Crediting Common Sense.
Time and again, the level of personal debt is blamed for the difficulties the UK is facing in climbing out of that recession – you know, the one we were best placed to weather.
‘Personal debt’ is quoted as an abstract statistical fact. The latest figure I can find is £1,457 Trillion. Trillion! It isn’t an abstract fact, it’s a cultural icon. It rudely illustrates the difference between the aspirations of UK citizens and those elsewhere in Europe.
In the UK there is a pressing social need to ‘have things’, cars, houses, furniture, clothes. They are seen as both an entitlement and a right. ‘Poverty’ is seen as having less than a set figure which includes the cost of such staples in life as a mobile phone, walking boots and a bicycle. Items, without which, we are assured, you cannot participate in society.
If you don’t have the money to acquire these things Now! – Now! Now!, then you must borrow the money, but have them now you must.
One of the more profound cultural shocks for anyone moving to France is entering the French banking system. You arrive proudly bearing your excellent UK credit rating, and having arranged your current acount you ask for a credit card. The answer is Non! Every time. Non!
I once spent some time pacifying the scion of one of Englands most famous banking families, reeling with shock at being told he couldn’t have a credit card. How was he supposed to acquire the things he ‘needed in order to participate in society’ when he didn’t have any spare cash? It took considerable time and effort to get through to him that actually, what he was supposed to do was to go without until he did have the cash. It was such a novel suggestion to his English mind that it came close to eliciting an epileptic fit.
‘But the Nanny is coming down next week with the children and we have no curtains for her room’.
Close the shutters.
‘There’s no oil for the central heating’.
Light the fire.
On and on he went, each wail receiving a logical answer from me, until finally he exploded – ‘So I’m supposed to live like a pig am I?’ There was really no answer to that.
Credit cards here are virtually unknown. There is a variation of a credit card. If you are in employment and can prove to your bank that you can easily repay, say, the cost of double glazing for your house, then you can arrange a loan, this can be given in the form of a card up to the agreed amount – not rolling credit, but the agreed amount, for ease of spending the loan.
If you have just arrived from another country, have no employment, and merely think that you need ‘goodies’ now in order to participate in society, then a French bank manager who mean Non when he says Non will be rapidly re-educating you.
As a direct result of the difficulty of obtaining credit for things you can’t yet afford, is the sheer absence of places on which you can spend money on anything but the lowest priced version of essentials.
If you need a new pair of jeans your local town will give you a choice of either the clothing section of the supermarket – or the clothing section of the local agricultural store. Perhaps a small independent retailer as well. If you want to spend five times the cost on a pair of designer jeans, or the price of a small car on a handbag, then you have a problem.
Window shopping, lusting over goods that you can’t afford, being assailed at every moment with more things that you don’t really need and can’t afford, is a pastime exclusively reserved for Paris and Nice. Does that mean that the French ‘live like pigs’. I would say not.
Young couples round here who are in the minority in that their parents have no house which they will inherit – another shock to the English system – you mean you can’t disinherit your children? Nope. Anyway, the few who will inherit nothing, not even a share of the family home, buy a piece of land. It is relatively cheap. The hold the land for several years whilst they save up the cost of building on it. By building on it, they don’t mean an aspirational five bedroom mock tudor mansion, they mean the minimum living space necessary. Two rooms, kitchen and bathroom. It will be built in red brick which is intended to be rendered. Rendering is not a necessity for the house to be habitable. So they will live in it for several years whilst they save up the cost of the rendering in its raw red brick state. They might stretch to gate posts, if only to have somewhere to attach the ubiquitous poste box. Depending on how many children have been happily begat in this minimum space, they will order the next priority – either enlarging the house, or turning the garden into a more agreeable space.
If they do have children, then credit is even further restricted, because French law says that since the children have an interest in the house, pace the inheritance laws, you can’t mortgage away their future inheritance just to impress the neighbours with fancy curtains in your new abode. The system is double-edged, for the children also have a responsibility to you.
As you grow older and less agile, it is the responsibility of the children to maintain the house. It will be theirs one day. If the roof caves in, and you have no money to repair it, then they must stump up the cost.
Some children escape this responsibility by disappearing. They might not have been heard of for many years – since that fatal argument over the length of their hair for instance. In which case, the Mairie will repair the roof – but with a sting in the tail. They will hold the cost against your future inheritance. When your parents die, you get 25 years to remember that there was a time before you renamed yourself Ziggy Moonbeam and you weren’t found under a gooseberry bush, before the Mairie cry ‘Time’s up’ and reclaim the house for the benefit of the commune. They will sell it – perhaps to some English couple happy to find a house that hasn’t been lived in for 25 years and is just ‘crying out’ for restoration.
The so called Labour ‘Death Tax’ would appear to be a variation on this scheme – either look after your parents yourself, of loose out on your inheritance.
The world of DFS – ‘Amy wanted a sofa but she didn’t want to pay for it for a year, no problem’ – is unknown here. Houses are things that keep the rain and sun off your head. Cars are for getting to work in the morning, not for sitting in the driveway impressing the neighbours whilst you take the bus to collect your dole money. Children are something you protect and nurture, and they have responsibilities towards you in return. Land is for growing things on that you can eat.
Credit is for people who want to end up living in houses they can’t afford, sitting on sofas they don’t own, manipulated by politicians they don’t trust.
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February 10, 2010 at 17:29 -
Sounds great! Any properties going cheap?
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February 10, 2010 at 17:39 -
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February 10, 2010 at 18:05 -
Its sounds like an awful way to run things.
For the record I manage my finances very tightly, I do have a credit card but always pay it off in full each and every month. But, one day I may want access to credit to start a business or buy/build a house and it would be nice to have that option.
More choice = more wealth.
There’s nothing wrong with credit, its how it gets used that causes the hardship.
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February 10, 2010 at 18:09 -
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February 10, 2010 at 18:25 -
And it is a serious offence to issue a cheque that exceeds your bank account balance, I believe
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February 10, 2010 at 18:51 -
Exactly, you can’t have your cake and eat it……
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February 10, 2010 at 18:57 -
Crumbs!
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February 10, 2010 at 18:57 -
Thats fair enough, what I’m wary of though is turning the issue of credit into a social problem and one that politicians should ’solve’.
Just like smoking, drinking or obesity, credit use in my view is a personal decision and should be left to individual and their creditors. If the French feel happy with comparatively low levels of credit use then good for them, but I get the feeling that many would like to see this area of life burdened with more regulation and central control.
I know with the credit crunch this may be fashionable view to hold, but it is what it is, a call for a restriction on freedom.
Of course nobody has a right to credit, but equally, nobody has the right to deny a third party credit based on nothing more than their views on the good life.
I’m not saying that you’re saying any of this btw, I’m just getting on my soapbox so excuse me.
PS I would question that figure, £1457 trillion sounds too high, it might be £1457 billion, which is closer to the figure that I’ve often heard reported.
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February 10, 2010 at 19:15 -
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February 10, 2010 at 19:27 -
Yep Glo, no point in bolting the Gateaux if the horse has bolted..
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February 10, 2010 at 19:30 -
I think they’ve got that wrong Anna.
The figure that I generally hear is UK personal debt being around £1.5 trillion which is £1500 billion not trillion.
The sentence underneth puts total secured uk lending at £1.2 billion which makes more sense and means credit card debt is around £300bn.
To put things into perspective UK GDP is around £1 trillion. Theres no way we all our 1500 time our yearly salary! (not yet anyway)
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February 10, 2010 at 19:33 -
I meant to say total secured lending was £1.2 trillion, not billion.
Getting too confsing lol.
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February 10, 2010 at 19:35 -
A beautifully written piece by Anna from which lessons can be drawn. I salute the French for their sensible and prudent approach to life. We in the UK have been living beyond our means for far too long. The medicine to be administered by the next government will have to be bitter and it is pointless complaining. The fault is ours. Let us hope that those falsely claiming benefits will be named and shamed into taking jobs, and bogus asylum seekers are ejected without endless and expensive visits to court (for which the legal aiders wax rich at our expense). As recommended by this site I have bought ‘The Plan’ and I am equally impressed and inspired. Let us attempt to fix broken Britain while it is still possible to do so.
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February 10, 2010 at 19:38 -
I guess it’s a topic we should all choux over.
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February 10, 2010 at 19:45 -
I hear the sound of forehead on desk.
Best wait for a not so serious thread.
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February 10, 2010 at 19:46 -
Just to really annoy Anna on my first visit here, ( I do like your work, its just that I’m a real pedant sometimes)
“UK personal debt totals close to £1.5 trillion” which is £1500 billion
http://news.bbc.co.uk/1/hi/in_depth/business/borrowing_debt/default.stm
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February 10, 2010 at 19:51 -
chefdave, if you think that’s pedantic, just wait until the apostrophe police here get hold of you.
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February 10, 2010 at 20:12 -
Great post as evah
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February 10, 2010 at 20:48 -
Saul February 10, 2010 at 19:45
I hear the sound of forehead on desk.Best wait for a not so serious thread.
………..
Good idea. The mood’ scone anyway. -
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February 10, 2010 at 20:49 -
When I’m in France my UK-issued credit cards work just fine in shops, restaurants, hotels etc, so no problem. If I was ever to move there I would just keep them going and pay them off every month through online banking as I do today anyway. Online shopping would take care of any sartorial needs (ie designer jeans) that the local French clothing shop believes I ought not to be wearing.
As chefdave said (2nd comment) it’s how you use the cards not the cards themselves that’s the problem.
A well run credit card helps the bank, the economy and individual – its the abuse of them that needs to be controlled. The French bank managers sound like the right sort of people to have in charge, but don’t seem to have realised that some people can actually control their own money (and should have credit cards) and some can’t. Learn to tell them apart. But if the French wish to carry on living in the banking dark ages that’s fine with me
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February 10, 2010 at 20:59 -
The Government warned today of another serious outbreak of the AR pun virus; but sources close to l’Assurance Sociale issued a statement saying that combatting the new strain would be un morceau de gateau.
Anyway, here’s a funny thing:
Australia and France have largely escaped the soi-disant credit crunch. Could this be because they share (1) Strict rules about selling unsecured debt and (2) even stricter rules about financial insititutions’ investor-to-borrower ratios?
Anna is spot-on with this piece – an account that will be instantly recognisable to any Brit who spends long periods in France. Having a German father-in-law, I can tell you that the situation in Germany is similar.
Anglo-American culture is infected by snake-oil piffle when it comes to money. The truth is the same now as it was in ancient Egypt: no money, no sale.xx
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February 10, 2010 at 22:07 -
So, when in Raccoonville you need a pocketful of cash eh.
Reminds me of when the wife had lost her credit card, I didn’t bother reporting it…
Whoever found it was spending less than she was.
J’obtiendrai mon manteau
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February 10, 2010 at 22:07 -
And that isthe system we must get back to.
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February 11, 2010 at 05:49 -
There is always the Three Cheque System. Anyone who wants to sell you something will take three cheques spread over three months. All must be signed at the time of purchase, but left undated as it is against the law to post date a cheque. The seller writes the date on the back and then transfers the date to the front at the due time.
This works very well, and buyers ensure that there are funds to cover future cheques when they are due. Lack of funds will result in the loss of Debit Card, Cheque Book and access to a bank account. Not to mention a hefty fine.
And you can’t go to another bank because they are all in on it. Your name will be on a central computer until all debts are paid. And even then you will be forever after held in suspicion.
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February 11, 2010 at 07:21 -
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February 11, 2010 at 07:59 -
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February 11, 2010 at 09:50 -
A bouncing cheque is indeed a capital crime here, or at least you are treated a such, as I can tell from experience. In my case it would have been helpful IF the French, including the banks, would stop mentioning all amounts in Euros AND in [non-existing anymore] FRENCH FRANCS. Before spending the money I had asked my [Dutch] bookkeeper to balance the funds on the account I was going to use, but she didn’t send enough as she was mistaken by the more important [6,9 times higher] amount in FRF … Fortunately I keep good relations with the managers at every bank I use, so I could talk my way out of a 5 year no-money-prison
Having both Euros and French Francs mentioned everywhere, also on invoices does have one advantage: after you have recovered from the shock of the amount mentioned at the right hand bottom, the actual amount in Euros, whatever it is, seems to be quite sensible ….
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February 11, 2010 at 11:49 -
“On and on he went, each wail receiving a logical answer from me, until finally he exploded – ‘So I’m supposed to live like a pig am I?’ There was really no answer to that.”
Yes there is. Violence or some time on the naughty step. Sounds like it’s not just the children who needed a nanny.
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February 11, 2010 at 20:22 -
Gosh, was it that early, Anna? I lose track sometimes, The Internet being ever available.
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