Fair Credit for the NHS

Last year in Newcastle I joined a local Sharkstoppers organising group put together by Movement for Change in response to the sponsorship of Newcastle United FC by Wonga. There’s nothing like football to bring people together in Newcastle! (I’d better add that I’m a Middlesbrough fan, a club which is in fact sponsored by Ramsdens, a pawnbrokers, so it isn’t much better!). After listening to the views of people out and about on a chilly February morning at local Newcastle landmark Earl Grey’s Monument, we decided to focus on improving access to fair credit. Our actions culminated in negotiating with the local Credit Union to offer more payday loans over the year ahead.

And this aim, replicated in other parts of the country from Walthamstow to Swansea, is now being scaled up.

Nationally, we have already won big. After getting the Labour Party to commit to capping the cost of credit, we celebrated as George Osborne followed suit not long after.

The cap on the cost of credit will come into force in January 2015. But we know that capping the cost alone won’t solve the whole problem.

To help spread access to fair credit as an alternative to payday loans, Sharkstoppers is now calling on the National Health Service to offer all members of staff payroll deduction to their credit union.

Credit unions are member led organisations which offer savings accounts and a range of loans depending on how long a person has been saving. They are regulated by the Financial Conduct Authority and part of the Financial Services Compensation Scheme. Profits are re-invested in running the business and can be shared between all members as a dividend. Many have their origins in the heart of local communities and are available for anyone to join who has a “common bond” with them – usually this means living or working in a certain area, or working for the same employer. They operate ethically and can therefore offer a fair alternative to banks and high cost lenders.

Payroll deduction is a feature of all our payslips. Our taxes are deducted before we see a penny, and employers often have schemes for buying travel passes or for charitable giving where money is deducted before our wages reach us. Payroll deduction for savings and loan repayments is just the same with a credit union.

The NHS is one of the biggest employers in the world, with over 1.7 million employees. Offering a payroll service to those employees would have a huge, transformative impact.

It would raise awareness of credit unions as a place for safe savings and lower cost loans. It would help to build the capacity and resilience of community credit unions, and the movement as a whole.

It would also help to build the financial resilience of the NHS workers themselves. And would set a shining example to employers across the country.

Strong, accessible credit unions can support whole communities and workforces. The NHS, our treasured national institution and the biggest employer in Europe, helps improve the lives of so many people every day. With this one simple, easy adjustment to its payment procedures, it could extend that positive impact even more.

Coupled with our other national aims, for example asking the FCA to ban payday loans during children’s television and stopping legal loan sharks selling customer data to each other, Sharkstoppers is carrying on the fight for a fairer credit market.

You can pledge to take action with us here.

Alison Baxter is a member of the Sharkstoppers National Strategy Team