Cameron changes tack on debt speech

The Prime Minister yesterday retreated from his plans to tell the public to pay off their credit card and store card bills after previews of his Conference speech were criticised.

David Cameron dropped calls to pay off debt, after members of the public protested that those in the red simply cannot afford to clear their debts.Mr Cameron originally planned to say: “The only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills.After the protests, the Prime Minister changed his speech to, “The only way out of a debt crisis is to deal with your debts. That’s why households are paying down their credit card and store card bills.”According to Downing Street aides, it was never Mr Cameron’s intention to lecture the public about credit card living, but instead to highlight that the public are already paying down their debts. However, they acknowledged that the original wording was open to misrepresentation. Furthermore, the Institute for Public Policy Research has indicated that the economy would actually shrink if everybody were to pay off their debt too quickly as it would wipe up to 15 per cent off the national income. The Chief Executive of Money Advice Trust, Joanna Elson, also told the Mail Online that the public could find themselves in deeper financial trouble if they attempt to make repayments too quickly. In the Prime Minister’s speech, he did address the public’s concerns, saying: “It is an anxious time. Prices and bills keep going up – petrol, electricity, the weekly shop.

“On the news it’s job losses, cutbacks, closures. You think about tuition fees, house prices, the cost of a deposit, and wonder how our children are going to manage.”

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PM risks accusations of hypocrisy over debt management policy in Davos speech

Tuesday 1st February 2011

David Cameron used his speech at the World Economics Forum in Davos, Switzerland, to broach the topic of debt management in the UK despite government plans to imminently scrap the Financial Inclusion Fund.

Speaking on Friday, the Prime Minister said the country needs “an economy based not on consumption and debt but on savings and investment”, a statement that some commentators have interpreted as an indication that further measures may be taken by the coalition government to try and address the financial difficulties facing thousands of Britons. Personal debt in the UK has reached nearly £1.5 trillion and insolvency rates have also risen to record levels.However, such hope that David Cameron might attempt to assist Britons with their debt problems is rather undermined by the Legal Action Group’s (LAG) report, released yesterday, which revealed that the Financial Inclusion Fund (FIF) will end in March due to impending cuts to legal aid and local government grants.Around 100,000 people with debt problems are assisted each year by the 500 advisors paid for by the Financial Inclusion Fund, who are based in the Citizen’s Advice Bureaux and other not-for–profit advice centres. The majority of these advisors will now be made redundant.Teresa Perchard – Director of Policy at the Money Trust, a charity which promotes independent help for people with debt problems – said to the BBC: “It just doesn’t stack up: unemployment is rising, the economy is in a difficult situation and there is an increasing demand for debt advice. To lose frontline services in local communities at this time doesn’t seem to make sense.”A spokesman for the Treasury said to the BBC that a new web and phone based service would be introduced and would be able to refer cases to specialists. "We want to make sure that individuals facing financial difficulty can get advice early, rather than wait until their problems become much more difficult to resolve," he added. 
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Posted in: accusations,Davos,hypocrisy,Management,policy,risks,speech