John McDonnell issues stark warning over soaring household debt

Posted On: 
27th December 2017

Brits face being lumbered with an eye-watering £19,000 in unsecured debts per household by the end of the current parliament, John McDonnell has warned.

Shadow Chancellor John McDonnell
Credit: 
PA Images

The Shadow Chancellor said families were already “struggling over the Christmas period” and said the Conservatives had “no real answers to tackle the debt crisis”.

Unsecured borrowing rose to more than £14,000 per household this year and new analysis from Labour predicts it will top £15,000 next year and £19,000 by 2022.

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Mr McDonnell told the Guardian: “The alarming increase in average household debt already means many families in our country are struggling over the Christmas period.

“The Tories have gripping our country and have no solutions to offer those struggling to get by as prices run ahead of wages.

He added: “The next Labour government will introduce a £10 per hour real living wage, scrap student fees, end the public sector pay cap and cap interest on consumer credit to build an economy for the many, not the few.”

The figures produced by Labour are based on official statistics - which show the total amount of unsecured debt in Britain was £392.8bn in the third quarter of this year - and government forecasts.

Unsecured debt covers things like credit card debt, store cards, payday loans and bank loans.

It came after left-leaning thinktank the Resolution Foundation said no noticeable wage growth is likely until the end of the 2018.

Using official figures they projected an end to the pay squeeze of this year but said real wage growth is set to be zero across 2018 as a whole.

Wage growth took a hit in the second half of this year as inflation continued to edge up in the wake of the vote to leave the EU.