§ Lord Steel of AikwoodMy Lords, I am not sure whether I should preface my Question with the words, Mr Presiding Officer, but perhaps I may ask it any case.
The Question was as follows:
To ask Her Majesty's Government what view they take of the current extent of credit card indebtedness in the population.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)My Lords, the United Kingdom credit market remains one of the most competitive in the world. Although figures show that borrowing is increasing in real terms, the vast majority of consumers manage their credit successfully, using it as an enabler, and do not become over-indebted. However, in the light of the increase, the Government are constantly monitoring the situation, and several government departments are working together to ensure that those needing help have access to it.
§ Lord Steel of AikwoodMy Lords, I am grateful for the Minister's reply, but is he aware of the National Association of Citizens Advice Bureaux report, published last month, entitled, In Too Deep? It reported a 47 per cent increase in debt problems during the past five years, much of it credit card-related, with a quarter of young people aged 20 to 30 shown to be owing about £25,000 or more. Does he accept that that report states that among poorer sections of the population, credit card debt led to physical and mental illness and family breakdown? Even the better off are being lured by mail bombardment by credit card companies to take out more credit cards. Are the Government really monitoring that sufficiently closely?
§ Lord Sainsbury of TurvilleMy Lords, I am aware of the report. It is important to realise that in spite of that very large increase, there has been no increase—in fact a slight decline—in the number of people in arrears on their credit card payments. Nevertheless, we take the report seriously and will be consulting during the summer on ways in which consumers can be enabled better to understand the costs of borrowing.
§ Lord SaatchiMy Lords, the Minister said that consumers were not getting too indebted. Has he read the figures from the Bank of England, the British 518 Bankers' Association, the Council of Mortgage Lenders, the Nationwide Building Society and the volume on housing of the 18 studies on the euro? They show that second mortgages now account for half of all mortgages; 4 per cent of total UK gross domestic product; and approaching 10 per cent of all consumer spending on credit cards. Does the Minister—or his colleagues—ever suffer a pang of guilt about consumers mortgaging themselves to the hilt just so the Chancellor can tick his consumer spending forecasts?
§ Lord Sainsbury of TurvilleMy Lords, the noble Lord should have listened to what I said. I did not say that people were getting over-indebted or less in debt. Clearly the consumer credit figures have risen extremely fast. What I said was that there is no evidence that more people were in arrears—in fact, the number is falling. That suggests that because of the current low interest rates, people are not getting into the difficulties that they did when interest rates were 15 per cent, for example.
§ Lord EzraMy Lords, the Minister mentioned that the situation is being carefully monitored. What does monitoring mean? It is a comforting concept that people are watching over the situation. None the less, at what stage does monitoring reach the point at which action needs to be taken? Can he enlighten us on that?
§ Lord Sainsbury of TurvilleYes, my Lords. Monitoring means looking at the figures, which are important indicators of whether things are going wrong. If the number of people getting into arrears on their payments was beginning to rise sharply, one would clearly be concerned and action would be appropriate. Equally, the fact that the amount of indebtedness has risen means that we want to be especially careful that the terms on which people are borrowing are right. That is why we have taken a whole series of appropriate actions, including setting up the National Debtline pilot, in response to that substantial rise in the debt.
§ The Earl of NortheskMy Lords, thinking about the important indicator figures, can the Minister tell us what is the level of the savings ratio now compared with what it was in June 1997?
§ Lord Sainsbury of TurvilleMy Lords, I cannot; I shall write to the noble Earl with those figures.