Brown urged to end 'reckless lending'
30 July 2004
The Liberal Democrat shadow chancellor has been on the offensive again, this time urging Gordon Brown to tackle reckless lending.
His comments follow the announcement by the Bank of England that personal debt has now reached £1 trillion.
Additionally, according to Nationwide, house prices rose by 2.1 per cent in July and have soared by 20 per cent over the last 12 months.
Dr Vince Cable said: "Rising lending by banks and building societies is fuelling the housing boom. Banks are adding fuel to the fire by setting aggressive sales targets to employees."
He added: "Home owners are walking an economic tightrope. Today the Bank of England announced that we were £1 trillion in debt and 80 per cent of this debt is secured on dwellings. Yet, the IMF and others have warned that house prices may be seriously overvalued."
"If interest rates continue to rise, as they are expected to, or house prices fall a number of homeowners could find themselves in enormous difficulty," continued Dr Cable.
He concluded by attempting to motivate the government to act now: "It is high time the government took action to protect ordinary homeowners against irresponsible lending."