Universal Credit and modern slavery

By Bernadette Meaden
July 18, 2018

Could Universal Credit facilitate modern slavery? It seems almost inevitable that it will, and not unreasonable to believe that it is already doing so.

 If Universal Credit works perfectly as designed, claimants must wait five weeks for payment, during which time some people will have no income whatsoever. In reality, the wait can be very much longer. People borrow to survive. They can borrow from the government, by getting an Advance Payment, but this is deducted from their benefit when it is eventually paid, making a low income even lower.

So, far from being a solution, Advance Payments, or the need for them, are a part of the problem, which is why in Universal Credit areas debt can become such a big issue. People are turning to payday loan companies and in some cases, they are turning to loan sharks – who are by definition, criminals. In a 2017 survey on Universal Credit, housing providers noted “The reported increase in the presence of loan sharks within our communities is alarming, but sadly not surprising.” 

But you can’t get blood from a stone. People with a very low or non-existent income cannot indefinitely keep up with demands for extortionate interest payments. So, what is the next logical step for a ruthless criminal? They take payment in other ways, perhaps in the form of sexual abuse, perhaps in the form of labour.

The England Illegal Money Lending Team (IMLT), a national team that investigates and prosecutes loan sharks, recently explained how becoming indebted to a loan shark can lead to modern slavery. In a blog How loan sharks are menacing victims and forcing them into modern slavery, they wrote: “Loan sharks are criminals who charge extortionate interest rates and use callous methods to force people to pay the money back. The IMLT have encountered victims being forced into prostitution, drug dealing, and illegal money lending by the loan shark.

“Debt bondage, also known as bonded labour, is the world’s most widespread form of modern slavery according to Anti-Slavery International.

“Debt bondage occurs when people borrow money they cannot repay and are required to work to pay off the debt, resulting in them losing control over the conditions of both their employment and the debt.”

This explanation of debt bondage was a guest post for the website of the Clewer Initiative which aims to enable the Church of England to detect modern slavery in communities and help provide support and care to victims. It is funded by the Clewer Sisters, an order of nuns founded in 1852 to help homeless women who were drawn into the sex trade. 

So a religious Order which was set up in the absence of a welfare state to help the victims of poverty and exploitation may now find itself indirectly helping people forced into modern slavery by welfare ‘reforms’. 

And it seems clear that this is a growing problem. In May this year, the Gangmasters and Labour Abuse Authority reported that the three most common nationalities referred to them for labour exploitation were Vietnamese, British and Albanian, and that “In 2017, the number of British potential victims increased substantially (362 per cent)”. The numbers are relatively small at the moment, but only 10 per cent of benefit claimants are yet affected by Universal Credit. The mass migration of millions of people still on legacy benefits has the potential to create havoc, particularly for people with physical and mental health problems. 

And sadly, when a family is tipped into poverty and debt, it is not only the adults who become vulnerable to exploitation. There is increasing awareness of the ‘county lines’ system run by organised criminals. As the Children’s Society explains, “County lines – or ‘going country’ – is when gangs exploit children, some as young as 12, to sell drugs across county boundaries…Gangs deliberately target vulnerable children, such as those in care or living in poverty."

It seems inevitable that as Universal Credit rolls out, more adults will be driven into the arms of loan sharks and potential abuse and exploitation, and more children will fall prey to the criminal gangs just waiting to exploit their vulnerability. A country with a properly functioning welfare state, with true social security, would not leave its citizens vulnerable in this way. 

* To safely report a loan shark, call 0300 555 2222 or do it online here

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© Bernadette Meaden has written about political, religious and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is an Ekklesia associate and regular contributor. You can follow her on Twitter: @BernaMeaden

 

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