Workers forced into debt and facing jail to keep the banks from crashing

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T EMERGED yesterday that the number of debt repayment orders issued by the courts last year reached a record level of 1.15 million.

These official figures showed that in 2019 county court judgements (CCJs) increased by 30,138 – more than double the number of CCJs issued in 2012 in England and Wales.

CCJs are orders against individuals who have failed to meet the repayment on debts, typically gas, electricity, credit card repayments and, increasingly, by councils over council tax arrears.

Mick McAteer, chair of the Registry Trust which compiled the information, said that they showed that ‘vulnerable households’ were under ‘severe financial strain’ despite the fact that historically low levels of interest rates have actually reduced the cost of borrowing.

McAteer said: ‘Low interest rates have cushioned the impact of debt levels on the typical household, but it conceals the fact that large numbers of more financially vulnerable consumers are facing real financial strain for a number of reasons.’

The number one reason for this surge in unsecured debt leading to workers being dragged before the courts is the simple fact that Tory austerity cuts to wages, and the growth of part-time insecure jobs in the gig economy, has meant that the real wages of workers are still way below wage levels in 2008.

The reality of life for millions of workers and their families is that they are forced to survive through running up debt just to pay for the necessities of life like food and rent.

The total amount of unsecured debt (excluding mortgages) for the average household in the UK now stands at a staggering £14,540 per household – an increase of £430 from last year – and now stands at well over £400 billion nationwide.

The savage austerity imposed by the Tories to bail out the banks from the world banking crash in 2008 has driven the working class to the situation today when millions are reliant on debt just to live.

Local councils have been aggressive in using the courts to enforce council tax collection and demanding custodial sentences for those caught up in arrears.

Imprisonment for council tax debt has been ended in Wales, Scotland and the north of Ireland, but it remains a custodial offence in England with penalties of up to three months in jail. 305 people were given prison sentences last year for failing to pay their council tax, while a further 6,278 received suspended sentences.

As McAteer noted: ‘The concern about local authorities is that because they are more aggressively enforcing debts, it is having a knock-on effect on households – i.e. it is making it harder to pay other debts which means they end up receiving a CCJ.’

Not just local councils, desperate to make up for the huge budget cuts inflicted by the Tories, but all the utilities and credit card companies are turning to bailiffs and the courts, and not just for large debts.

McAteer pointed out that the amount of a debt being pursued through the courts has fallen ‘quite dramatically’ – even a comparatively small debt will be enough to set the bailiffs and legal hounds on ordinary people. It’s a different story if you are a bank of course.

In October 2008, when it became apparent that every UK bank was in fact bankrupt, the then Labour government of Gordon Brown immediately handed them £500 billion of taxpayers’ money to stop them from crashing.

This was followed by even bigger hand-outs totalling trillions of pounds to keep them afloat – all paid for by workers through austerity. No banker was ever asked to repay this debt and no banker was ever hauled before the courts – let alone jailed.

All capitalism has to offer the working class is a future of austerity, debt and criminalisation. Workers are not prepared to see their lives shattered any longer to keep the banks and a bankrupt capitalist system staggering on.

The way forward is to demand that the trade union leadership either call a general strike to kick out the Tories and bring in a workers government and socialism, under which all debt will be cancelled, or face being removed and replaced by a leadership that will fight.