Thought for the Week: The Fox Report - Borrowing
Judy Kirby introduces The Fox Report on borrowing
The fear of being accused of bringing vermin into new houses seems to be sufficiently strong to make some housewives undertake instalments on new beds for the whole family – from a 1939 survey of a Birmingham municipal estate
Debt has been with us for a very long time. From Roman temple lending to hire purchase agreements, buying things with other people’s money has always had a following, and not just among poor people. In the report Women and Credit Trading, prepared for the International Co-operative Women’s Guild and adopted in 1933, the authors noted: ‘it is well known in the big shops that it is often the wealthiest women who expect the most credit, and in co-operative societies too many women who could afford to pay cash far better than many cash customers are yet found buying regularly on credit.’ Those authors disapproved of credit and hoped Co-operative women would work for its abolition.
I come from a generation with an ambivalent attitude to borrowing. Our parents and parents before them scorned the ‘never-never’ but as we grew up another attitude was materialising among our peers – ‘if you wait until you’ve saved up for something, you’ll never have anything’. The period between our parents’ deeply-entrenched debt avoidance and the early shoots of credit acceptance was not really very long.
In the early part of the 1930s owning your own home was alien to most working class people. Taking on huge long-term debt frightened them, as fear of destitution was ever present in their minds. But, as recounted by professor Peter Scott, in a paper for the Henley Business School, by 1939 significant numbers of them lived in their own homes on housing estates ‘enjoying broadly similar lifestyles to the lower ranks of the middle class’. Successful mass marketing campaigns by the building industry and building societies stressed the affordability of ownership and the modern, aspirational lifestyles that it offered. This played ‘a significant role in extending the limits of “consumer citizenship” to this group’. For, once inside bright new homes, people changed their buying patterns; spending less on food and heating but more on conspicuous items like furniture and clothes. The seduction of credit had begun and heralded social changes, which only briefly halted for the duration of the war.
But, is this fatal attraction about to reverse? The Fox Report asked two financial analysts to search for any evidence that attitudes to borrowing as a way of life were changing. Are people going off credit? Economist Howard Reed looked for signs in statistics; journalist Patrick Chalmers, a former Reuters finance reporter, sought attitudes on the street.
Howard sensed a turning point was being reached, whereas Patrick heard stories of people locked into debt and borrowing more in order to stay afloat. But if the economy recovered and employment revived – and their circumstances improved – would they still maintain their credit habits? Is the recession merely an interlude in a society addicted to living-on-credit?
Even with this reservation Patrick also senses that the British appetite for borrowing is being tempered.
The Fox Report is the investigative arm of the Friend. It is funded by the Joseph Rowntree Charitable Trust and co-edited by Judy Kirby and Ian Kirk-Smith.
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