Austerity, inequality and high-cost credit: understanding the role of a social minimum

This chapter finishes the collection by highlighting the links between austerity, inequality and commercial high-cost credit. It argues that until the State recognises and responds to the link between these concepts, the current regulatory approach will not assist those borrowers who are vulnerable and in desperate need of funds. Throughout history there has been an ongoing pendulum approach of high-cost credit regulation; swinging from a freedom-based approach that discourages government intervention into individual affairs to a protectionist focus that focuses on preventing consumers accessing potentially harmful credit products. The chapter will explore this tension, highlighting that neither approach tackles the underlying challenges associated with high-cost credit. Instead the focus should be on providing and maintaining a social minimum, thus responding to the cause of the demand for these types of products.