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Britain faces terrible legacy of debt addiction - Clegg

November 3, 2008 9:45 AM
Originally published by UK Liberal Democrats

Britain is addicted to debt and faces a terrible legacy as the recession begins to bite, Liberal Democrat Leader Nick Clegg warns today, as new analysis from the Liberal Democrats shows that total personal debt has risen by £1 trillion since Labour came to power.

This figure equates to an additional £10m for every hour Labour has been in government. Britons now owe £1.4 trillion in total, with debt repayments of nearly £95bn each year, equating to £3000 per second.

Commenting, Nick Clegg said:

"The fact that Britain's economic growth has been built on a mountain of personal debt means that we are now especially vulnerable to the global economic downturn."

"While we may have comparatively lower levels of public debt than other developed countries, Britain's level of personal debt is unrivalled anywhere in the world outside of the US.

"Labour and the Conservatives are fighting over the wrong bone: the real issue here is Labour's terrible legacy of personal debt. We must break our debt addiction before our children get sucked into it too."

The Liberal Democrats are supporting a plan for the BBC to immediately launch a campaign of public education through all its media channels, directing people to the appropriate advice and information to manage their finances

Nick Clegg explained further, saying, "We need to see a huge publicity blitz on this issue from the BBC. If public sector broadcasting is to mean anything, it should mean stepping up to help in a public crisis."

"And financial literacy has to be a much bigger part of education. We have to be honest: maths for life is more important than trigonometry for most people."

As part of this "financial literacy" plan, the Lib Dems are advocating a comprehensive network of free financial advice centres, funded 50-50 between the banks and the Government, to ensure everyone has access to impartial information and advice regarding extreme debt cases; issues around benefit and tax credits; and pension advice and repossessions.

Also, in order to put money back in the pockets of struggling lower and middle income families, the Liberal Democrats are suggesting a 4p cut in the basic rate of income tax, paid for by closing tax loopholes benefitting the wealthy.