"The poor will suffer most in financial crisis, charities warn"
by
Bill Bowder
AFTER governments announced a £2-trillion bail-out of banks across
the world this week, charities and churches were left wondering whether
there would be enough money left to help the poor.
The World Bank warned that the “unprecedented turmoil” in the
financial markets, the tightening of credit, and the global economic
slowdown could do “serious and in some cases permanent damage” to the
world’s poorest people.
This year, 100 million people have been driven
into poverty. “That number will grow,” the bank’s president, Robert
Zoellick, said on Sunday.
The Archbishop of Canterbury, speaking in London on Wednesday,
at the end of a meeting of Christian and Muslim scholars, was asked who
was responsible for the financial crisis. Dr Williams told reporters:
“I was going to say Satan. . . The root problem is human greed.” The
priority given to the poor by Christianity and Islam was not always
reflected in the realities of economic activity, he said.
Ernese Skinner, policy and campaign manager of the Charity
Finance Directors Group (CFDG), warned that the crisis could see
matched funding from local authorities dry up, as they tried to recoup
their losses after the collapse of the investments they had made in
Icelandic banks. “It is the unfortunate who will suffer most,” she
warned.
Local authorities and charities, which are believed to have
invested about £1 billion in the banks, are not able to apply for
relief under the Government’s Financial Services Protection Scheme, she
said. For example, 99 charities, valued at a total of £230 million,
have investments in the Kaupthing Bank in Iceland, and most of these
are British.
CFDG has written to the Treasury to ask it to extend the
financial-services guarantee to cover all losses by charities —
including churches — after a meeting with Lord Myners at the Treasury
on Friday.
The Charities Aid Foundation, in a joint statement with CFDG and
other charity groups, has urged charities affected by the Icelandic
banking crisis to say who they are, so that the scale of the problem
can be assessed.
The Church Urban Fund’s chief executive, Tim Bissett, said the
situation could be returning to the way it was in the early 1990s, when
the Fund worked with the poorest city communities. “What the Church did
then was to show that it could rally to support poor people in this
country.
“We recognise the urgency of the economic downturn and its
effect on the poorest people in the community, and we will appeal to
those who can support us,” he said.
But on Tuesday Mr Bissett had not yet considered what would
happen if local authorities’ matched funding stopped. “If that stream
dries up, we could be asked to make much bigger grants.”
The Church’s national stewardship and resources officer, Dr John
Preston, said that giving had held up well in past downturns. “But for
capital funding projects like the church-roof appeal — those could be
much tougher in that environment.”