Growing up in Newcastle in the sixties and seventies there were only two topics of conversation in our house – politics and football. My Mum was as committed to Newcastle United as she was to Labour and she passed that on, my brother even played with Paul Gascoigne for Newcastle Youth team .
My mother was a strong woman, she had to be, bringing up three children on her own on a North Kenton council estate. Not much scared her. But I shall never forget the look of fear in her eyes when she talked about debt. When she was ill she would worry that we would not be able to pay for her funeral . I would say that if she left us we’d have a lot more to worry about than a few hundred quid of debt. But she would shake her head. She had grown up in Newcastle in the thirties, during the depression. She had seen what debt could do to hard working families thrown on difficult times.
So when Newcastle United announced that the pay day loan company Wonga would be sponsoring I was horrified. Newcastle has some of the highest levels of unemployment in the country. Government cuts have hit us particularly hard, changes to welfare are impacting many families and even those in work face falling pay packets as energy and food bills soar. Across the country, workers earn on average £1,477 less than in 2010. So many are living on the edge, if the washing machine breaks down or a child needs new shoes they have to rely on foodbanks to eat. Only last week I met a man at a drop in centre who had learning difficulties – and the little money he had was going on pay day loans.
Could it really be true that some of the richest men in the city, the ones every kid looks up to, were going to be telling us to get a payday loan?
Wonga’s APR is 5,835. They say that is not a fair measure because their loans never last a year, it is like comparing apples and pears. I say that is why we invented the kilo. APR is a standard that allows us to weigh up all the different ways of borrowing money from payday loans to thirty year mortgages. Wonga do not like it because it makes clear the undeniable truth, their loans are incredibly expensive.
That is how they make the money for clever marketing campaigns on TV, on the internet, on buses and on our favourite football team’s shirt.
Wonga like to present themselves as a technology company. As an engineer who has worked in technology for 23 years I have nothing but contempt for those who use technology to exploit and oppress instead of empowering and enabling. Why don’t Wonga’s use their technology to give savers sky high interest rates?
That’s why Wonga aren’t just another Virgin Money or Northern Rock as some say. They don’t offer savings accounts, all they offer is debt, debt and more debt.
They want us to believe that debt is normal. It may be unavoidable at times but it should not be a way of life. The traditional North East values of earning your keep and paying your own way are the ones we want to pass on to the next generation. After the debt fuelled financial crisis got us into this mess in the first place, do we really want payday loans to be Newcastle’s special brand?
On Monday Newcastle Fans United hosted a debate with Wonga, myself, the club and the Citizens Advice Bureau. It was a good discussion, Shona Alexander from CAB explained that debt enquires in Newcastle are up 500%. Wonga said that they are in Newcastle for the long haul, that they want to make a contribution, that they expect to change.
I hope they do, but they have a long, long way to go before I’ll be happy to see that shirt at St James’.