Giles Fraser: Borrowing is no way out of the credit crisis

03 December 2008

SPEAKING TO the CBI last week, David Cameron drew attention to the fact that we now have the highest levels of personal debt in the world. The Bank of England’s statistical release “Lending to individuals: Sep­tember 2008”, reports that members of the public now owe £1.457 trillion, £1.219 trillion of which is secured on dwellings, the value of which con­tinues to diminish. Leaving aside mortgages, each of us owes an average of £10,000.

The credit-reference agency Ex­per­­ion has recently produced a geographical league table of our indebtedness. Richmond-upon-Thames has the most personal debt in the country, Putney comes second, Kingston third, and Wandsworth fifth. They used to say that the Russian nuclear missiles were targeted at the hot-dog stall in the open space in the middle of the Pentagon. In economic terms, Putney is that hot-dog stand, and it sometimes feels as if the credit crunch is aimed directly at us.

On average, each of my parish­ioners carries £47,000 of debt. Many have huge mortgages, and the value of their properties, against which much of this debt is secured, continues to fall. I know of a great many people here who are going deeper and deeper into the red every week, as they struggle to keep up with massive mortgage repayments. On top of this have come the redund­ancies. Every Sunday in church there is another story of so-and-so who has lost his job.

My personal circumstances are not the same as those of many of my parishioners. We don’t own a house, but we have a couple of thousand pounds worth of debt, although even this is proving as difficult to pay off as losing those extra pounds of weight I promised to shift. And, just as this time of year encourages me to eat more, so, too, this time of year encourages us all to take out more loans.

Indeed, it seems that the Govern­ment is trying to persuade us that more shopping is our patriotic duty to save the economy. I understand the logic — we need to keep the wheels of industry turning — but if huge levels of debt are what got us into this mess in the first place, I find it unsettling to be told that we can buy our way out of it by borrowing more.

So let’s all plan for a much simpler Christmas. Perhaps the up-side of the credit crunch will be that we come to remember what Christmas was all about before it became all about money. Let us clear out the expensive rubbish, and allow our­selves to focus on the story of a baby, born into poverty, come for the salvation of us all. With our hearts set here, all our money worries are put into proper perspective.

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