Brown's legacy spiralling debt and waste - Cable

4.32.12pm GMT Wed 6th Dec 2006

Liberal Democrat Shadow Chancellor, Vince Cable MP

Speaking ahead of the Pre-Budget Report, Liberal Democrat Shadow Chancellor, Vince Cable MP said "Gordon Brown's legacy may be to leave his successor with two enormous problems - personal debt and government waste. Ten years of reasonable economic growth should not distract us from the storm clouds now gathering."

Personal debt in the UK has risen by £765bn, a rise from £21,500 to £50,000 per household, since Gordon Brown became Chancellor. This total is the same as the GDPs of Portugal, Belgium, Norway, Hong Kong and Argentina combined.

Liberal Democrat research has also unveiled that wasteful spending by the Government is now exceeding £30,000 a minute.

Commenting on the level of personal debt, Dr Cable said "For many people the Chancellor's legacy will be personal debt, which is spiralling out of control. Two million people now face extreme debts and the figure is still rising.

"This could lead to many families experiencing financial meltdown, and spell serious trouble for the housing market.

"A growing number of families are unable to meet their debt obligations and are drifting into arrears, personal bankruptcies and home repossessions.

"The Chancellor relies solely on interest rates to address this issue, and disclaims direct responsibility.

"There is a great deal of scope for the Government to help through a targeted programme of improved and genuinely independent financial advice. The Government can also ensure that debt data, including student debt, is pooled to stop irresponsible lending.

"The Government must act to stop non-verified mortgages and stop lenders from increasing credit limits and overdraft limits without borrower consent."

Commenting on waste in Government departments, Dr Cable said "Although Liberal Democrats have welcomed investment in public services, particularly health, education and policing, it is clear that substantial amounts of public money are not being spent properly.

"We have established that £30,000 a minute is being wasted. In a much tougher public spending environment, this will have to be cut, in order to create room for priority public spending."