Friends should not be cashed in

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NEARLY 25 years ago, at a time when I was in truly desperate straits at the bank, a friend lent me pounds 500. It was a lot of money in those days. I hadn't asked for the loan nor did he ask for it back, beyond saying, in a generously vague sort of way, 'One day, when your ship comes in . . . .' I never paid it back, and he and I have since lost touch. (John, if you're reading this, contact me and we'll discuss the interest rate chargeable over 25 years of an unsecured loan.)

I was reminded of this incident by a remark made by the American actress Jodie Foster in this month's Tatler. 'A long time ago,' she recalls, 'I had a friend who was in really bad shape. He said to me, 'I really need to borrow some money'. I said, 'OK, but if I lend you the money I can't be your friend any more'. He said, 'That's totally ridiculous] What do you care, it's only dollars 500,000'.' (At this point I might have remarked that there's nothing 'only' about dollars 500,000, as he himself was currently discovering, but let that pass.) Ms Foster concludes: 'I told him, 'I'll give you the money, that's fine, just know you don't have my friendship'. That's my own morality. . . .'

Not only do I agree entirely with those views, but Ms Foster made me realise that borrowing pounds 500 may have cost me that particular friendship, and while it saved my bacon in the eyes of the bank, I'd rather have a friend than a bank manager any day.

The argument changes when it comes to family, since you can't say, 'OK, sweetie, I'll give you the money, but you won't be my sister any more.'

Some years after the pounds 500, when I was still desperately hard up, my sister 'gave' me pounds 25 a week for 18 months, until my financial situation had eased and I was able to start paying it back. She did it with exemplary tact, tucking the money under a corner of my bedroom carpet rather than handing it to me directly, so that I did not have to tie myself into knots of gratitude every week. It meant I could go on being her sister (gossipy, bitchy, giving and needing advice, lending clothes, swapping recipes) as usual - only somehow it didn't quite work out like that.

The balance of sibling life had shifted subtly. I felt I had lost the authority of being five years older, and I didn't like it. I also felt I no longer had the right to be honest with her, let alone critical. Our relationship had changed in some indefinable way, and it took years to get it back on an even keel. I resented needing to accept money from my younger sister, and having to pay it back, while she probably resented just as much having to lend it to me in the first place.

I remember this if ever my children ask to borrow money, preferring, if I can, to give it. Sometimes the gift takes convoluted forms. I bought an old computer from my son for pounds 300, knowing it wasn't worth a tenth of that, because it meant a transaction had taken place that left both of us with pride intact.

Barbara Mills QC was less fortunate when she lent pounds 6,500 to her son-in-law. Repayments were running smoothly until he and her daughter separated, whereupon the aggrieved mother asked for the whole sum back, and went to court to get it. With interest and inflation, she claims that his debt now comes to just over pounds 9,500. He contests the claim. Both sides are locked in litigation and bitterness.

Even more notoriously, the two eldest children of the multi- millionaire Lord Palumbo are taking their father and step- mother to court over their family trust fund, from which they claim their father has misapplied pounds 30m. Spoiled brattishness and greed contaminate this case (why should a pair of able-bodied 30-year-olds have the benefit of pounds 70 m that they have done nothing to earn?) and, as usual, only the lawyers will benefit in the end.

To me, it is a matter of some pride that I earn my money. Everything I possess has been bought by the labour of hand or brain - brain, mostly, since I'm no good with my hands. (But my first job after coming down from Oxford with a brand new PPE degree was as a cleaner, and I cleaned for six months before my employer's husband recommended me for a better job.) I have never inherited money or benefited from a trust fund, nor even stocks and shares. This entitles me to spend my money as I choose, and with a relatively clear conscience.

There are people for whom money is like tapwater: you need it, you turn it on. They are usually people who have inherited wealth, and the notion of having to work for it prompts them to fastidious disdain. Such people, curiously enough, are often extremely mean. (The doorman at the Dorchester once told me that they were the worst tippers. The people who tip most generously are those who have saved for a once-in-a-lifetime spree, or have known what it is to be poor.)

I don't think I'm mean; on the contrary, I know I am extravagant (though my 'Spend no money in 1994' campaign is working pretty well). So, if I can spare it and a friend needs to borrow money, I'd rather give it to them, keep their friendship, and - let's be honest - bask in a warm glow, than try and work out 5 per cent compound interest on pounds 500 over 25 years.