In a crisis, the government has a moral duty to launch no-interest loans

The Treasury is sitting on a plan to offer no-interest loans to the low-paid. James Moore looks into the possibility of Britain following Australia’s success and introducing the scheme, but he isn’t holding his breath

Fear and greed have led to stockpiling and empty shelves. The poor will be worst hit (PA)

The noise from the kitchen is ominous. You swallow hard and take a look. There’s water all over the floor. The noise was the washing machine’s death rattle. With a family requiring clean clothes crashing into a tight budget with almost no slack, what do you do? This could be the script for a payday loan company's commercial. But with coronavirus stalking the streets, Britain's dismal statutory sick pay at less than £100 a week, and many people people in the gig economy unable to qualify for even that limited protection, it's potentially become an even bigger problem.

Britain was suffering from an epidemic of debt before the very real epidemic emerged. Step Change, the debt charity, puts the number of people struggling at around 10 million. The number looks set to grow. Domestic crises like the one above are how people find themselves jumping on to the 1000 per cent plus APR sub-prime credit treadmill that ultimately leaves them facing financial crises they can’t escape.

In stark contrast, prime borrowers with tip-top credit ratings can borrow at as little as 12.6 per cent for a personal loans of £1,000 or so. Bigger loans can be had for as little as 3.3 per cent. Best buy mortgages can be had for as little as 1.4 per cent, although arrangement and valuation fees put up the cost a bit.