Comments: Will Darling be a ballot box hero?

there is no anger about inheritance tax. a few millionaires with fortunes they did nothing for, reduced by a little. bizarre.

Brown is responsible for squandering billions for nothing. The public have no better services than when he came to power. health, education, pensions, household expenditure are all more expensive.

the chickens are coming home to roost and I hope Gordenron Brown is there to face the music. I notice Bliar has done a runner before the sith (anag.) hits the fan.

Posted by dave at October 7, 2007 02:23 AM

there is no anger about inheritance tax. a few millionaires with fortunes they did nothing for, reduced by a little. bizarre.

Brown is responsible for squandering billions for nothing. The public have no better services than when he came to power. health, education, pensions, household expenditure are all more expensive.

the chickens are coming home to roost and I hope Gordenron Brown is there to face the music. I notice Bliar has done a runner before the sith (anag.) hits the fan.

Posted by dave at October 7, 2007 02:23 AM

Wait until the consumer debt (1.33 trillion, or 167% of GDP)comes home to roost

Posted by F.Fox at October 7, 2007 08:19 PM

Thanks for Paul C's comment on betting odds on the previous post, which was useful. Otherwise, a pretty poor standard of comment coming through - all these chickens coming home to roost. 1.33 trillion is not only slightly less than the running total for household debt - the overwhelming bulk of which is secured - but it is also less than 100% of GDP. As for inheritance tax, if you think you have to be a millionaire to pay it, either you don't know anything about the tax system or you've got a good accountant. Actually it is probably the millionaires who don't pay it.

Posted by David Smith at October 7, 2007 08:32 PM


The thing is with the secured debt is that its secured against assets that's value is mearly based on opinion, supported by available finance. What will happen to the value of the assets if the credit crunch REALLY starts to bite?

The asset value is just current opinion, where the debt incurred to aquire the asset is very real.

Posted by Dan at October 8, 2007 11:49 AM

People often say this, but it doesn't take us very far. The value of the housing stock - 3,800 billion - would have to fall a very long way to come anywhere close to the 1,100 billion or so of mortgages secured on it.

Posted by David Smith at October 8, 2007 12:24 PM

If a house is repossessed, the lender can't go after someone else's equity can they!

The secured debt in this country is not evenly distributed!!!


You know the secured debt vs housing equity is a poor guide.

Posted by James at October 8, 2007 01:16 PM


Well when the US Sub Prime (not to even mention the UK Sub Prime) starts affect the country, you'd probably be lucky to get any money from anywhere, as Northern Rock found. So when this does finally unwind I think it's fair to say values will not only collapse, but collapse quickly as there simply won't be the money available to support the prices.

I have to ask why 10bn worth of BoE loans were shunned the other week by most banks? Was it the horriffic cost that put the banks off, or did they simply look at it and say, on top of the sub prime woes, we're not going to take on increased exposure at that exorbitant cost when we don't even know the extent of our current exposure in our own back yard? It's kinda like knowing you've been shot in the foot somewhere, and taking a loan of the BoE is like shooting yourself in the other foot.

Regards all

Posted by Dan at October 8, 2007 03:31 PM

Sorry David, I will try to elaborate:

* Total UK personal debt at the end of August 2007 stood at 1,363bn a growth rate increase to 9.9% for the previous 12 months which equates to an increase of 115bn.

* Total secured lending on homes at the end of August 2007 stood at 1,148bn. This has increased 10.8% in the last 12 months.

* Total consumer credit lending to individuals in August 2007 was 215bn. This has increased 5.5% in the last 12 months.

* Total lending in August 2007 grew by 9.5bn. Secured lending grew by 8.5bn in the month. Consumer credit lending grew by 1.0bn.

*Average household debt in the UK is 8,873.
*Average household debt in the UK is 56,309.
*Average owed by every UK adult is 28,707 (including mortgages).
*Average outstanding mortgage for the 11.8m households who currently have mortgages is 97,209.
*Average interest paid by each household on their total debt is approximately 3,725 each year (this equates to 9% of take home pay).
*Average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to 4,524 per average UK adult at the end of August 2007.
*Britain's personal debt is increasing by 1 million every 4 minutes.

Oh and by the way:

*77 properties will be repossessed today
*317 people today will be declared insolvent or bankrupt
*2,750 County Court Judgements (CCJs) will be issued
*Citizen Advice Bureaux will deal with 6,600 debt problems, enquiries to them having hit a record high, increasing by 20% in the last year to 1.7 million in 2006/07 and doubling in last 10 years and more than 7,716 loan repayments are going unpaid every day.

*12.7 million people have taken out a loan to consolidate some or all of their existing borrowing and 8.4 million people (66%) continue to build up even more debt.
*14,000 properties (77 a day) were taken into possession in the first six months of 2007. This rose by nearly 18% compared with the previous half-year, and nearly 30% compared with the first half of 2006.
*The number of mortgages in arrears of three months or more at the end of June 2007 rose to an estimated 125,100, up 4% compared with the end of December 2006.
*8.2m British adults are in serious debt and 2.1m are struggling with repayments according to the latest quarterly research commissioned by Thomas Charles and conducted by YouGov. They found that 18% adults in Britain have 10k or more of unsecured debt, equivalent to 8.2 million adults. This is a rise of 30% on last year.
*Over two million British consumers (6%) cannot quantify how much debt they're in, according to research carried out by Unbiased.co.uk.
*Around a quarter of working Britons will be refused loans, mortgages and credit cards by 2011 as they struggle with mounting debts. Analyst Datamonitor said the number of borrowers blacklisted by mainstream lenders will increase from 7 million to 8.6 million over the next four years.
*Borrowing costs hit a six-year high as the Bank of England pushed up interest rates in July 2007 by a quarter-point to 5.75% following a jump in inflation. This was the fifth rise in 12 months.

*More than 160,000 people contacted the Consumer Credit Counselling Service (CCCS) in the first half of this year - an increase of 18.5% on the same period last year.
*Personal debt as a proportion of income has risen from 105% in 1997 to 164% in 2006 - the highest ever recorded and the highest in the developed world.
*The number of county court judgments (CCJs) has risen to a near 10-year high. A total of 247,187 consumer debt related CCJs were issued in the first three months of the year - the highest quarterly total since the summer of 1997.

partners.
*Citizens Advice Bureau (CAB) clients have an average of 13,000 of debt which is nearly 17.5 times their monthly income. On average it would take CAB clients 77 years to pay back their debts in full.


And Mr. Brown doesn't want to go to the country? Or was it that he really did but couldn't? Perhaps he was worried about losing his seat to Alex Salmond's SNP and that was the real reason why?


Posted by F.Fox at October 8, 2007 03:36 PM

It's no use uncritically churning out statistics, without setting them in some kind of context, and without making a judgment on which ones make any sense. The one about more than 8m people being in serious debt, for example, is just naive extrapolation. The number of properties in arrears at the end of June was down on a year earlier. Yes, 14,000 properties were repossessed in the first half of the year but this was just 0.1% of mortgaged properties. If 77 homes were repossessed today, it is also the case that more than 1,000 first-time buyers moved into their new homes.

It is a fair point to say that debt and assets are not perfectly aligned - some people are asset-rich and have no debt, and vice versa. But it is also the case that the rise in mortgage debt over the past decade has lagged well behind the rise in house prices, giving the vast majority of people a substantial equity cushion.

Posted by David Smith at October 8, 2007 07:02 PM

Hi David,

I'm curious as to what you think the main difference in economic policies are between Labour and the Conservatives, if any? I would suggest there isn't a great deal of difference, and I doubt the economic situation would be much different now whoever was in power.

Also, I always thought there had to be a compelling reason or issue to call an election? Is there one (besides the war, which both major parties agreed upon).

Regards

Posted by Walt at October 8, 2007 09:03 PM

We are seeing some differences, particularly on tax - whatever happens today Alistair Darling can't go as far as George Osborne on inheritance tax.

Prime ministers can call elections at any time or for any reason, but I agree that the lack of necessity could have rebounded badly on Gordon Brown.

Posted by David Smith at October 9, 2007 10:08 AM

But not too many differences in economic policy surely...I think the fact that inheritance tax is an issue both Labour and the Conservatives are giving so much attention, is just one reason as to why so many people have become politically alienated.

By the way, it is difficult for the average person to swallow the government line about fiscal competency when so much money has been wasted on the war, ID cards, the tax credit fiasco, NHS computers and I'm sure someone could add to that list. Add in a ridiculously over budget Olympic games. How much of the 'government waste' Alisitair Darling alluded to is there own doing?

However, despite the lack of necessity of calling an election now, it may have been Brown's best chance. I seriously doubt the economy is going to be any better when the election does have to be called.

Posted by walt at October 10, 2007 07:30 PM

Any better Wait?

Some people seem to think that the credit crunch is only just warming up...

Posted by F.Fox at October 11, 2007 12:08 PM