Clear off your card debt, says Cameron

In his leader’s speech to the Conservative Party conference, the Prime Minister will urge the nation to pay off personal debt to help boost the faltering UK economy.

The call comes in a year when personal debt, which has fuelled the economy, has reached almost £1.5 trillion and unemployment has risen to 2.5 million. Average household debt, excluding mortgages, is now more than £21,000.

Last night, consumer groups accused Mr Cameron of taking a simplistic and unrealistic approach to a problem exacerbated by public-sector pay freezes and growing unemployment.

A Citizens Advice Scotland spokesman said: “Scottish CAB advisers see people every day who are drowning in debt. The average debt among our clients is now well over £20,000.

“It is far too simplistic to say that everyone in debt should simply pay off their debts, and that would solve the problem. Most people who are in debt would love to do that, if only they could. But how can you pay off your debts if you have lost your job, or if your income is barely enough to cover your basic living costs from week to week? That’s the reality for many of the people we see.”

Mr Cameron’s keynote speech will also call on people to energise themselves and help lead the UK out of the crisis, describing his own role as a facilitator for others.

He will warn of a long road ahead, but in an attempt to alleviate the gloom, he will say that the current hardship will be worth it in the long run when the country’s economy is strong again.

But Mr Cameron is facing criticism for suggesting that people facing unprece-dented financial hardship were in a position to pay off their debts, particularly at a time when government borrowing rose by £15.9 billion in the 12 months to August, bringing the country’s total debt to £2,266 billion.

Andrew Hagger, head of communications at Moneynet.co.uk, said: “I’m sure many people in the real world would love to be in a position to pay down their debts. However, faced with a pay freeze or pay cut on one hand and soaring household expenses on the other, there is little disposable income available to pay for non-essential items.

“Others are building up their emergency fund savings as they are concerned for the safety of their jobs.

“The government has failed to keep inflation under control and should focus on keeping the cost of petrol, food and energy in check rather than expecting the public to magic extra money out of a hat.

“These are the toughest economic times people have faced in a decade – some are struggling to pay for the bare essentials, let alone paying off a little extra on their credit cards. It’s time for the government to wise up.”

Political opponents also accused the Prime Minister of insensitivity in the face of difficult problems for families.

Shadow Scottish Secretary Ann McKechin said: “Families don’t choose to go into debt, and they don’t need the Prime Minister preaching to them.

“Maybe on Planet Cameron everyone can reach into their pockets and pay off all their debts, but back in the real world families are struggling with rising bills, soaring energy prices and petrol going through the roof. Cheap words are easy for a man like Mr Cameron, but his policies actually make life harder for most people.

“Lecturing people on responsibility when he is slashing child benefit and increasing VAT is crass and will infuriate millions of Scots.”

However, Mr Cameron will insist that the Conservatives are tackling the crisis for the long-term benefit of the country. “You hear pessimism about our economic future, our social problems, our political system. That our best days are behind us. That we’re on a path of certain decline,” he will say.

“Well, I’m here to tell you that it isn’t true.”

He will also claim that the UK needed to rely on British values, in what aides said could also be taken as a reference to Mr Cameron’s staunch defence of the UK in the face of the SNP’s independence referendum.

He will say: “Some say to succeed in this world we need to become more like India or China or Brazil. I say we need to become more like us. The real us – hard-working, pioneering, independent, creative, adaptable, optimistic, can-do.

“That’s the spirit that has made this United Kingdom what it is – a small country that does great things – one of the incredible success stories in the history of the world.”

In a jibe at Labour and the unions, Mr Cameron will attack those who want to borrow and spend more while reducing the austerity measures brought in by the coalition.

He will say: “If we fool ourselves that we can grow our economy, mend our society, give our children the future we want them to have – if we fool ourselves that we can do these things without effort, without correcting past mistakes, without confronting vested interests and failed ideas then, no, we’re not going to get anywhere.”

He will tell the conference that the reason that the recovery was so slow was because this “was no normal recession”. He will say: “When you’re in a debt crisis, some of the normal things that governments do to deal with a normal recession, like borrowing to cut taxes or increase spending, won’t work, because they lead to more debt, which would make the crisis worse.”

Mr Cameron will call on everyone to take personal responsibility for dealing with the crisis. “The only way out of a debt crisis is to deal with your debts,” he will say. “That means households – all of us – paying off the credit card and store card bills.”

Banks would “have to get their books in order”, and governments all over the world would need to cut spending and live within their means.

He will also call on others to lead the UK out of the crisis, saying that his leadership role was about “unleashing your leadership”.

He will say: “Let’s reject pessimism. Let’s bring can-do optimism. Let’s summon the energy and the appetite to fight for a better future for our country – Great Britain.”

But last night Mr Cameron was told that he needs to look at the real world and what was happening to people across the UK.

The Citizens Advice spokesman said: “People get into debt for a whole number of complex reasons. Every individual case is different, and needs an individual solution.

“It would perhaps be better if the government concentrated more on helping people stay out of debt in the first place, or stopping small debts from snowballing into unmanageable ones.”