Crackdown On Irresponsible Lenders Say Lib Dems

The Liberal Democrat Treasury spokesman, Vince Cable, will push for a crackdown on irresponsible lenders this week as he launches a plan to tackle consumers' trillion-pound debt mountain.

Whilst Gordon Brown puts the finishing touches to his Budget, Cable will confront him to challenge the powerful banking sector or risk jeopardising economic stability.

'The government must improve banking regulation so that debt levels do not spiral out of control and consumers are clear on how much they have borrowed,' Cable said. 'Much of this problem has been caused by the government's complacency.'

The trillion pounds' worth of debt that consumers have generated through mortgages and credit cards are worth as much as an entire year's gross domestic product (GDP).

If lending is not brought under control, The Lib Dems believe that further rises in interest rates, or an external shock such as a further oil price spike, could result in a sharp slowdown as nervous borrowers opt to pay down some of their debts. With his 'action plan' being launched on Wednesday, Cable will also call for better financial education.

Barclays also fell victim to Cable’s onslaught as he accused them of failing to deliver value for money last week. With Barclays announcing record profits of £4.6 billion, Cable pointed out that their 'reward savers' accounts pays an interest rate 1.5 per cent lower than the Bank of England base rate. He urged the Office of Fair Trading to take a tougher approach to regulating banks.