Liberal Democrats launch debt action plan

11.16.00pm GMT Wed 16th Feb 2005

The Liberal Democrats today launched their action plan for tackling personal debt. Total British household debt is now estimated at £1,050 billion and is currently estimated at 130% of income.

"The government must take action before debt undermines the strength of the economy," argues Cllr Duncan Hames.

Launching the Action Plan, Liberal Democrat Shadow Chancellor, Dr Vince Cable MP, said "The number of distressing stories relating to individuals who are unable to deal with high levels of debt is growing. So far the problems of personal debt have seemed manageable because interest rates have been low, house prices high and unemployment low. But this could change rapidly. It is deeply worrying that the relationship between debt and income is at an all time high and problems of debt servicing and extreme debt are growing."

Mr. Cable further said "The Government has frankly been complacent on this issue.Today I am outlining 10 clear policies for tackling the ever-growing problem of consumer debt and the associated bubble in the housing market. The Government must urgently take action to improve economic stability and banking regulation so that such debt levels do not spiral out of control and consumers are clear on how much they have borrowed. There must be safety nets in place should the housing market collapse and many find themselves unable to pay their mortgage.

Local Lib Dem spokesman, Cllr Duncan Hames has welcomed the action plan:

"Here in West Wiltshire many families are suffering from an intolerable debt burden built on irresponsible lending. The local Citizens Advice Bureau reports a dramatic rise in the number of residents going to them with their debt problems. The government must take action before debt undermines the strength of the economy as we saw with negative equity in the last recession under the Conservatives."