Justice and the Cost of Living Crisis

 
 

OUR ASK …

We believe that the government should enact emergency legislation to suspend enforcement action in the courts during this cost of living crisis.

Taking this emergency step will ensure the Courts are not required to give judgement or enforce orders against families who are effectively (but hopefully temporarily) completely unable to meet their financial obligations.

  • The immediate suspension of all petitions for judgement in housing possession or debt cases, including County Court Judgements, Liability Orders, Possession Orders

  • The immediate suspension of applications from energy companies seeking enforced installation of pre-payment meters or disconnection

  • The suspension of all new or existing enforcement actions, including bailiffs warrants, attachment of earnings orders and deductions from benefits

  • The suspension of all action to enforce fines in criminal cases and the careful consideration of the advisability of imposing fines upon insolvent offenders.

  • The immediate adoption by Local Authorities of the Council Tax collection good practice guidelines

BACKGROUND

Inflation is currently running at almost 10%, but incomes are not increasing at the same rate. For example, welfare benefits increased by 3.1% in April 22 and pay dropped by 3% between April and June 2022.

The average family's capped cost of electricity and gas rose from about £1100 in 2019 to almost £1300 in 2021, but in April 2022, it rose by nearly 50% to £2000. The price cap is expected to increase again in October to £3,500 and in January 2023 to £4,300. In some cases, that will mean energy bills consume 100% of a single person's Universal Credit income after their housing costs.

If inflationary increases in food and other essentials are added to household expenditure, we'll see low-income families become insolvent. Even if the projected rises are delayed, these families do not have the income to balance their budget.

Much attention is being given to various ways of remedying this situation by reducing taxation, making payments to consumers or delaying the next price rise. These are all valuable ideas, but they do not deal with the problem that will be met by Courts and other agencies who would normally be expected to make orders to enforce debts owed to commercial creditors or public bodies.

Such action would ensure that unrealistic public policy demands will not worsen the impossible burden borne by insolvent families.

  • It would improve the quality of life and wellbeing of the millions who face the prospect of going into debt for the first time through no fault of their own by throwing a protective legislative ring around those of us most exposed to the impacts of the cost of living emergency

  • It would save lives by giving some hope to people who believe that suicide is the only escape from an impossible financial predicament.

  • It would also save the already overburdened courts system from a deluge of computer-generated claims by creditors for judgements that – if made - would be so unrealistic as to bring the justice system into disrepute.

  • It would protect the overstretched NHS (especially primary care) from an epidemic of people who could not cope with the anxiety that they had imposed upon them.

  • It would protect against the possibility of a generalised alienation in which civil disorder became attractive to many law-abiding citizens who felt powerless in the face of impossible dilemmas.

PRECEDENTS

Such action would not be without precedent. During the recent Covid-19 pandemic, possession actions were not allowed. The government recognised that the economic effects of lockdown on family budgets were such that Furlough and other schemes were necessary.

During the financial crisis of 2009, banks considered “too big to fail” were rescued by enormous Government investment to prevent the collapse of the entire economy. In the current situation, the good order of the national economy is threatened with collapse, not by the insolvency of a handful of huge businesses but by the cumulative effect of the insolvency of tens of millions of households. The combined impact of these personal crises will be an economic and social crisis on the scale threatened by the collapse of the banks, which followed their ill-advised investments in US sub-prime mortgage derivatives.