A Daily news digest by Jasper van Santen

Families must accept share of blame for Britain’s woes – Telegraph

In Economy, News on May 4, 2012 at 00:13

British households that borrowed too much money must “accept responsibility” for their role in the current economic troubles, a senior Cabinet minister warned last night.

Families must accept share of blame for Britain’s woes 

This man is preaching personal responsibility. I like it.

Mr Hammond, speaking to The Daily Telegraph on an official visit to Germany, said that households must also accept that they played a role in the decisions that led to the crisis.

“People say to me, ‘it was the banks’. I say, ‘hang on, the banks had to lend to someone’,” he said. “People feel in a sense that someone else is responsible for the decisions they made. Of course, if banks don’t offer credit, people can’t take it. [But] there were two consenting adults in all these transactions, a borrower and a lender, and they may both have made wrong calls.

“Some people are unwilling to accept responsibility for the consequences of their own choices.”

He added that individuals, companies and governments were all guilty of excessive borrowing. We allowed our expectations to run away with us,” Mr Hammond said. “We started living a lifestyle both in private consumption and in public consumption that we could not afford. We borrowed to top it up … now the day of reckoning has come and we are adjusting.

“Households were spending more than they earned. That’s why household debt rose.”

The attempt to persuade indebted households that they should share responsibility for the crisis is a risky strategy at a time when Conservative ministers are facing accusations that they are out of touch with ordinary Britons.

Mr Hammond was a successful businessman before entering politics, amassing a multi-million-pound fortune from interests including property development. But he insisted it was right to highlight the role played by household borrowing, including mortgages.

“It is a tough message but we are still, by some margin, the most indebted nation on earth in terms of household debt,” he said.

 

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