POLICIES TO FIGHT POVERTY Officially, the level at which one is considered to be living "in poverty" is 60% of the median income -- even though many people living at this level do not consider themselves to be "in poverty". After all, one can have little money but be living in relatively stable circumstances. For some elements in politics, the cause of poverty is obvious: "The poor are poor because the rich are rich" and the answer is "soak the rich!" But it's not that simple. This is a mistaken way of understanding the complex issue of poverty, based on a false understanding of the nature of both money and people. They believe, wrongly, that money is finite. They imagine there is only so much of it to go around and "the rich" have confiscated most of it for themselves. However, in reality, money is infinite, and as we emphasise as a central part of our manifesto banks create it on demand and out of nothing for their own private profit, every time you take a loan! Furthermore, theirs is a "reductionist" view, in the sense that it reduces poverty to one cause alone -- a matter of finance. Of course, money is at the centre of all things, but a programme to tackle poverty needs to see it within a framework encompassing all the major issues in society, including in some instances, matters of personal responsibility. STRENGTHENING THE SOCIAL FABRIC Solutions are bound in with stable families, good education, pleasant environments, including the intrinsic ability of the inhabitants to maintain these good environments, and a law and order system in which everyone has confidence, and where those whose behaviour drags society down are dealt with appropriately. When this social fabric is strong then the chances of people and communities falling into poverty are reduced. Therefore, attacking poverty isn't just about ensuring welfare policies which help the poor, but about attacking the viruses which damage the social fabric in the first place: the tax policies which break up families or prevent families being formed, the education methods which don't work, the laws which allow drug dealers and criminals to walk free, and the architecture which isolates people and encourages criminality and environmental decline. Here are some policies which address specifically financial aspects of poverty: POLICIES TO HELP LOW-INCOME COMMUNITIES Extend Free School Meals to the 77,000 children estimated by the Child Poverty Action Group (2 March 07) to be living below the poverty line in Scotland. Increase Tax on Banking and Speculation Profits with the money ring-fenced for public projects in specific areas of poverty. Develop Concept of Citizens Income Encourage a study into the feasibility of a Citizen's Income as a right to all, which would replace many of the existing benefits and potentially simplify the system. This would be for British citizens only. Proponents say it would offer true freedom of choice via a lifetime's entitlement, which would not be means-tested and which would be the same for every citizen. A Local Income Tax to replace Council Tax, with people on incomes of less than £15,000 a year exempt. Investigate the Abolition of Credit Advertising. We have to be careful about "banning" things we don't like for two reasons. One, it encourages a lack of personal responsibility. After all, one doesn't need to act on the credit advert, just because one has seen it, anymore than one has to smoke or drink as a result of advertising. However, we also acknowledge that there are vulnerable people who do not have the ability to be "personally responsible" and, to an extent, require to be protected from exploitation. The second point to note is that when you ban something, it can reappear in another form, which can be just as harmful. Mandatory Clarification of Loan Terms What we really need is clear, enforced clarification of what the loans mean. The aim should be to give people all the information they need in order to allow them to take proper responsibility for their own lives. Indeed the "free market" requires the consumer to be informed! At the moment, people are being deceived. For example, instead of "6% per month", it should be clearly stated what this amounts to each year. We need to show the annual interest rate with a proper explanation, in all credit advertising and credit statements, in large bold text. A Legal Cap on Interest Rates The poorest households are increasingly turning to doorstep lenders charging high levels of interest. The campaign group Debt on our Doorstep has said that rates can be as high as 177% and that almost anyone is able to set up as a lender provided they have an easily obtainable consumer credit licence. Amazingly, the UK is virtually alone amongst developed economies in not having any form of legal cap on extortionate interest rates. We need tough new laws against extortionate and irresponsible credit lending. An interest rate cap would be gradually introduced to prevent complete market disruption and would be based on interest, loan duration and repayment method, to allow for different product options. See the report Profiting from Poverty: Why debt is big business in Britain. Support Credit Unions These can help prevent people drifting into the hands of illegal money lenders and getting trapped by mountains of debt. We need a £250m boost to promote low-interest credit unions and other community finance initiativesin order to provide affordable alternative sources of credit. There is a concern that the £3 billion Home Credit market is dominated by 4 companies who between them control 79% of the market. Yet, if the government helped credit unions become more actively involved in this market place then the companies who presently dominate would be forced to reform their practices and cut their charges. Curb Automatic Teller Machine (ATM) Charges We need the promotion of socially responsible service provision by the banks. Charging people to take out their own money is immoral, but the trend towards fee-charging ATMs increases as local banks close. The poorest communities are often the hardest hit by such bank and amenity closures, at the same time as they are encouraged by the government to have their benefits paid into bank accounts.