Dani Garavelli: The penny has dropped with the nation’s debt crisis

THE other day, I was sitting at traffic lights looking at the wing mirror of my car, which is currently held on with duct tape, and thinking for the hundredth time that it would be better if we could get rid of the old rust-bucket before winter sets in, when a Ferrari pulled alongside me. Now, I’m not given to envy.

I don’t begrudge those who have worked hard for their material possessions, even if they seem shinier and more desirable than mine.

But coinciding, as it did, with the Tory Party conference, and David Cameron’s swithering over whether or not to tell British citizens to pay off their credit card debts, the encounter did make me think. If so many of us are struggling; if – as the Governor of the Bank of England Mervyn King suggests – we are on the brink of the biggest slump ever, how come there are so many expensive cars on the road? If school-leavers are facing a hopeless future, how come so many of them can afford to go to music festivals? If people are struggling to pay food bills how come city centre restaurants are still heaving on a Saturday night?

Could it be that when Cameron tells the country it needs to tighten its collective belt (just weeks after his fifth holiday of the year); when he says “we’re all in this together” (while spending £700,000 of taxpayers’ money on revamping Downing Street) he makes people more aware that they are being asked to make sacrifices to tackle a financial crisis that is not of their making? Why should they live a life of austerity when bankers are still netting six-figure bonuses? Why should they pay off their credit cards when independent trader Alessio Rastani boasts a recession is just another opportunity for the rich to get richer?

Some people, of course, have had no choice but to change their spending habits. Those who have lost their jobs or fear they might will be watching every penny. Poor results posted last week by Sainsbury and Tesco show some families are now cutting back on groceries. But those people who are struggling to make it from one pay or benefit cheque to another, are in no position to pay off credit card bills. As for the rest: why should they be worried about tackling their personal debt when the government is making such a poor job of sorting out the national one? And isn’t the fact that fewer people are borrowing or spending the reason growth stalled in the first place?

I don’t know the answer to these questions, But what I do know is that Cameron’s speech was a PR disaster. By the time his spin doctors realised his hectoring of the electorate on their personal debts would play badly, it was too late. Pre-released excerpts from his speech meant everyone knew what he planned to say. Revising only made him look weak and indecisive. And the new version – in which he suggested households were already clearing their debts – came over as patronising.

I, too, found the tone offensive; although I was not one of Cameron’s targets. Not only am I not in debt, but I have never owned a credit card; I have paid into a pension since I started work; knowing that I couldn’t pay more than I’d signed up for, I fixed my mortgage rate; and whenever I had spare cash I paid it into an ISA.

But it’s financially cautious people like me who have done worst out of this economic crisis; we didn’t get the benefits of conspicuous consumption in the boom times and now we’re left shouldering the responsibility for other people’s profligacy. I’m paying way over the odds on my mortgage, my pension’s probably worthless and the annual interest on my tax-free savings wouldn’t buy me even a month’s worth of petrol.

According to moneysupermarket.com, Cameron is right – an increasing number of people are trying to sort out their personal debt at the expense of planning for the future. The comparison site says one in four is paying more than 40 per cent of their wages on non-mortgage debts with the average amount paid off per person per month now standing at £322. Still the Prime Minister’s plea for economic prudence fails to move me; I’m not persuaded by his insistence that not spending money is the way to go and my attitude towards living within my means has changed forever.

In truth, when it’s all over and our pockets are jingling once more, I probably won’t invest in a Ferrari. As Top Gear so ably demonstrates, flashy sports cars are the preserve of men who have been short-changed in the trouser department. Nor will I run up a huge credit card bill. But if I ever have any spare cash again, I won’t shy away from spending it. I won’t miss out on treats to put a little bit extra in my savings. I won’t pass on that once-in-a-lifetime holiday for fear university tuition fees might be introduced.

Because if there’s one thing I’ve learned from the economic crisis it’s not the importance of frugality, it’s that there are no rewards for being sensible.