Exclusive:
The head of high street supermarket Iceland, Richard Walker, has voiced his fears over bill hikes, as well as threatened welfare cuts, on some of Britain’s poorest families
The boss of frozen food chain Iceland has warned of the impact April’s bill hikes on already hard-up households.
Executive chairman Richard Walker pointed out that increases in the price of energy, water and council tax would land around the time of the Easter school holidays. The break – typically two weeks – can have a big impact especially on poorer families, particularly those whose kids are eligible for free school meals. He said: “It’s a long holiday but this year it is unprecedented because everything is going to kick in then. I am actually quite worried about April onwards, if I’m honest.”
To help, Iceland is again offering interest-free loans of £10 to £100 to avoid customers resorting to loan sharks. The Iceland Food Club has already provided more than 30,000 loans totalling £12million.
Mr Walker warned a “poverty premium” meant those who are already hard-up can find themselves being stung with costly interest rates from other forms of credit because they struggle to get loans from mainstream lenders. Those taking out its micro loans often have sketchy credit histories. But Mr Malcolm said this did not mean it was risky lending them money. “They’re not,” he said. “The default rate is slightly higher than average but it is factored into the calculations and it is not something that would prevent us from continuing and scaling it up.
“These aren’t people who are trying to get away with it. It is people who can’t get credit anywhere else. Fair credit shouldn’t be a lottery of good fortune, it should be a right.”
He went on: “It’s a win, win in many levels. It is obviously good for the borrowers, but let’s face it, it’s good for Iceland too. Losing customers to food banks is a reality – they are a competitor.”
Mr Walker called on other retailers to offer such loans too. “One of my big calls to arm is that we should move beyond pilots and let’s mainstream it,” he said. “Definitely other retailers. Let’s try and scale it up. There is this poverty premium that people are paying and it is not right.”
An added advantage is that it could help tackle shoplifting, explaining: “Some of it is just people who are absolutely desperate.”
Mr Walker, a former Tory donor who backed Labour at the last election, raised concerns about the threat of welfare cuts. He said: “The welfare bill is challenging and we need to bring it down but we have to make sure that at this critical moment we are not hurting the people who need our help the most and that’s why it’s time for business to step up.”
Mr Walker was speaking after it emerged Welsh acting legend Michael Sheen has written off £1million of people’s debts in South Wales in order to draw attention to the inequalities in the debt market.