil society actors and debtors themselves are stepping in to fill the void. The two main findings of this study identify that:
Civil Society is filling the policy void
- Civil society engages in a range of activities from advocacy to personal service to assist the indebted. As such, they are well-placed to diagnose key problems caused by rising indebtedness.
- These are passionate and dedicated people largely working in physical spaces like church halls and street stalls to develop solutions to problems of indebtedness, especially at household and community-level.
- Attempts by civil society to engage in digital spaces are not as effective as they could be; better digital engagement is necessary to widen impact and bring about political change.
Individuals are finding ways to deal with debt
- The indebted are using digital peer-to-peer spaces to share stories, seek support and exchange information.
- Such sites provide anecdotal information about people in crisis that is a rich and largely underused resource.
- Personal shame and embarrassment in talking about debt needs to be overcome to bring about political change.
- Build much needed research capacity to fill the ‘data gap’ on the scale and scope of the household debt problems, especially the wider problems it creates.
- Collaborate to develop a policy platform that restructures household debts — organise a bailout for the household sector, not just the financial sector.
- Resist the imposed morality of debt repayment — either by not paying or repaying in full.
- Establish a digital platform for engagement that will enable the creation of a collaborative network.
- Experience-based peer networks need to inform our understanding of how individuals enact debt resilience.