Financial problems

It's about now that the credit card bills and the bank statements reflecting the cost of Christmas thud onto the doormat and the real New Year hangover - the financial one - makes heads throb.

All the signs, born out by enquiries and referrals to the Citizen's Advice Bureaux, MPs offices and, of course, the courts, indicates that personal debt has risen, under this Government, to an alarming and all-time high at some £1.2 trillion and that the consequences for many in Margate/Herne Bay, may prove at best painful and at worst disastrous.

The fact of the matter is that credit is too easy to obtain. Perversely, if you have not got a credit card it is quite difficult to obtain one but if you already have one, or two, or three all bulging with debt it is perfectly possible to get another and either transfer borrowings or run up still more credit.  And if you have an account the Bank is only too ready to offer you overdraft facilities or other borrowing that may well bear no relation to income or resources.

The Government, also, has a responsibility to bear. While preaching prudence it seems almost as though Downing Street has taken a view that if people are shopping and spending, even on credit and with other people's money, they will have a sense of false affluence and well-being that will pay political dividends.

The real cost of living is also rising. While the "official" rate is 2.7% Gordon Brown's transfer of the figures from the traditional Retail Price Index (RPI) to a "Consumer Price Index" (CPI) has meant that some of the fastest-rising costs, such as housing and council tax, have been taken out of the equation!  Some pensioners, for example, are facing an inflation rate of three times the official figure at 9%.

Add Housing and Council Tax back in, together with increased rail travel costs for commuters in East Kent, stealth taxes (an additional £9,000 for an average  family since 1997), high gas prices and the like and it's not hard to see why people are in trouble.

Much of this ends, frequently literally, in the debt collector calling and in tears.

The Cost of Living Campaign launched in this New Year by David Cameron is not going to solve this backlog of financial problems overnight. (The CAB has calculated that on average it would take 77 years to clear their debts in full!)  His proposals do, though, offer six specific areas for action - gas prices, housing costs, public transport prices, sharing the proceeds of national growth, over time,  through lower taxes, linking state pensions to growth in earnings and a plan to tackle debt through tighter controls over credit card companies and the cost of debt - that will lighten the load.

Unless we focus attention on this very real problem now Blair's "legacy" may well prove to be a nation literally and individually in the red.

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