by Paul Goodman THE Movement for Christian Democracy (MCD) took a further step towards the centre of political debate with the publication of its first policy paper, Escaping the debt trap, earlier this week.
Christopher Graffius, who sits on the MCD's steering group said: 'the subject was chosen because of the scale of personal debt in Britain and the lack of action to solve the problems of those trapped by multiple debts, many of whom disappear from the 'respectable economy' while their personal situation often causes misery and social deprivation.
"It was also considered important to evaluate the last decade which saw the largest credit boom in British economic history."
The paper, according to coauthors Alan Storlcey and Andrew Hartropp, who are members of the MCD's economic policy group, "stems from a growing concern about the number of people deep in debt in Britain today and about the suffering it causes to individual debtors and families. The situation is urgent; continuing real high interest rates, record levels of business failures, rising unemployment and falling asset values suggest personal debt problems can only worsen.
"Credit has become a way of life today. Nearly three quarters of Britain's 21 million households use some form of credit for consumer purchases whether it is by means of a credit or charge card, store card, bank or building society, loan or mail order.
"The total amount of outstanding consumer credit (excluding mortgages) at the end of 1990 was E50.6 billion, 3.5 times its cash value at the beginning of 1982. After adjusting for inflation this still represents about 2.2 times the 1982 level.
"This is an average debt of 11,080 per adult member of the population (16 years old and over) or an average of £2300 per household, compared to just under /700 at the end of 1981. Two-thirds of this credit is held in the form of bank loans. Bank credit cards, finance houses, and retailers are other important sources."
The paper places some responsibility at the door of the government: "quite a few government policies in the 1980s have contributed to a greater disparity between rich and poor and a relatively rapid impoverishment of many.
"These include changes in income tax, family credit, poll tax, capital transfer tax, income support, VAT, national insurance contributions and benefits in kind...the net effect of these processes is to undermine the resource base of those who might especially need to borrow, and their relative ,poverty is an important contributory cause of heavy indebtedness."
A Christian understanding of indebtedness, the paper says, "gives priority not to the profits of the bank, but to the reciprocal relationships of love and fairness of borrower and lender. This gives a subtle, but substantial difference to the focus of financial transactions like selling credit and debt repayment.
"It reflects a communal responsibility and generosity towards borrowers who are economically weak. They need resources to live."
The paper recommends the alteration of the current banking ethos; the establishment by banks of social lending; the extension of community banking and credit unions; the introduction of fixed real interest rates for building societies; measures to deal with "inertia and passive lending"; and the enlargement and improvement of the social fund.