Zoe Williams is wrong about many things. But writing in The Guardian here she is certainly on to something. Very good: “When I lived round the corner from a “convenience” store cash machine, I used to hate the brass neck of that final question: “This machine will charge you £1.75 for your transaction. Would you like to proceed?” And then a simple “yes” or “no”, when what I wanted to say was, “I don’t have much choice, do I?” or “Yes, but how you live with yourself, you robot rip-off, is another question.”
About 300,000 people in low-income areas don’t live within 1km of a free cashpoint. This has been highlighted as a scandal for the consumer banking industry that makes “Wonga look like Santa Claus”, according to Frank Field, Labour MP and government adviser on poverty.
It is, when you look at it closely, a powerful constellation of disadvantage that a) the 7 million people who make most of their payments in cash are predominantly poor, unemployed or disabled, b) the cash machines that charge are mainly located in poor areas, and c) the poor are more likely to withdraw cash in smaller sums, by necessity not by some quirk of taste, and could therefore be paying £1.75 on every tenner. Field is right to point out that this is a rip-off, and right to call for more regulation.
But it should be noted that this is merely part of a pattern; it even has a name, The Poor Pay More, and has been an observable sociological pattern since 1967, when it was systematised by sociologist David Caplovitz. You can see it in the £2 courgettes from those same convenience stores, in the unit price of energy for those paying on a meter, in the astonishing fact that the poorest decile pays the most tax (“you’re talking about marginal tax rates”, people always say soothingly, at this point; as though that would be ok, to have people who earn the least paying the greatest penalty for working. But anyway, that’s incorrect: the boost to VAT, coupled with the senseless reduction in council tax credit, has left the poorest spending an eye-popping 47% of their income back to the government, a proportion which is only echoed in the top decile who, of course, have a surfeit of options to get round it).
And there’s the point – where you have no options, you get ripped off. It is in the nature of the market dynamic that the buyer’s power resides in two places: first, not especially wanting the product, and second, being able to go elsewhere for it.
When your need is high and your options are few, you are essentially going to the table not just with a poor hand, but the wrong number of cards; you’re going to get fleeced.
I agree, in a mild, broad sort of way, with holding businesses to account; I do not buy into this post-Apprentice landscape in which morals are portrayed as a quirky add-on, irrelevant to the living of life. Field is basically trying to turn this into a little-guy-against-the-bully-boy narrative, in which he or some other lawmaker can step in on the little guy’s behalf. That’s great, regulation is helpful, we’ve seen what havoc is wreaked without it. And yet, when even the government has a tendency to treat the middle preferentially and rip off the little guy, it is clear that the discussion needs something other than a paternalistic debate about protecting the vulnerable. Nobody, not kind-hearted poverty tsars nor businessmen with a philanthropic bent, can really protect the poor from their impotence in a market. This question is political, not technical or regulatory, and ends in the question: how much poverty are you prepared to live with?” (http://www.theguardian.com/commentisfree/2014/jan/02/cash-machines-poor-pay-more?CMP=twt_gu)
Please also find Rob Flello’s words on Left Foot Forward: “The first caller was a bearded man in his 50s clutching a crumpled plastic bag. Standing nervously near the front door of my constituency office, he spoke in almost apologetic terms.
He was followed only minutes later by a young couple pushing their child in a pram. The parents, like the man before them, appeared tired and drawn. This was hardly surprising, given that the same evil had driven the three of them to ask for my help: hunger.
Hard though it may be to believe in the 21st Century in the seventh richest country in the world, but the man and couple wanted a referral to the foodbank based in the Methodist Church nearby. This foodbank is one of 10 such centres in Stoke-on-Trent run by the Trussell Trust and one of four in the constituency I serve.
From April to the middle of last December, just eight months, the city’s foodbanks fed an astonishing 7,195 people, including 2,861 children, with almost 46,000kg of food.
The figures make for even grimmer reading if the period scrutinised is extended back to May 2012. For during these 20 months the foodbanks fed more than 13,900 people, including 5,275 children, with over 100,000kg of food.
Thinking these shocking statistics would help sting the government into launching an investigation into the causes of the food poverty now endemic in Britain, I highlighted some of them during Labour’s debate on the issue in the House of Commons shortly before the Christmas recess.
Shamefully, my hopes proved in vain as Tory minister Esther McVey from the Department for Work and Pensions responded to the Opposition’s pleas with her characteristic whirl of bluster and evasion while her boss, Iain Duncan Smith, took cowardice to new levels by grinning like a Cheshire cat before skulking away once the heat in the parliamentary kitchen became too much to bear.
The Tories and most of their Liberal Democrat allies then capped this astonishing display of cold-hearted indifference by marshalling their troops to defeat Labour’s bid for an investigation.
It seems as though the weightier the evidence of desperation – 60,000 people fed by foodbanks this Christmas, up threefold in a year; 500,000 fed by foodbanks last year, up from 41,000 in 2010 – and the more passionate the calls for answers and remedial action, the more resistant the coalition to being shaken from its damaging torpor.
Unfeeling and uncaring, the government has not only forgone the chance to tap potentially tens of millions of pounds of EU funds to support foodbanks, but insulted foodbank users – education secretary Michael Gove suggested their suffering was self-induced – and those who are left to pick up the pieces of ministers’ politics of starvation: the foodbank organisers themselves.
Delivering a Christmas gift which would have made Scrooge blush, Duncan Smith told Trussell Trust director Chris Mould that his charity’s claims to be non-partisan were a sham and that it was merely ‘scaremongering’ in a bid to sustain its ‘business model’.
But although the government’s incompetence and nastiness is a big disappointment to me and my colleagues, that’s not really the point.
For the real victims of their arrogant disdain are the thousands of people in Stoke-on-Trent, indeed throughout the UK, who are going hungry in increasingly large numbers.
They must continue to choose between heating and eating while the government, Nero-like, fiddles away on the sidelines, choosing to ignore a plight Oxfam believes is caused by rising prices, low wages and the benefit system overhaul.
And that, it should be stressed, is the main cause of the problem: the government is choosing not to help those in distress.
Until it changes tack and starts caring for all of the people it was elected to serve, and not just society’s elite, people will continue knocking on MPs’ doors asking for help.
And that should make all of us nervous and apologetic, and indeed ashamed.” (http://www.leftfootforward.org/2014/01/this-government-is-not-help-those-in-distress/)