COVID-19 crisis: Lab joins call for freeze on personal debt payments

The Lab has joined the Jubilee Debt Campaign and nearly 80 academics, policy experts and others to write to Chancellor of the Exchequer, Rishi Sunak, calling on him to provide an urgent, interest-free freeze on personal debt payments and a write-off of existing council tax and social security debts for people affected by COVID-19. The letter was covered in the Financial Times on Thursday 2 April 2020. You can read the full letter below.

We, the undersigned leaders of civil society organisations, trade unions and community groups, academics, and policy experts call on you to take urgent and immediate action to prevent the COVID-19 pandemic deepening the debt trap faced by millions of low income households, and pushing millions more into problem debt.

The UK already faced a profound and growing crisis of poverty, destitution and problem indebtedness prior to COVID-19. Over 14 million British citizens, nearly 20% of our entire population, were already in poverty: struggling to afford even basic living essentials like food, water, electricity and rent. Growing numbers have been forced to borrow from high-cost lenders just to put food on the table, and faced spiralling indebtedness as a result. Personal debt was at its highest ever level just prior to the COVID-19 outbreak, with over 9 million people in problem debt.

We strongly commend the action you have taken within the last week to protect incomes and prevent the pandemic leading to employers laying off workers. We particularly applaud the moves to guarantee wages through the job retention scheme and to uplift Universal Credit and Local Housing Allowance.

However, many thousands of layoffs have already happened despite the measures announced, with many more expected in the coming weeks. Even with the actions you have announced so far, our social safety net will be severely inadequate to support those who lose their work and incomes because of this crisis, as well as those already out of work or unable to work for health or other reasons, all of whom now face increased living costs because of COVID-19.

Statutory Sick Pay is at an unliveable rate of £12.50 per day. A decade of real cuts means that other unemployment and social security benefits are similarly not enough to live on, worth less today in real terms than they were in the 1990s. Across the board, from Universal Credit to Carers’ Allowance, our social security provisions are insufficient to meet basic living costs, pushing those who rely on them into poverty, or debt, or both.

This crisis highlights the wholesale inadequacy of our social safety net and its inability to provide for the welfare of citizens and the nation as a whole at a time of national crisis. It is incumbent on the government to urgently move to provide a liveable income guarantee for all, including the homeless and people with no previous recourse to public funds, removing all punitive sanctions and payment delays. Self-isolation from COVID-19 simply cannot be a privilege only some can afford.

However, even with further action, these delays and gaps in the Government’s support package mean millions are already facing a dramatic drop in their incomes. Given the existing debt overhang, a more comprehensive household debt write-off will be needed in the post-COVID period, to give families and the economy a fresh start. In the meantime, to prevent the further build-up of unfair and unsustainable household debt, we call on the government to:

Freeze repayments on all unsecured debt (including loans, credit cards, and rent-to-own finance), with no accrual of interest during the repayment holiday 

Those facing redundancy, loss of wages or other payment difficulties because of COVID-19 must be entitled to an immediate freeze on unsecured debt payments, similar to the mortgage holiday extended to homeowners, with no interest accumulated during the repayment holiday and no impairment of credit records.

Freeze utility, rent and council tax payments, with no build-up of arrears 

More help must also be made available to impacted households in respect of council tax, rent and utility bills for those who need it, to ensure there is no build-up of arrears on these accounts. Central government should:

  • Fund local authorities to provide 100% Council Tax Support to impacted households;
  • Require landlords accessing mortgage holidays to pass that holiday onto tenants;
  • Fund local authorities to make additional discretionary housing payments where rents are still required and cannot be paid;
  • Provide help with gas and electricity costs by, for example, broadening the scope and assistance provided through the Warm Home Discount Scheme.

Write-off council tax and social security debts 

We welcome your move in the Budget to ease the burden on households of unfair council tax debt. In the face of COVID-19, it is essential to go further and provide breathing space to households under pressure by writing off the council tax debt and debt for overpayments of child benefit, working tax credit and Universal Credit: debts which, in a vast majority of cases, households have not intended to incur and which thousands are struggling to repay. Again, there should be full reimbursement to local councils by the government for resulting revenue losses.

Suspend all debt collection and enforcement activity with immediate effect 

Broadening the Government’s pledge to protect renters by suspending all evictions, we call on the Government to suspend all collection activity on household debts and all enforcement activity by bailiffs, enforcement agents, and others.

Without this package of measures, the economic recovery from COVID-19 will be severely suppressed and millions more households will be pushed into the poverty, destitution and indignity of the growing household debt trap.

We call on you urgently to act.


  1. Dr. Alexander Guschanski, Lecturer in Economics, University of Greenwich
  2. Dr Andreas Antoniades, Senior Lecturer in Global Political Economy, University of Sussex
  3. Andrew Jackson, Research Fellow, Centre for the Understanding of Sustainable Prosperity, University of Surrey
  4. Andrew Denis, Fellow Emeritus, Department of Economics, City, University of London
  5. Ann Pettifor, Director, Policy Research in Macroeconomics
  6. Anna Laycock, Chief Executive Officer, Finance Innovation Lab
  7. Anna Vickerstaff, UK Team Leader,
  8. Anne Funnemark, Campaign Director, Jubilee Scotland
  9. Asad Rehman, Executive Director, War on Want
  10. Beth Redmond, Organiser, Tenants Union UK
  11. Dr Bruno Bonizzi, Senior Lecturer in Finance, University of Hertfordshire
  12. Caroline Molloy, Editor, Open Democracy UK
  13. Dr Christopher Harker, Associate Professor, Institute for Global Prosperity, University College London
  14. Dan Wilson Craw, Director, Generation Rent
  15. Dr David Harvie, Associate Professor of Finance and Political Economy, University of Leicester
  16. Damon Gibbons, Director, Centre for Responsible Credit
  17. Dr Daniel Ozarow, Chair, Jubilee Debt Campaign Academic Advisory Network
  18. Debbie Webster, Manager, St Anns Advice Group and the Chase Neighbourhood Centre, Nottingham
  19. Professor Deborah James, Department of Anthropology, University of Bristol
  20. Dr Deborah Potts, Emeritus Reader in Human Geography, King’s College London
  21. Dr Dianna Smith, Lecturer, School of Geography & Environmental Science, University of Southampton
  22. Fanny Malinen, Director, Research for Action
  23. Fran Boait, Executive Director, Positive Money
  24. Dr Hilary Powell, Co-Director, Bank Job / Optimistic Foundation CIC
  25. Professor Hulya Dagdeviren, Professor of Economic Development, University of Hertfordshire
  26. Ian Hodson, National President, Bakers’, Food & Allied Workers Union
  27. Imogen Richmond-Bishop, Coordinator, Right to Food project
  28. Irene Audain MBE, Chief Executive, Scottish Out of School Care Network
  29. Isaac Rose, Coordinator, Greater Manchester Housing Action
  30. Jamie Burton, Chair, Just Fair
  31. Professor Jan Toporowski, Department of Economics, SOAS University of London
  32. Dr Jason Hickel, FRSA & Senior Lecturer, Goldsmiths, University of London
  33. Dr Jeff Powell, Senior Lecturer in Economics, Faculty of Business, University of Greenwich
  34. Dr Jo Michell, Associate Professor of Economics, University of West England
  35. Joel Benjamin, Debt Resistance UK
  36. Professor John Holmwood, School of Sociology and Social Policy, University of Nottingham
  37. Joseph Howes, Chief Executive Officer, Buttle UK – For Children and Young People
  38. Dr Joseph Spooner, Associate Professor, Department of Law, London School of Economics
  39. Dr Johnna Montgomerie, Head of the Department of European & International Studies & Reader in International Political Economy, Kings College London
  40. Judith Moran, Director, Quaker Social Action
  41. Dr Kate Bayliss, Senior Research Fellow, Centre for Development Policy and Research (CDPR), School of Oriental and African Studies
  42. Kevin Courtney, Joint General Secretary, National Education Union
  43. Professor Laura Bear, Head of Anthropology, London School of Economics
  44. Laura Payne, Project Manager, 4in10: London’s Child Poverty Network
  45. Laurie Macfarlane, Fellow, Institute for Innovation and Public Purpose, University College London
  46. Luke Hildyard, Director, High Pay Centre
  47. Maia Kelly, Coordinator, Leeds Tidal
  48. Manuel Cortes, General Secretary of the Transport Salaried Staffs’ Association
  49. Martin Charlesworth, Chief Executive, Jubilee+
  50. Dr Mary Bousted, Joint General Secretary, National Education Union
  51. Mathew Lawrence, Director, Common Wealth
  52. Miatta Fahnbulleh, Chief Executive, New Economics Foundation
  53. Michael Deas, Coordinator, London Renters Union
  54. Neal Lawson, Executive Director, Compass
  55. Dr Neil Lancastle, Senior Lecturer, Leicester Castle Business School, De Montfort University
  56. Neil McInroy, Chief Executive, Centre for Local Economic Strategies
  57. Nick Dearden, Director, Global Justice Now
  58. Professor Ozlem Onaran, Director of Greenwich Political Economy Research Centre, University of Greenwich
  59. Paddy Lillis, General Secretary, Union of Shop, Distributive and Allied Workers
  60. Paul Parker, Recording Clerk, Quakers in Britain
  61. Dr Robert Biel, Associate Professor, Development Planning Unit, University College London
  62. Dr Robert Calvert Jump, Research Fellow in Political Economy, University of Greenwich
  63. Robert Palmer, Executive Director, Tax Justice UK
  64. Professor Roberto Veneziani, School of Economics and Finance, Queen Mary University of London
  65. Ronnie Draper, General Secretary, Bakers’ Food & Allied Workers’ Union
  66. Dr Ryan Davey, Social anthropologist, University of Bristol
  67. Sabine Goodwin, Coordinator, Independent Food Aid Network
  68. Samira Johnson, Co-ordinator, Unfair Debt Group
  69. Sara Williams, Debt Camel
  70. Sarah-Jayne Clifton, Director, Jubilee Debt Campaign
  71. Dr Shaun French, Associate Professor of Economic Geography, University of Nottingham, and Nottingham Financial Resilience Partnership
  72. Dr Simon Mair, Research Fellow, Centre for the Understanding of Sustainable Prosperity, University of Surrey
  73. Professor Steve Keen, Honorary Professor of Economics, UCL & ISRS Distinguished Research Fellow
  74. Stuart Melvin, Co-Founder, Workforce Movement & the Coronavirus Support Group for Workers
  75. Professor Terrence McDonough, Emeritus Professor of Economics, National University of Ireland Galway
  76. Tracey Herrington, Project Manager, Thrive Teesside
  77. Dr Wanda Wyporska, Executive Director, The Equality Trust
  78. Professor Wendy Olsen, Professor of Socio-Economics & Head of Department of Social Statistics, University of Manchester
  79. Will Stronge, Director, Autonomy