Debt -
Debt Culture Eroding Fabric of Society – Dr Williams - 25/04/2008
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The Archbishop of Canterbury, Dr Rowan Williams has blamed Britain’s debt culture, millionaire banks and ministers for collectively contributing to straining the fabric of society.
Warning that an economy built on increasingly uncontrolled credit was leading to the erosion of family life and self-confidence for many people, Dr Williams called on the government to impose tougher rules on lenders. He also demanded action to bridge the wealth gap between the rich and the poor.
He told the House of Lords that Christian charities working with the poor have found that as many as one-in-three of their clients are driven by debts to commit suicide.
Specifically, he said, young people are under greater pressure from crippling levels of debt because there was no sufficient financial education to warn them of the consequences of the loans they were taking out.
The introduction of student loans has significantly worsened the problem, he said, adding that it encouraged young people by making them believe there’s nothing wrong with large debts.
The Archbishop strongly criticised the loans sharks and doorstep lenders, saying they routinely charge poorer borrowers as much as 1,000 per cent interest rates, which he described as indefensible.
“If the historic sin of usury still has any meaning in the world of smoke and mirrors that our modern credit economy seems to have become, it is surely in this context,” he said.
As mainstream lenders turn away people of low incomes, they are forced to take out loans from specialist companies who charge higher rates interests.
He added that he was bothered by such lenders profiting from charging high interest rates to the poorest members of the society and urged stronger regulation and even a legal cap on interest rates, if possible.
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