Life After Debt

Deanne Ferguson, Labour’s candidate for Morley and Outwood, on how debt nearly destroyed her life and why the party needs to wage a campaign against debt collection agencies.

I did everything that you’re told to do in life. I left school with good qualifications, got a job, and started making my own path. I decided to move out of my family home when I was a little over 16 and rented in Outwood, Wakefield.

I’ll always remember the first shop I ever did. I went around to Morrisons buying all the food my parents wouldn’t let me eat, then when I arrived back home to pack the shopping away I realised I had the smallest fridge-freezer known to man!

After the freezer mishap, life ran pretty smoothly for a few years. Work was going well, I was enjoying my freedom. Everything seemed fine. My next memory was passing my driving test. Being a new driver, the insurance was high so I thought I’d call into the bank and get an overdraft: a safety net, should I need it.

I don’t remember ever having any conversations or being taught at school or at home how to manage money. We never really discussed any of that. One Saturday morning at 18, I walked out of the bank with the £500 overdraft I’d requested, plus a £4,000 loan and a credit card. I was earning just under £14,000 a year. I had doubled my outgoings within an hour’s visit to the bank.

At the age of 21 I was pregnant with my son. Still living in a rented flat my dad pushed the message home that I should look to buy a house. Dad always said, ‘you should be saving for a house. It’s about bricks and mortar, Deanne.’

I didn’t realise just how much Thatcher’s right to buy scheme and its right-wing ideology had changed my family, but it did. It was much deeper than I ever thought.

In early 2006 I was accepted for 98 per cent mortgage. I was now earning a little over £18,000 per year and the home I’d just bought was worth £120,000. My dad loaned me the other 2 per cent on the condition that I paid him back when I sold the property. I was now 22 with a six-figure mortgage debt, finance on a car, an overdraft, credit card, and a baby. I had no idea what was hurtling towards me.

Looking back, this was the point my life changed and that downward spiral began. I was no longer young, free, and independent. I became trapped by the capitalist system we all live under, shackled by the debt I had accrued.

After six months of maternity leave, I couldn’t afford the drop in income so I returned to full time work. I managed to find a nursery just round the corner but because my son was only six months old the fees were £750 per month. This was a cost I’d never budgeted for and, even with tax credits, I began to struggle.

For the first time, I remember barely being able to make ends meet. I began missing payments on bills I’d always been able to maintain. Then it happened. At the same time as becoming a lone parent, the 2008 financial crisis hit.

Only recently did I really understand how the crash had impacted on me, Deanne Ferguson, this 24-year-old from Wakefield. I came home to a letter: my fixed rate mortgage was ending and the interest rate was increasing. My payments weren’t just going up, they were doubling.

Already, I only had fifty pounds a month left after all my bills. There was no way I was going to be able to afford this. Weeks later, after failed attempts to agree a way forward with the mortgage lender, I came home to a letter saying I had lost my home.

I will never forget that feeling. It was the lowest of my life. I felt like I had failed my son, let my family down. Like so many people in my constituency, I had been doing my best. But on the back of the financial crisis in 2008, I lost the house my son and I called home.

Today, I understand the political decisions that led to my situation. The economic system is rigged against working-class people. It has seen deregulation of the financial sector as governments like our own gave banks an increasingly free rein over our economy.

We are still living under that system. Personal debt of the kind that led to the 2008 crash is now higher than pre-crash levels. Financial interests still prey upon vulnerable people. Working-class lives are traded for a profit, putting a millstone of debt around the necks of so many people in communities like mine.

I spent the next ten years battling with landlords and debt collection agencies. As much as I tried to keep on top of things, debt kept stacking up. It felt like as soon as I paid one bill another was there waiting. Most months I was robbing Peter to pay Paul. I was in quicksand. The anxiety and stress debt causes is cruel and callous.

Sadly, the most aggressive debt collectors were those employed by my local authority. I became exhausted with the letters and stopped opening them. In reality, I was frightened to open them. The fear of what was inside superseded any rational thinking, and opening the letters wasn’t an option.

But then the knocks started at the door. All hours of the day and night I would hear the intercom ringing. People waited at my car, demanding money. I was paying every penny I had but it wasn’t enough. I remember spending school holidays with the curtains drawn, fearful of going out.

When I tried to call my local authority they wouldn’t listen, because my debt had been passed to a private collection agency that profited 40 per cent for their part in the damage and trauma they were causing me and my young son.

Eleven years later, those memories still haunt me. The journey has been tough, but it has also helped to shape the person I am today. If you told me then I would be the Prospective Parliamentary Candidate for my home constituency, and have a chance to help others suffering the burden of debt, I never would have believed you.

I have seen and experienced first-hand the power of politics and collective action to change people’s lives — for better and for worse. Speaking about debt remains a taboo in our society. We have to change that. Why are we not shouting about how a society that allows huge profits to be made from people’s suffering is failing those it should protect?

In 2017, British households spent £900 on average more than they received in income. The Money Advice Service (MAS) estimates that 8.3 million people in the UK are over-indebted, and that 22 per cent of UK adults have less than £100 in savings. Average UK household debt is now at a record £15,400. It’s no wonder that the market for payday lenders is growing — alongside the misery their practices cause.

You don’t need to tell most working-class people why the situation is so bad. Wages have stagnated for years — the longest period, in fact, in over 100 years. The job market has seen an explosion in insecure work, with zero hour contracts only the tip of the iceberg. Meanwhile, the cost of living has risen with rents, especially, bleeding families dry in many parts of the country.

The Labour Party must give people who are struggling with debt a voice. That’s why I’m calling on every Labour-run local authority to stop using bailiffs and debt collection agencies. It’s time our party adopted a more ethical approach to collecting debt from the millions of working-class people struggling in this economy.

Unmanageable debt causes people enormous stress, lasting damage to mental health, and a greater risk of poverty. The use of bailiffs in a system built on debt criminalises those struggling to pay their bills every month, while propping up the system that exploits them.

On the doorstep I have spoken to many families who keep the curtains drawn for fear of going outside. They live under constant harassment from their debt collector. In most cases, the agency is Equita and their client is Leeds City Council.

In one case, a family had fallen behind with their council tax. They worked long hours and struggled to get through to talk to anyone at the council about it. Letters arrived demanding payment but when they did manage to make payments they found out that a further amount was outstanding. Forty per cent, it turned out, was taken for collection fees. The cost of sending out a bailiff was another £400.

Recent examples show that alternatives can work. Hammersmith and Fulham Council stopped using bailiffs and debt collectors in 2017. Their model is built on early intervention, community support, and communication — and in the first year the council saw an increase in its collection rates. We should explore ways to roll this out across the country.

But we can’t allow councils alone to take the blame for this problem. Boris Johnson recently visited Wakefield, where I’m standing to be the next MP. Against a backdrop of police officers, the new prime minister wanted to give the impression that he would invest in public services.

Strangely enough, he failed to mention that Wakefield is the fourth ‘most cut city’ in Britain since the Tories came to power in 2010. A recent Centre for Cities report found that Wakefield had seen 53 per cent cut from budgets, roughly £484 less for every man, women, and child in Wakefield.

After almost a decade of Tory austerity, is it any wonder local authorities are resorting to using debt collection agencies and bailiffs to claw back money in things like rent and council tax? But now is not the time for excuses. As we face into a general election, we must promise to radically transform the lives of the millions of people in Britain struggling with debt.

That’s why I’m also calling for a moratorium on increasing fees by debt collectors. The horror stories being told by too many working-class people facing cowboy practices by vigilante companies demand an urgent enquiry. In the meantime, we can’t allow increases of 40 or 50 per cent to be inflicted on families who are already suffering.

I remember those nights when I was woken up by a phone call, the fear I felt whenever a new letter would come through the door. I remember the intimidation of debt collectors waiting at my car as I left home with my son. If the Labour Party being in power means anything, it has to mean that people aren’t forced to live their lives like that.

If we are to build a society built on compassion, democracy, and equality, we must start now. Labour-run councils should sign up to an ethical charter, putting people before process, ending the need for bailiffs, and debt collection agencies.

And the next Labour government must be committed to tackling Britain’s debt crisis, taking on predatory financial institutions that cause so much misery, and giving the more than 8 million people in this country in serious debt the help that they need to keep their heads above water. That would be the kind of socialism the working class could truly get behind.