British Debt Reaches One Trillion Pounds

9.07.00am UTC (GMT +0000) Fri 21st May 2004

Britain has reached an unwelcome milestone. The British people have collectively borrowed one trillion Pounds Sterling (£1,000,000,000,000) in mortgages, loans, credit cards and overdrafts, the Liberal Democrat Shadow Treasury Team has revealed.

The interest repayable on a loan of £1 trillion at an average 7.5% APR amounts to well over £6 billion every month. Some people could be paying considerably more than that - especially on credit card loans. British households and businesses now owe banks and other creditors as much as the total external debt of Africa, Asia and Latin America put together. Yet Chancellor Gordon Brown has failed to act to prevent irresponsible lending by banks and money lenders. This should serve as a wake up call for the sleeping Chancellor, Lib Dem Shadow Chancellor Vince Cable said.

Presenting a statement of account for all borrowing to the Chancellor at his Treasury offices, Dr Cable said: "Gordon Brown appears to have fallen asleep while Prudence has gone off with another man.

"Our borrow now, pay later culture has resulted in a new milestone for borrowing. The debt bubble facing the British public is truly awesome. I doubt many of us can really picture how much a trillion Pounds is. A trillion Pounds in ten pound notes placed end to end would stretch to the moon and back 18 times over.

Norman Lamb, Liberal Democrat Shadow Treasury Minister, added: "The interest paid on that debt amounts to £6 billion every

month. Consumers also find themselves faced with the threat of increasing oil prices, and rises in interest rates and inflation. Many people could find themselves in serious financial difficulty."

Mr Lamb added: "Gordon Brown must act to protect consumers from the growing debt burden. We are presenting Mr Brown with a ten-point plan for tackling household debt, which would protect consumers from unsustainable levels of personal debt and which would also protect the financial services industry from the threat of a boom and bust economy."