Government urged to lead on tackling debt

Vincent Cable, the Liberal Democrats’ financial spokesman, said that while banks may have been lending to the wrong people, the government had a role to play in sorting out problems.

“The government’s response to the debt crisis is to snipe at banks on individual areas of banking rather than taking a comprehensive look at banks’ profitability,” Mr Cable said.

“Instead of taking pop-shots at each other, both banks and the government must recognise that there is a common problem that each has helped to create.”

His comments come as the trade and industry minister Jim Fitzpatrick told the Financial Times that banks were to blame for poor lending.

However, Mr Cable said that good debt management in consumers is not just the responsibility of banks.

“There is now a serious household debt crisis and it is high time the government took the lead and got the major banks together to discuss how to deal with rising loan defaults and mortgage repossessions,” added Mr Cable.