Businesses are screwing a ‘poverty premium’ out of Britain's poorest and ATM charges are part of the problem

There are myriad other ways in which extra costs are loaded on to the poor to fatten capitalist coffers

James Moore
Wednesday 01 May 2019 13:37
Athian Akec speaks out against austerity in the national youth parliament

The latest example of big business squeezing the poor was unveiled by Which? this morning courtesy of a report showing that 1,750 ATMs have started charging fees since the beginning of the year. Some 1,250 switched over in March alone, representing 2.5 per cent of the estate.

The consumer group’s research has found that this inevitably hits the poorest and most vulnerable groups in society hardest.

They are more likely to use cash and less able to switch to alternatives if their local machine starts charging. The fees exert a further drag on budgets that are already under strain.

Through them, the financial services industry has found a handy new revenue stream, and cashpoint providers are falling over themselves to join the party. Having spoken to the leading providers, Which? fears another 5,000 machines are poised to follow suit. Goodness only knows how many people will see cash ripped from threadbare pockets as a result.

Wanda Wyporska, executive director of The Equality Trust, describes charging people to get hold of their own money as a scandalous practice that ought to be stopped. And it is scandalous.

But as she points out, it’s only one contributor to what has become known as “the poverty premium”, the thumbscrews Britain applies to those who have the least. It’s far from the biggest and it isn’t just financial companies that are profiting from it.

There are myriad other ways in which extra costs are loaded on to the poor to fatten businesses’ coffers. Energy, in particular, is more expensive because people on low incomes are often reliant on pre-payment meters. The best deals are typically denied to those that use them.

Credit is far pricer if your only option is to call upon the services of a payday or door-to-door lender, or a pawn shop. Rent-to-own stores have had their prices capped, but people forced into the position of using them still pay more for household goods.

The loyalty penalty companies such as insurers impose upon on their existing customers at renewal hits the poorest hardest. You need a card and reliable broadband to take advantage of cheaper online shopping. Bulk purchase discounts aren’t available to those without storage space that one is a big contributor to the “nappy poverty” affecting a rising number of parents.

Fair By Design, a campaign that aims to end the poverty premium, puts the average excess paid by low income households at a staggering £491 annually. That’s on top of the privations imposed by government, such as the benefits freeze and the botched imposition of universal credit. Small wonder that the use of food banks has been growing at such a pace. Britain is kicking the poor with steel toe cap boots.

The campaign has, however, put together a comprehensive road map for addressing the issue with recommendations for businesses, regulators and the government.

What it makes clear is that the poverty premium isn’t inevitable. It is only there because the people that could address it are choosing not to, particularly those in government whose intervention is essential if Britain is to call last orders on poverty profiteering. Businesses won’t do it by themselves and their regulators need to know they have the support of their political masters.

The Social Mobility Commission yesterday warned that inequality will remain entrenched in this country “from birth to work” unless ministers act. The poverty premium is no different.

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When Theresa May took office, she claimed that she was determined to tackle Britain’s “burning injustices”.

Instead, all her energy has been focussed on ramming through an unpopular Brexit deal (one that could pass tomorrow if she would only offer the people a vote on it) in an attempt to secure her place in history. The poor are thus being sacrificed on the altar of her personal vanity.

Meanwhile, the brushfires she promised to tackle are continuing to spread. The cashpoint ripoff is just the latest splash of fuel onto what’s becoming a raging inferno.

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