This article is part of a series on faith and finance.
On 23 October 2013 Public Spirit was formally launched in Westminster at an event which saw a panel of distinguished guests debate the question: ‘Can public faith help rebuild the link between morality and markets?’ In this response to that question, Liz Carnelley of the Church Urban Fund argues that faith communities in Britain need to be more vocal about what they believe in, and need to be more collaborative to challenge a ‘culture of acquisition’.
I’d like to begin by saying a few words about Near Neighbours. It is a five million pound programme, it is funded by the Department for Communities and Local Government (DCLG), and its aim is to build trust and relationship across faith and ethnic boundaries. The idea of it is to bring people together to do social action projects in their communities, to make their communities better places to live. It works through the Church of England – perhaps controversially, through the church’s networks and infrastructure – and it is a Christian charity; the Near Neighbours trustees are nominated by the Archbishop’s council of the Church of England, and by the Church Urban Fund, which is a separate charity. We work on three levels, firstly capacity building: we do training for young leaders and for faith leaders, which both include women, but then we also have a separate women’s strand. We work with four centres in each of the four areas that we operate in, and their remit is to encourage local activities. And then we have a small grants fund, and so far we have allocated 1.7 million pounds to very small groups in the areas we operate in to do community projects.
Near Neighbours is basically about building capacity so that people come together in an area, form a consensus about something for the common good, and then increase participation – we aim to go beyond the usual suspects, so people can come together to change their community.
“People are being driven to lenders who take your car as security. And they are people who just want money for a new school uniform. It’s not about wanting excessive things; it is just things that people need.”
So to the question, can public faith help re-build the link between morality and markets – I would say broadly yes, if people listen. When I was thinking about faith and morality, I was thinking about the first, if you like, businesses set up by faiths. If you think about ancient monastic communities, monastic communities were growing wheat for beer, grapes, wine; they were farming sheep for wool; they were teaching local children to read and write; and they were giving other people jobs. Today that would probably be called a ‘social enterprise’, or part of the ‘not-for-profit’ economy.
Fast forward to the nineteenth century, and philanthropists such as Titus Salt, who founded Saltaire in Bradford, he was a Congregationalist; or think about the Quakers who founded Cadbury. There are lots of examples of ethical businesses being set up by faith communities. Or think about the people who set up the Co-Op in Rochdale, they were Unitarian Methodists. (They are probably turning in their grave now, because the Co-op bank has just been sold to a hedge fund.)
Morality is difficult, though, because where do we invest our money? I have been racking my brains recently as I’ve had to decide where to put my pension, and I’ve managed to put some into the Amanah Fund, which is an ethical Sharia compliant fund – so it doesn’t invest in pornography, it doesn’t invest in weapons, and so on. But it is only a small chunk of it, and I must say I was quite taxed by the idea of what do I do with my own money and where do I put it. As you will know, Muslim communities have been forbidden to lend money that accrues interest. The Christian church’s attitude has been somewhat more complicated, so early on usury was forbidden, but by medieval times it was permitted to lend interest if the lender took some of the risk with the recipient, for example in setting up a business venture. And then more recently usury has come to mean excessive interest, so there have been lots of church campaigns against excessive interest and for a cap on interest rates charged by payday lenders.
“Faith communities have a role challenging the prevailing culture of acquisition, acquisition meaning ‘I am not anything if I don’t own something’.”
I will just give an example, when I was working up in the north there was a community organising group in Sheffield called Impact. In the 1990s they were trying to set up alternative vehicles for loans. Credit unions then couldn’t loan as easily as they can now. Even now they take three days to process loans, but back then you had to save with a credit union before you could actually be lent some money.
So they actually set up, through the support of the churches, a company called Financial Inclusion Services Yorkshire, which was three companies in one. It was financial advice to people, debt advice and financial literacy training, it was a loan company, and it was a credit union to encourage people to save. It still exists – through the last Labour government, they had a big initiative on financial inclusion, and they were one of the vehicles they used.
But it is a massive issue. I’ll just give you a simple story. Sarah lived in Rotherham, through the local paper she contacted a short-term lender; they advertised instant credit and no credit checks. She wanted to borrow £500. They said she could if she used her car as security, and she was desperate for the money to pay bills and to buy food. She didn’t really look at the interest rate or take any notice of what repayments were. She received £567, and for the following five months she had to pay £94, with a final payment of £510, and remember she borrowed £567 to start with. Now APR equivalent would be 348 per cent. You might say well that is a lot of money, but if you look at Wonga, they have a representative APR of over 5800 per cent. So, it is not actually as bad. Unfortunately because of the way it was set up, it meant she had to pay a big chunk in the six month, which obviously she couldn’t really afford. So, it was rolled over, and this is where lenders make most of their money through rolling loans over.
It’s called churning. Basically, they start the interest again, and you get penalties and so on for not paying it off. This loan was rolled over at least twice a year for five years. Over that time she paid thousands back to this company from this initial borrowing of £500. So that resulted in her marriage breaking up; she got very depressed, she couldn’t afford not to roll over the loan because she would have lost her car, and then she wouldn’t have been able to get to work, and she would have been in a worse position. I think one of the issues is that companies like this prey on the poor. Because you or I could just go overdrawn £500 probably, or we could say, ‘Where can we get the best deal for our loan? Sainsbury’s is a good rate’. These are people who can’t do that. So they are driven to doorstep lenders, to payday lenders, to people who take your car as security. And they are the people who really just want money for a fridge, or money for a new school uniform. It’s not about wanting excessive things; it is just things that people need. Perhaps you are aware that grants have been given for people who need a fridge, or whatever, but local authorities’ ability to give those grants have been drastically cut down. Whereas in the past they would loan you the money for a fridge and you could pay it back through your benefits over instalments, you can’t do that now. They give grants but they have got a lot less money to give.
“There are a lot of millionaires in the cabinet; they don’t really know what it’s like to be poor, to work with the poor, to live amongst the poor.”
I think there is a real issue in that the very rich in our country don’t really know what it is like to be poor. I was amused the other day at Vicky Price – you know, she has been in prison, she came out of prison, and she has written a book about her experience. She said when she went into prison she had, I think it was twelve hundred pounds in her handbag. She said I had the odd fifty, I had the odd twenty, and some fivers that I got in change. That’s the only reason she had fivers, because she got them in change. Contrast that with somebody who can’t afford to take ten pounds out of a cashpoint; they can only afford to take five. I don’t know if you know but not many cashpoints let you take out five pound notes anymore. There has been a campaign in some areas to let you take out a five rather than a ten because it encourages you to spend more that you have got. I think there is a real disconnect between people: there are a lot of millionaires in the cabinet, they don’t really know what it’s like to be poor, to work with the poor, to live amongst the poor. The rhetoric of benefit scroungers is not actually very accurate.
I was impressed by John Major talking about the dignified poor yesterday. He was talking about the fact people are going to have to choose whether to heat their homes, or eat. And he talked about the dignified poor. I thought that was a really good phrase. So, what can Near Neighbours do? Well, we are not a campaigning organisation; we are not claiming to solve all the problems in every community. I think we are about bringing people together to say, ‘What is our shared understanding of morality in this community? What is for the common good? What can we do together to build a better society?’ And, of the projects we have managed to fund, I would say a lot of them have an economic knock-on effect, so gardening groups, boxing groups, young people’s activities, art groups, people doing a mosaic on a local wall – things that bring people together to say ‘How do we make our neighbourhood better?’ I’ll just mention a few. Sophia Hubs was set up in London – that was a project to identify people with different faiths who would act as mentors for people wanting to start up their own business, of different faiths. In Handsworth, Birmingham, we funded a group who are doing ESOL classes for people with very little English indeed, and that was to support their development of language skills, so that they might access local jobs. In Leicester, a New Parks Community Panel was teaching people about food hygiene and giving them qualifications so they could run community events and access local jobs. A Shared Space CIC in Balsall Heath, founded by a Muslim, a Protestant and a Catholic, their project was to train local seamstresses. It’s a co-operative, to give people jobs in that community.
So in a very small way, Near Neighbours is doing a little bit, by enabling people who have got a good idea to crack on with it. I think faith communities, though, have another role, which is to challenge the prevailing culture of acquisition, acquisition meaning I am not anything if I don’t own something. And also, I think if we could promote positive values, positive values of mutuality, of relationships, of generosity. And, actually credit unions I do think have a place. In Ireland 50 per cent of the population belong to a credit union. In the ’50s the Catholic Church helped to spread the idea of credit unions, and now of a population of six million, three million people belong to one. Obviously, it is a rural place, there aren’t that many banks, you have got a church, local access to put your money in and take it out, but actually credit unions could be better used in this country. I don’t think the market is evil, but it needs to be more moral. I think we do need interventions like credit rate caps, I think faith communities need to be more vocal about what they believe in – our values – and I think we need to be more collaborative to enable that to happen. We need to work together more in our communities and step outside our comfort zones.
I would just like to end with a quote from the Bible if that is alright, Psalm 113:
Who is like the Lord our God,
the One who sits enthroned on high,
who stoops down to look
on the heavens and the earth?
He raises the poor from the dust
and lifts the needy from the ash heap;
he seats them with princes,
with the princes of his people.
Liz Carnelley is Programme Director for Near Neighbours, a CLG-funded initiative administered by the Church Urban Fund which aims to build relationships of trust in religiously and ethnically diverse communities.
The image of the loan company is included courtesy of Wikimedia Commons and is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.