Hammond needs British families to go deeper into debt to meet his own targets – John McDonnell

Labour analysis reveals that Philip
Hammond is relying on British families to borrow hundreds of billions of pounds
extra by 2022. The Chancellor is also relying on households to go into deficit
by over £5 billion so he can meet his own growth targets.

Buried
in the detail of forecasts in last month’s Budget is the news that UK
households have moved from a total annual surplus of £85.7 billion in 2010 to a
£2.8 billion deficit this year (2017).  

And
borrowing is set to rise even further, hitting £5.5 billion by the end of the
Parliament (2022).

Furthermore,
according to the OBR UK households are set to borrow £445 billion by end of
this Parliament.

There
are worrying signs this could mean more people getting into financial trouble.
The Office for Budget Responsibility is forecasting household debt to income
ratios to reach 150 per cent in 2022. That is close to the levels just before
the financial crisis.

The
latest ONS figures published this month also reveal that the household saving
ratio has fallen to 5.5% – the lowest third quarter level since Q3 1971.
Furthermore, the debt-to-income ratio was at 138%. This is the
highest Q3 level in 5 years since Q3 2012.

John
McDonnell MP, Labour’s Shadow Chancellor, said:

“Rather
than set out a proper investment plan for our country, the Chancellor is
relying on millions of British families going further into debt to hit his own
targets.

“Philip Hammond should be
seeking to rebalance the economy away from an over-reliance on borrowing and
debt, and seriously tackle the cost of living crisis as wages fail to keep up
with prices.

“The
next Labour government will introduce a £10 per hour real living wage and build
a high wage, high skill economy for the many not the few.”