Senior MPs have put pressure on the Government to set up an independent inquiry into the implications of Britain’s emerging debt crisis.
The current chairs of both the Business Select Committee and the Work and Pensions Select Committee have called for action to address the £200billion debt which has been racked up by UK households.
The vast sum amassed via credit cards, personal loans and finance deals is now at a comparable level with the debt that was accumulated prior to the financial crisis of almost a decade ago.
This has prompted Labour backbenchers Frank Field and Rachel Reeves, the latter of whom is a trained economist, to reiterate calls for a far-reaching investigation into the potential risks.
Mr Field claimed that people in his own constituency of Birkenhead, in Merseyside, were being pushed into destitution by rapacious loan sharks and finance companies and action was needed to address the issues.
Speaking this week, the famously outspoken MP said: “We need a commission to assess the current situation. There are so many moving parts that a proper investigation goes beyond the remit of any single committee.”
Ms Reeves, once tipped as a future Chancellor, said: “It is the Government’s responsibility to understand the extent of the issue and who is the worst affected. When you have people right up the income scale being told by the banks not to worry that they can’t afford the price of a car, just borrow the money anyway.”
The Money Advice Service has suggested there are now 8.3million people in the UK grappling with problem debts.
In response to MPs’ comments, a Treasury spokeswoman said: “We have fundamentally reformed the consumer credit market so that the Financial Conduct Authority (FCA) now [has] robust powers to help consumers, such as protecting 760,0000 people with the new cap on payday loans.”
- Gibson Hewitt is a leading bankruptcy accountant. For advice on any of the issues raised by this article or our services more generally please do not hesitate to contact us.
