At the launch of a major national campaign at Twickenham Citizens' Advice Bureau, LibDem leader, Charles Kennedy MP, has called on lenders to give a tiny proportion of their profits to support those experiencing financial hardship

Accompanied by local MP, Vincent Cable, who is LibDem Shadow Chancellor,. Charles Kennedy said:: "People who find themselves in debt need to be able to access independent financial advice as soon as they are in difficulty."

With personal debt levels at £1 trillion - the equivalent of over £16,500 per man, woman and child - the LibDems are calling on banks to act responsibly towards their customers.

"It is essential that good independent financial advice is available easily and locally," continued Mr Kennedy. "Being able to access financial advice before things spiral out of control can help people avoid the many traps that may lead to further debt.

"I am asking banks and other lenders to contribute as little as 0.01% of their profits to increase the capacity of financial and debt counselling services. This is not a call for more Government regulation. It is a call for Chief Executives, shareholders and senior managers of those organisations to put a proportion of their profits back into the community to help those who might be affected by financial hardship."

Dr Cable said: "The debt bubble facing the British public is truly awesome. I doubt many of us can really picture £1 trillion. Even the interest we pay on that debt is beyond comprehension, running at £6 billion every month. The ratio of debt to income is at unprecedented heights, which is only sustainable if interest rates remain unusually low.

"It is clear that this borrowing boom has been fuelled by the ease at which we are now able to obtain loans, mortgages and credit cards. We have already been through major crises in personal finance with endowment mortgages and pensions both of which were driven by lenders receiving commission for sales.

"There is a real danger that another crisis is erupting. People are being advised to take out mortgages, credit cards and other debts unaware of the fact that bank employees may have aggressive sales targets to meet. This situation must be addressed.

"It is only right that financial institutions do the decent thing and give money to fund the provision of financial and debt advice to those who may be struggling to repay their debts. Networks of advisory centres already exist throughout the country and it is essential that we increase their capacity so that they are able to deal with the growing numbers of debt enquiries."

It has largely been the Citizens' Advice Bureaux across the land that have been trying to help people cope with debt problems by giving them advice and guidance.

Monday, August 2, 2004

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