How actor Michael Sheen’s £1 million debt giveaway has exposed UK’s looming poverty crisis
In many respects Channel 4’s screening this week of the documentary Michael Sheen’s Secret Million Pound Giveaway couldn’t have been better timed. With the UK government about to announce a whole raft of draconian benefit and welfare cuts that will decimate thousands of families and vulnerable individuals, there has never been a more urgent need to prise open the dark and destructive world of personal debt.
For Welsh actor Sheen his preoccupation with debt and the misery caused by unscrupulous money lenders began with an epiphany he experienced many years ago whilst visiting the Vatican on an Italian holiday.
“I went to sit down, and surrounding me in that chair were some pictures representing Jesus and his ministry,” Sheen said during a 2018 interview with the Radio 2 show Good Morning Sunday.
“There was a picture of Jesus with some children and the sick and the poor, it became really clear to me that there were people in Port Talbot, at that moment I was sitting there, doing all that stuff represented in those pictures. There were people and organisations doing that right now.”
That realisation led him to create The Passion, a groundbreaking 72-hour drama staged on the streets of Port Talbot in 2011 with a 1,000 strong community cast that was hailed as one of the most ground-breaking pieces of theatre ever staged.
“Rather than tell a story about what Jesus did, I decided to tell a story where Jesus listens to the stories of people doing exactly what Jesus in those pictures was doing but right now, today. In that moment it actually clicked for me, what the story needed to be … “ultimately the Easter story is about resurrection; it’s about sacrifice and resurrection. That is the hope of the story, I think.
“And it is the hope for our communities, that if people engage with the most marginalised, something that has become clearer and clearer to me in my life is the simple truth that life is hard and we must help each other. The story of Jesus and his ministry is about that.”
The Port Talbot Passion experience inspired Sheen to launch his End High Cost Credit Alliance campaign, a group made up of more than 50 politicians and representatives from charities and tech companies, working to promote more affordable ways of borrowing money.
In Monday’s Channel 4 documentary Michael decided to try and create a practical demonstration of this by using £100,000 of his own personal cash to buy up and then cancel off £1 million of personal debt owed to loan companies by 900 ordinary people in the South Wales area. Setting up a company just to be able to do this took more than 18 months of very tense planning, during which time Sheen met some of those sinking under debt interest payments, those who are trying to help people escape from the burden, and even one of the shadowy loan sharks who collect soaring debts with threats of physical violence and even death.
“One victim was taken out into the woods and told to dig his own grave,” Sheen was told.
Typical of the stories was one young man who needed to borrow just £500 for a domestic emergency which rapidly exploded into a completely unpayable £5,000 debt.
It’s a dilemma that many will identify with as it’s estimated that almost half of UK adults are currently living in financially vulnerable circumstances, an increase of 16% since 2022. Without safety nets like credit, insurance or savings, many of us risk being tipped into problem debt by everyday events or unexpected expenses. As a result, people face paying more just for being poor, or being excluded from financial services altogether, without access to mainstream products and services which others rely on.
Some of this debt ends up in the hands of loan sharks, but the deeper problem is the vast pool of personal debt that has started its growth journey with our main lending banks – none of whom would even talk to Sheen for his programme. Debt that become onerous for banks to collect is sold on to loan companies, after fees and administration expenses are added. In turn these companies attempt to collect the debt, add their charges, and then sell on the debts again. This can happen multiple times, with the selling price going down each time but the debt to the customer increasing relentlessly.
It was Sheen’s hope that he could create a legitimate loan purchase company to buy £1 million of personal debts for just £100,000 of his own money, and then cancel them out. Apart from having to do this extremely secretly as no-one wants this trade illuminated, Sheen discovered very quickly that his £100k might have represented a huge outlay for him – “I’m not even sure I can afford to do this,” he admitted – but it wasn’t exactly big money in the grand scheme of debt purchasing – people in the UK owed £1,850.1 billion at the end of April 2024, with the average total debt per household, including mortgages, standing at £65,143.
At the most vulnerable end of the social scale, it’s all too often assumed that the people who resort to credit and get into unmanageable debt are somehow responsible for their own plight, when usually nothing could be further from the truth. Such prejudice and ignorance used to be the preserve of those on the right of British politics but echoes of this particular ‘blame game’ were even to be heard this week, as Labour MPs exchanged their candid thoughts about the several billion pounds in planned spending cuts that Chancellor Rachel Reeves presented to the government’s official forecaster, the Office for Budget Responsibility, this morning.
Labour is trying to argue that “the world has changed” since Reeves’ Budget last October, and that the need to increase defence spending and the upheaval in global markets has forced the government to take “major measures” to meet the chancellor’s previous commitment to restrict spending.
Of course, any government only has a pretty fixed income derived from taxation, so radically increased spending in one area will necessarily mean radical reductions in another.
One might have thought that a Labour government would have regarded the protection of social security and welfare benefits for the most vulnerable as a fundamental pillar of its founding ethos, but times have obviously changed here too, with much of this week’s justifications for what is coming centred around strong implications that far too many of those on benefits were ‘gaming the system’ and needed to be forced into work.
Of course some are, but that’s squarely the fault of government incompetence in not identifying and dealing with such cases, and anyway this should never be used as justification for onerous and punitive changes to the whole system.
It might also be added that the troublesome 25% increase in sickness benefits since 2020 is squarely a result of the Covid pandemic, about which deep fiscal questions still need to be resolved and explained.
The very fact that the present Labour party is focussing its strategic cuts on the welfare system is both sad and worrying, especially when there are so many other areas of government spending where sizeable, if not equal, savings could be made. The current Budget proposals will only worsen the social welfare of the country and drive many more people into the kind of destructive poverty that Michael Sheen for one is so desperately concerned about.
One of the key findings of his documentary was that people of South Wales who were resorting to punitive credit and unmanageable debt burdens were not ‘irresponsible scroungers’ but in fact were hard-working individuals in regular jobs whose pay and conditions simply didn’t enable them to make ends meet, and left them especially unable to cope with random expenses – such as replacing domestic appliances, buying school uniforms or repairing their means of transport.
So, forcing people off benefits and into meaningless and poorly rewarded work might ease a few government statistics, but it certainly won’t benefit people or communities. A more socially constructive approach would be to ensure that people don’t need to rely on benefits in the first place, and this can only be achieved by improving employment rights and rates of pay. And you might also want to add to this the availability of carefully controlled, affordable credit.
A Fair Banking Act – modelled on a successful precedent from the US – could transform access to affordable credit in the UK. Additional lending to small and medium-sized enterprises (SMEs) could lead to a £3.9bn increase in the turnover of SMEs across the UK, which in turn would create and maintain 10,000 jobs, sparking inclusive economic growth in the parts of the country where investment is needed most.
During his programme Michael Sheen in particular praised Community Development Finance Institutions (CDFIs), the latest incarnation of credit unions, who offer low cost, manageable credit to those excluded by the major financial institutions. Last year CDFI lending reached almost £300 million and is continuing to increase as people turn to affordable, ethical, credit.
Within the Catholic Church credit unions and similar ethical lending initiatives have always been encouraged, as a means of reflecting Catholic principles of equity and social justice.
Here in the UK many will no doubt remember the Catholic Building Society, founded by Vincent and Nona Byrne in 1960 which prided itself on making affordable home loans available to people with lower-than-average incomes, and giving a high proportion of its home loans to single women. By the 1990s more than 40% of the society’s customers were female and in 1993, for example, it granted 12 mortgages to women whose marriages had broken down, with 25 children involved, all of whom were at risk of being made homeless because their existing lenders would not continue their home loans. Once the 57th largest building society in the UK with some £44 million of assets, it was eventually swallowed up by the Yorkshire Building Society.
Some small Catholic diocesan or parish-based credit unions are operating but, with unprecedented welfare and benefit cuts on the way, there is a more urgent need than ever for Catholics to step in and offer help and support to the most vulnerable in society. When Vincent and Nona decided to set up their vital lifeline to vulnerable people in the late 1950s it was an instinctive but unprecedented response to an immediate need; today the mechanisms for establishing CDFIs and credit unions are well established and well proven, so there’s really no excuse for the Church not being involved. There are also a number of very active campaign groups out there calling for a formal Fair Banking Act to ensure access to affordable credit.
Traditionally, when our Catholic Church addresses the issue of debt it most commonly talks about relief for poor or developing countries, and there’s always been a certain reluctance to throw up challenges relating to the amelioration of personal debt at home, or to question the financial institutions and economic principles that oversee it.
Sadly, over the coming months we’re going to see a lot more vulnerable people dragged into difficult debt situations, with all the negative and damaging social consequences that brings. Help and practical support for those individuals and their families will be needed badly and Catholic social justice organisations will help to provide that, but we do also have an equal moral obligation to challenge and question the root mechanisms and attitudes that are creating domestic poverty in the first place.
In his 2023 message for the annual World Day of the Poor, Pope Francis called for every Christian to become “personally involved” in the struggle to help the poor, as a “great river of poverty is traversing our cities.”
“How much still needs to be done for this to become a reality, not least through a serious and effective commitment on the part of political leaders and legislators!” said Francis.
“For all the limitations and at times the failures of politics in discerning and serving the common good, may the spirit of solidarity and subsidiarity continue to grow among citizens who believe in the value of voluntary commitment to serving the poor.
“Certainly there is a need to urge and even pressure public institutions to perform their duties properly,” says Francis, “yet it is of no use to wait passively to receive everything ‘from on high’”.
Given the present mumblings coming out of Westminster, it certainly isn’t!
Joseph Kelly is a Catholic writer and public theologian
Pic: courtesy Channel 4
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