"Well it pays my loan company £2 a week and then the £5 I use on a weekend for food ... normal food. Basically we wouldn't have meat at the weekends so it supplies meat and even a loaf of bread, a pint of milk." This is a desperate woman.
Denise lives in Bramley, Leeds, on a run-down council estate. For the past 14 years she's been in hock to the tallyman. It's an old-fashioned name for agents who work for Britain's 1,200 money-lending companies. Debt is old-fashioned, too, but it's not stopping Britain's families of the Nineties from sinking into it.
Money-lenders wrote 10 per cent more loans last year. When the charges they make can push up the annual borrowing rate, in effect, to 500 per cent or more, one has ask why they're still in business.
Leeds people are shrewd, not easily taken for mugs over money. I know because I grew up there. That is why I decided to ask my questions there when I was asked by the BBC to make a programme about debt.
There is a second reason why Leeds is a good place to ask. It regards itself as the financial capital of the North. For the last two decades, while other northern cities were whingeing, Leeds was neatly folding away its old working clothes as the textileand engineering industries declined. Today it sports a smart city suit. Employment in financial services grew by 40 per cent in the Eighties. The big institutions opened prestige offices, and the cranes are still turning in the city centre.
A development corporation hoarding by the side of the railway tracks as you enter Leeds station welcomes you to the "Promised Land". A deliberate line has been drawn through the word "Promised" and "Delivered" has been written in its place. The filthy black warehouses that once hid the polluted flow of the river Aire have been opened up and gentrified. So has the old Corn Exchange and the Victorian arcades at the bottom of the town where the poor once shopped but are now no longer to be seen.
Where have they gone? According to the Leeds MP John Battle, they have been banished from the city back to the council estates inside the ring road, returning only to clean the new offices. "Not everybody is part of the boom," he says. "Leeds is still inmy view dividing. Not a divided city. The process hasn't stopped. But the rich are getting richer and others are getting poorer and the two are not coming together, so you can end up with some almost physically locked out of that boom because they're ina spiral of decline."
Now that I have spent a month living with the poor in Leeds, prying into their lives, I have to agree with him. I had reported on poverty before, but I had never fully appreciated quite how "the system", for want of a better word, conspires to keep good people down once they are down. And I never felt before the same sharp sense of desperation as when I sat down with some of these people to work out their outgoings and income. The sums didn't match. The second time someone apologised for not offering tea - because there was none - the real meaning began to sink in.
Yes, there is fecklessness. Bob's wife left him and took all the furniture. After he'd replaced the essentials, like beds and bedding, something to cook with and a chair to sit on, you could argue that he should have stopped spending money he didn't have. Instead, from loan company catalogues, he ordered Sky TV, a video, a microwave, a holiday and, yes, even a cuddly toy for his daughter. All these goods had a heavy mark-up, typically about 25 per cent, a big price to pay for not having the cash up front and having to pay on tick each week. He also took out a £200 loan with an £80 charge attached to it. When he still owed £100 (£80 of which was interest) he needed more money. He renewed the loan for £250 and after deducting the £100 still owed he got £150 in his hand. But his total loan now was £250 plus £100 charge. In effect, Bob is paying £180 for borrowing £350 and he is paying interest to repay the interest. This is the opposite of Alan Clark's definition of being rich: you can live off the interest on the interest.
You can knock the loan companies, but they are providing a service no one else is prepared to provide. The Government's own figures show that the poor are getting poorer in relation to the rest of the country and that there are more poor people around. The banks aren't interested in them and the latest figures show that the Social Fund, the last recourse to public assistance, turned down more than a million applicants for loans last year.
You can argue that the loan companies take cynical advantage. The trick is to hook the customers first with essentials such as bedding and baby clothes sold from vans in the street, "only £2 a week to pay". Then, when the tallyman's got his "in", there on the doorstep each week he or she (they're mostly local women these days) makes it known that money is available, too. Sadly, many customers accept that if they want things this is the only way they'll ever be able to get them. Millions of
people with no useful work to do each day sit at home trawling the loan company catalogues, dreaming about all the things they haven't got and think they should have. I told Bob that I didn't own a microwave or a hi-fi system and I managed to get by. He explained that he couldn't cook, and that the hi-fi stopped him staring at the four walls since he lost his job. Who was I to judge?
Then there are Christmas hampers. Karen had paid the agent religiously all year for a hamper full of meat. It cost £160. I suggested she could have bought the same meat in Leeds market for about half the price. She agreed. Thinking of filming it, I offered her £160 and told her she would be quids in if she set off to the markets there and then. She refused, even though she and the family were eating elsewhere over Christmas. Hampers are a way of life and not to have one is somehow to be deprived.
Karen is also the woman who told me without a trace of irony that she goes to Netto's budget supermarket each week to save the pennies. Then, she said, she takes a taxi back. She's not the only one. She and others like her who don't have cars make the effort to save. But Netto's is far away and the family shopping is heavy. Poverty can be truly baffling.
But it is also depressing. Denise, the homeworker, simply cannot pay for the things she needs for herself and her 10-year-old son from her benefits. She has borrowed thousands of pounds over the years, and, she says, probably the same again in charges asshe kept renewing and renewing her loans. It started with borrowing for school uniforms. Then it was bedding. "I'd no sheets. I'd washed them so much they'd gone in holes. Then there was a rug to cover a bald patch in the carpet and a clock so I'd know what time of day it was." When you're long-term unemployed with no prospect of making extra money, life's little crises assume large proportions. Denise couldn't think of any luxuries she'd borrowed for, and I couldn't spot any i n her very bare house. She pays back the money she owes at £2 a week to keep the bailiffs from the door.
In Denise's area there's a credit union. It works on the co-operative principle of saving as you pay back loans. In effect, each member of the credit union is borrowing from the other, and the interest rates are very low. The trouble for Denise is that she has no money to save. "If I put 50p away, come some time during the week I might need that 50p for a loaf of bread."
It may not work for Denise. But the fact that there are now seven credit unions in Leeds shows how far the circle has come full close. The West Yorkshire region has strong mutual traditions. Many of the country's leading building societies originated there. But the conversion of the Halifax to a bank, and its takeover of the Leeds Permanent right there in the city says it all. Just as the families had to help themselves before the Welfare State, so they are learning to again. In Bramley at the local collection point of the credit union in a church hall, there is a sense of the "community" spoken of so fondly by politicians. Did they ever intend, though, that it would be born again, as it often is in Leeds, out of abject need?
Su Pennington's report for `Public Eye' will be broadcast on BBC2 on Tuesday at 8pm.Reuse content