It is surprising that they don’t seem to think we can make the connections.
Two articles have leapt from the national media to trouble us this week. The first, in the Telegraph, states that the economic recovery that has made George Osborne so proud is built on mounting consumer debt and a housing bubble.
(This is something that has been known to us for several months, in fact. Osborne’s ‘Help to Buy’ scheme is the principle cause of the bubble, and it was recently revealed that there is no way to slow it down. Let’s not forget that the taxpayer is underwriting the scheme – so when the bubble bursts we will have to pay both as individuals and as a nation!)
The second article is on the BBC News website, which tells us that up to 1.4 million extra households could face “perilous” levels of debt when interest rates begin to rise – in addition to the 600,000 families already in that situation.
(It adds that mortgages are the largest source of household debt.)
Vox Political has long held the belief that the Conservatives have been trying to increase personal debt. Whether the plan was to decrease the national debt in this way is debatable as the deficit has plateaued at around £120 billion for the last few years.
When Mark Carney became governor of the Bank of England, he said he would not raise interest rates until unemployment falls below seven per cent – which might provide a bit of breathing-room for those having to deal with mounting debt.
However a few months ago, at the Conservative conference, we heard that George Osborne wants to falsify unemployment figures by putting the long-term unemployed on Workfare indefinitely.
If a person is put on Workfare, they are removed from unemployment statistics, even though they only receive social security payments for the work they do.
We already know that figures show a larger fall in unemployment than commentators had anticipated, so it now stands at 7.4 per cent, according to official statistics. Putting hundreds of thousands more people on Workfare should cut that figure below Mr Carney’s benchmark.
Meanwhile, household debt is due to rise to 160 per cent of income by 2018, partly because wages are dropping in comparison with inflation. The number of households using half their disposable income to repay debt could rise from 600,000 to 1.1 million if interest rates rise to three per cent (according to the Resolution Foundation, as quoted in the BBC piece) – and to two million if rates hit five per cent.
In the light of this information we must ask ourselves: Is this a Tory trap? Are they trying to create conditions in which more people on low or middle incomes become indebted to the rich, just by fiddling interest rates?
What do you think?
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