Don Foster MP*

BRITS £1,000,000,000,000 IN DEBT BY SUMMER

Commenting on new figures published by the Liberal Democrats today, which suggest that British people will have debts of a staggering £1,000,000,000,000 (one trillion Pounds Sterling) by summer 2004, Don said:

Main Image“British households now owe banks and other creditors as much as the total external debt of Africa, Asia and Latin America combined. We are on the biggest borrowing binge in history.

“Consumer borrowing has been keeping the British economy going but it simply isn’t sustainable. Any sensible person will know that you cannot simply keep on borrowing more than you can afford to pay back.

“Yet at every turn people are being encouraged to borrow more. Supposedly interest free loans are dropping out of the sky, mortgages are given at four or five times our earnings, credit card companies are falling over themselves to encourage us to spend more. Unsecured debt has risen by over 50% since this government came to power.

“Gordon Brown, as Chancellor, has a duty of care towards the British people. Even if we, as consumers, are unable to recognise that we are borrowing too much, it is simply not in the Government’s interests to return to a boom and bust economy.”

The Liberal Democrats have today launched their new ten-point plan on debt

* The Liberal Democrats’ ten-point plan for dealing with household debt:

1. The publication and monitoring by the government along with the Bank of England and the Financial Services Authority of measures of sustainable household debt, along the lines of the government’s own fiscal rules

2. Guidance to banks on safe to loan value ratios and income multiples for mortgage borrowers based on independent assessments of asset values by a group operating in a similar manner to the Bank’s Monetary Policy Committee

3. Active use of reserve deposits to reduce destabilizing boom and bust in mortgage lending

4. Curbs on the tidal wave of unsolicited credit promotion by demanding a prominently displayed ‘Credit health warning’

5. A crack down on exploitative loan sharking, with promised legislation on consumer credit to tighten up on the issuing and monitoring of credit licenses, coupled with harsher penalties for those guilty of bad practice

6. Stopping early, often hidden, redemption penalties, so as to discourage the early clearance of debt

7. Stronger enforcement of OFT rules to prevent abuses associated with misleading advertising by debt management and advice services

8. Excessive interest rates on store and credit cards to far more vigorously policed by the competition and trading authorities

9. An extensive network of centres for independent, low cost, financial advice supported by credit providers and the investment industry

10. Widening the remit of the social fund to permit emergency short term lending in a reaching fund for low income families in financial crises

* The total external debt for Sub Saharan Africa is $216 billion, Latin America $765 billion and Asia is $750 billion.

* Bank of England figures show that lending to individuals totals £934,008 millions (BofE Statistical Release, 30 January 2024), of which £764,621 million was secured on dwellings, and £169,387 million was consumer credit, the total is currently growing at around 1% per month.

* In a recent Parliamentary Answer to Lib Dem Shadow Chancellor, Dr Vincent Cable MP, the Government revealed that unsecured debt (i.e. loans not secured on assets or property) per person has grown by over 50% since 1997, while incomes have risen by only 23%.

Dr. Cable: To ask the Chancellor of the Exchequer what the average (a) unsecured debt per person and (b) annual income per person was in each year since 1997. [129931]

Ruth Kelly: The information requested falls within the responsibility of the National Statistician. I have asked him to reply.

Answer: The National Statistician has been asked to reply to your recent question on unsecured debt per person and annual income per person. I am replying in his absence. (129931) The information requested is shown in the table below. The data for unsecured debt (households' total financial liabilities other than secured debt) and income (households’ gross disposable income) used in the calculations are national accounts series for the combined household and non-profit institutions serving households (NPISH) sectors. The accounts for the household and NPISH sectors are currently combined; separate estimates are not available.

The average annual disposable income and unsecured debt person can be obtained by dividing the appropriate national accounts totals by the UK population aged 16 and over. These are shown for the years requested in the table.

Year Annual Income per person (£) Unsecured Debt per person (£)
1997 12,400 3,540
1998 12,680 3,790
1999 13,330 4,090
2000 13,980 4,470
2001 14,980 4,900
2002 15,310 5,330

This article published: 03/02/2024

Published by Bath Liberal Democrats, 31 James St West, Bath, BA1 2BT. Printed and hosted by JPC Infonet, 2 St Georges Works, Trowbridge, Wiltshire, BA14 8AA. Your Privacy._blank

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