THE cost of living will dominate the coming months. Ed Miliband, the Labour leader, believes we face a cost of living crisis that must be addressed by making capitalism more responsible, by making it work for the many not the few. David Cameron will try to convince us the economy is recovering strongly. He will warn that any change in policy - any change at Number 10 - would blow it back off course. Who wins that argument will probably win the general election in May. The result is too close to call but what is apparent before the campaign proper starts is that for all but the wealthiest the cost of living is a pressing issue.
A recent analysis by the GMB union claimed the value of average earnings has fallen by 12.6 per cent in real terms since the banking crash of 2008. Average earnings in Scotland may have risen slightly from £23,934 to £25,581 over the period but the increase has been more than wiped out by inflation. Most people are worse off than we were six years ago - and know it.
Against that background, initiatives that ease the pressure on family budgets are especially welcome. One such is The Rental Exchange, a tie-up between the Big Issue's social investment arm, Big Issue Invest, and Experian, the credit rating agency, which has the potential to help hundreds of thousands of Scots struggling to make ends meet on modest incomes.
It has long seemed unfair that those renting their homes are not recognised by credit agencies for paying their rent regularly. Paying a mortgage counts towards a credit history but paying the rent - which requires exactly the same discipline with the household budget - does not. The Rental Exchange promises to end this injustice and, in doing so, open financial opportunities previously enjoyed only by those with a healthy credit rating. Cheaper fuel bills for those able to pay by direct debit, interest free deals on household goods, better value insurance - all could come within the reach of many people if the scheme takes off. In a pilot, the proportion of people in social rented housing who were able to access online credit rose from 45 per cent to 85 per cent.
The scheme should not encourage reckless borrowing. It is based on the recognition, backed by research, that people renting their homes budget sensibly and meet their financial responsibilities. In fact it will promote sensible borrowing by enabling people to take advantage of good deals rather than seek expensive credit.
For The Rental Exchange to work, landlords must buy into to the idea and share information with credit agencies on those tenants who wish to take part. The early signs are encouraging. By the summer, it is hoped around 100,000 Scots will have access to the scheme. But, even then, there will still be a long way to go: nearly a million Scots rent from councils, housing associations or private landlords. Hopefully the scheme will quickly gather momentum and before too long rent payments will be routinely taken as evidence of credit-worthiness. Big Issue chief executive Jim Mullen believes The Rent Exchange has greater potential to help people than any of the organisation's other initiatives. Let's hope he is able to find out. It deserves to succeed.
ends
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