Clegg hits out at evils of debt

Ever since it was formed, the coalition government has emphasised how its primary aim is reducing the level of public debt in the country. But while this has been a much-debated topic, it is not the only sort of debt the administration is keen to reduce.

In a speech today (February 4th) on the government’s economic plans, deputy prime minister Nick Clegg repeatedly stated that in fact it was not just public debt that has been part of the problem. Rather, business and personal debt have been as well, combining to produce a “toxic legacy” of failed economic policy.

Mr Clegg’s argument was that the restructured economy – which would be based on new scientific development, green industries, more exports and a greater spread of wealth and job creation away from London and the south-east – needs to be “one built on enterprise and investment, not unsustainable debt”.

Indeed, personal debt was mentioned frequently in the speech, with the point that economic growth could not be based on people borrowing beyond what they could afford to fund their consumer spending, as this was by nature impossible to sustain.

While the overall economic plan may be debated at length, many people will have no doubt that they have borrowed too much and some may find they need debt management measures or even individual voluntary arrangements (IVAs) to deal with this.

Indeed, today has also seen figures from the Insolvency Service showing that IVAs overtook going bankrupt as the most favoured means of becoming insolvent in the final quarter of 2010.

If too much debt has been the problem undermining Britain’s economy, it seems those who are deepest in it are increasingly looking to find new ways of dealing with it.

By Amy White