Welfare debt stands at £15k a person

The revelations have reinforced pressure for the ending of planned slash and burn austerity policies, with the Communist Party of Britain (CPB) calling for a windfall tax to be placed on bank superprofits to help indebted unemployed workers.

The Consumer Credit Counselling Service (CCCS) found that almost 15,000 people claiming jobseeker's allowance had run up tens of thousands of pounds' worth of debt with money owed to around five different creditors on average.

Most disturbingly, if the average claimant spent the entire amount they received from jobseeker's allowance on debt repayments each week, it would still take more than four and a half years to become debt-free.

Even then, this would only be the case if interest rates were frozen, said the CCCS.

CCCS chairman Malcolm Hurlston said: "There is a causal link between unemployment and debt."

He added that the Con-Dem government should "be mindful of how welfare cuts will affect those living off benefits and move to ensure they are not damning huge numbers of people to a lifetime of debt."

CPB general secretary Rob Griffiths said: "With the five high-street banks declaring profits of £21 billion in the first six months of this year a windfall tax could help fund a scheme to help the unemployed and other people in debt through no fault of their own."

Mr Griffiths said the figures showed there was an urgent need for the trade union movement to "lead a broad-based campaign against cuts in welfare benefits and public services.

"Whereas more than a trillion pounds of public funding can be found to bail out the banks, little or nothing is being done for the real casualties of this crisis," he said.

"For hundreds of thousands if not millions of people, far from being over, the capitalist crisis is only just beginning."

Derbyshire Unemployed Workers Centres spokesman Colin Hampton pointed out that, if benefits had risen in line with average wages, they would be worth twice as much today.

"Who can live on £65 a week?" he asked.