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Household debt in the UK has reached a record £1.43 trillion, according to the BBC. What a marvellous achievement for Gideon George Osborne to put next to his already-record public net debt of £1.212 trillion (excluding interventions) or £2.184 trillion (including them).
If you’re surprised at that, don’t be – he needs to pretend that there isn’t any money so he can cut any services that are still left in the public domain after the fire sale of the last few years.
The Tory plan was always to increase private debt. Of course it was – if you cut public spending for people on the breadline, then they go into debt. Why do you think Wonga.com’s owner Dawn Capital is such a prolific contributor to Tory Party funds, with £537,000 in known donations this time last year?
The rich are shielded from debt problems in the same way they are shielded from taxation, thanks to the way our tax laws have been rewritten in their favour – all their money is safely tucked away in tax havens and can’t be touched.
On average, each adult in the UK owes £28,489. Some owe much more than that, though. Yr obdt srvt doesn’t owe a bean to anyone, despite being very poor, so that’s already £28,489 to be spread among everyone else. Mrs Mike isn’t in debt either.
The BBC report cautiously suggests that the record debt level “might increase concerns that the UK’s economic recovery [you know, the one they keep talking about on the news and in Parliament as if it actually exists] is based on increased borrowing, rather than growth sustained by rising incomes” – which of course is correct.
According to The Money Charity, total net lending by UK banks and building societies rose by £1.9 billion in September 2013 – that’s just in one month.
Over the four quarters to Q2 2013, they wrote off £3.67 billion of loans to individuals. In Q2 2013, the daily write-off was £7.61 million.
Based on the latest available data, every day in the UK 285 people are declared insolvent or bankrupt – that’s one every five minutes; 84 properties are repossessed; 1,447 people lost their jobs and eight people became unemployed for more than 12 months; 141 mortgage possession claims are issued and 113 mortgage possession orders are made; and 431 landlord possession claims are issued and 319 landlord possession orders are made.
The benefit system helps nobody. It has been redesigned specifically to push people further into debt – the cap on benefit rate increases to one per cent per year means people are two per cent worse-off for every year it continues, while inflation remains at current levels.
It is in this atmosphere that words written in this blog more than a year ago come back to haunt us all: “What do people do for money when the State fails them and they can’t get work? They fall into the debt trap.
“High-interest, doorstep lending to poor people is Britain’s latest – perhaps only – boom industry. In other words, the government’s sick benefits regime is forcing the poor into debt to organisations that will take away everything they have left, in order to make up payments on a loan whose interest rate they probably made up on the spot.
“And when they’ve taken everything, what do you do then?
“Do you really want your kids to starve?”
Mike Sivier's blog 