|
Lib Dems urge action on £1 trillion debt
 |
| Vincent Cable at HM Treasury presenting a statement on the accumulated debt of the British public |
The Liberal Democrats have urged Gordon Brown to take action amid warnings that Britain's consumer borrowing has now reached £1 trillion.
Describing the chancellor as failing in his duty of care towards the British people, Lib Dem Treasury spokesman Vincent Cable said it was time to get tough with financial institutions guilty of irresponsible lending.
Basing their analysis on British Bankers Association figures, which put lending at the end of February at £976.3 billion and rising, researchers suggested that May 21 would be the day that borrowing by the British people collectively reached the symbolic £1 trillion level.
In comparison, the total external debt for sub-Saharan Africa is $216 billion, Latin America's debt is $765 billion and Asia's stands at $750 billion.
Presenting a statement of account for Britons' borrowing, Cable said the government should act as "people have to be saved from themselves".
"Our borrow now, pay later culture has resulted in a new milestone for borrowing," he said.
"If interest rates rise as expected, if house prices fall, if oil prices continue to go up and inflation rises, many people could find themselves in difficulty."
Setting out the scale of the borrowing, Cable added that a trillion pounds in ten pound notes would, if placed end to end, stretch to the moon and back 18 times over.
"Even the interest we pay on that debt - £6 billion every month - is beyond comprehension," he said.
The Lib Dems have set out a 10 point "debt action plan", involving tougher policing of financial institutions and extended advise and support for those facing difficulties meeting their commitments.
The suggestions include the publication of data on sustainable household debt.
There would also be curbs on the "tidal wave" of credit promotion and a crackdown on loan sharking.
Excessive interest rates on store and credit cards would also face tougher policing.
And an "extensive" network of centres would offer independent financial advice, while emergency short term lending would be made available for low income families.
"Gordon Brown, as chancellor, has a duty of care towards the British people," said Cable.
"Even if we, as consumers, are unable to recognise that we are borrowing too much, it is not in the government's interests to return to a boom and bust economy.
"Sometimes, people have to be saved from themselves."
|
