A significant number of people in the UK rely on Credit Cards to get through the month. Once a person is in this cycle it is very difficult to get out of. Normally their debts spiral, eventually become unmanageable and they are effectively economically inactive. The Credit Card companies end up with a bad debt, which ultimately means they will pay less tax.
I feel that if we could clear any legislative obstacles to employees having the right to be paid weekly, there would be many benefits.
Less money being wasted on high interest charges would mean consumers would have greater spending power.
That spending power would be spread more evenly over the month, which may help some businesses with their cash flow. In a time when Banks seem reluctant to offer businesses credit, this could be a good thing.
People in serious debt can easily become a burden on the State, either through using the CAB, becoming ill or losing their job. Making it easier for people to stay out of debt could lead to cost savings over time in several Govt Departments.
Why is this idea important?
I think my idea could potentially leave more money in the pockets of some consumers, which they will spend with a range of businesses. If they are not spending all their spare cash on interest they will become more economically active, which will probably produce some additional Tax Revenues.
It is also a way of bypassing, in a small way, the stranglehold that the Banks currently have on credit. Furthermore, if the Banks end up having to make smaller provisions for bad debts, they may make higher profits and pay more tax.
Lastly, i believe there are health benefits to not being in serious debt and a healthier person is usually less of a burden on the State, which means less of a burden on all of us.