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You can find the current article at its original source at https://www.theguardian.com/money/2017/nov/08/mps-inquiry-household-finances-debt-treasury-select-committee-nicky-morgan
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| MPs launch inquiry into household finances as £200bn debt pile looms | MPs launch inquiry into household finances as £200bn debt pile looms |
| (about 1 month later) | |
| MPs have launched a formal inquiry into household finances, as personal debt hits levels unseen since the financial crisis. | MPs have launched a formal inquiry into household finances, as personal debt hits levels unseen since the financial crisis. |
| The Treasury select committee will examine the debt levels of UK households as well as whether consumers are saving adequately as Britain leaves the European Union. Problem debt and the treatment of low income families by banks will also form part of the inquiry. | The Treasury select committee will examine the debt levels of UK households as well as whether consumers are saving adequately as Britain leaves the European Union. Problem debt and the treatment of low income families by banks will also form part of the inquiry. |
| The investigation comes amid growing concerns over borrowing levels, with the amount of debt amassed on credit cards, personal loans and car deals now at the same level it reached before the 2008 financial crisis –more than £200bn. There are also fears the recent Bank of England rate hike could have a damaging impact. | The investigation comes amid growing concerns over borrowing levels, with the amount of debt amassed on credit cards, personal loans and car deals now at the same level it reached before the 2008 financial crisis –more than £200bn. There are also fears the recent Bank of England rate hike could have a damaging impact. |
| Threadneedle Street increased the cost of borrowing from 0.25% to 0.5% last week, reversing the emergency rate cut following the referendum undertaken to avert a recession. While the economy has avoided a slump since the vote, households have taken on more debt to cope with the rising cost of living sparked by the result. | Threadneedle Street increased the cost of borrowing from 0.25% to 0.5% last week, reversing the emergency rate cut following the referendum undertaken to avert a recession. While the economy has avoided a slump since the vote, households have taken on more debt to cope with the rising cost of living sparked by the result. |
| Households are expected to face about £1.8bn in additional interest payments on variable rate mortgages in the first year after the rate hike, according to experts. Interest payments on credit cards, personal loans, car finance and overdrafts are expected to be as much as £465m more expensive for the nation as a whole. | Households are expected to face about £1.8bn in additional interest payments on variable rate mortgages in the first year after the rate hike, according to experts. Interest payments on credit cards, personal loans, car finance and overdrafts are expected to be as much as £465m more expensive for the nation as a whole. |
| The investigation will come as a significant intervention by the new Treasury select committee chair, Nicky Morgan, who was one of the leading remain campaigners among Conservative MPs ahead of the Brexit vote. The former education secretary has also opened an inquiry into the preparedness for a no-deal Brexit and the nature of the country’s future trading relationship with the EU. | The investigation will come as a significant intervention by the new Treasury select committee chair, Nicky Morgan, who was one of the leading remain campaigners among Conservative MPs ahead of the Brexit vote. The former education secretary has also opened an inquiry into the preparedness for a no-deal Brexit and the nature of the country’s future trading relationship with the EU. |
| Morgan said: “Debt is a huge emotional burden for people. Unstable personal finances often emerge as problems raised by constituents, so we hope to take evidence for this inquiry from around the country. | Morgan said: “Debt is a huge emotional burden for people. Unstable personal finances often emerge as problems raised by constituents, so we hope to take evidence for this inquiry from around the country. |
| “We will examine what policies could support households in achieving appropriate levels of saving, and the sustainability of the UK’s household debt and consumer credit.” | “We will examine what policies could support households in achieving appropriate levels of saving, and the sustainability of the UK’s household debt and consumer credit.” |
| However, calls for a full-scale public inquiry into rising levels of personal indebtedness have not met with success so far. The chairs of the business and work and pensions select committees, Labour MPs Rachel Reeves and Frank Field, urged the government to set up an independent investigation into household debt. | However, calls for a full-scale public inquiry into rising levels of personal indebtedness have not met with success so far. The chairs of the business and work and pensions select committees, Labour MPs Rachel Reeves and Frank Field, urged the government to set up an independent investigation into household debt. |
| According to the Money Advice Service, there are now 8.3 million people in the UK with problem debts. Government figures published last month also showed applications for individual voluntary arrangements – a means of managing personal debt – reached their highest level since they were introduced in 1987. | According to the Money Advice Service, there are now 8.3 million people in the UK with problem debts. Government figures published last month also showed applications for individual voluntary arrangements – a means of managing personal debt – reached their highest level since they were introduced in 1987. |
| The inquiry comes amid falling real wages for workers in Britain, despite the lowest levels of unemployment in the UK since the mid-1970s. That could be behind a fall in the household savings ratio, which attempts to measure how much money individuals are putting away for retirement or a rainy day out of their disposable income, to the lowest levels since the mid-1960s. | The inquiry comes amid falling real wages for workers in Britain, despite the lowest levels of unemployment in the UK since the mid-1970s. That could be behind a fall in the household savings ratio, which attempts to measure how much money individuals are putting away for retirement or a rainy day out of their disposable income, to the lowest levels since the mid-1960s. |
| MPs will begin taking evidence next week, including from a former adviser to David Cameron on the economy, Michael Johnson, who is now a research fellow at the Centre for Policy Studies, a thinktank founded by Margaret Thatcher. The inquiry will also hear from Torsten Bell, a former senior aide to Ed Miliband, who is now director of the Resolution Foundation thinktank, as well as Ashwin Kumar, chief economist at the Joseph Rowntree Foundation. | MPs will begin taking evidence next week, including from a former adviser to David Cameron on the economy, Michael Johnson, who is now a research fellow at the Centre for Policy Studies, a thinktank founded by Margaret Thatcher. The inquiry will also hear from Torsten Bell, a former senior aide to Ed Miliband, who is now director of the Resolution Foundation thinktank, as well as Ashwin Kumar, chief economist at the Joseph Rowntree Foundation. |
| The inquiry will also look at the growing intergenerational divide, as well as other issues such as lifetime financial planning. Millennials are facing worse living standards than their parents, amid weak wage growth and rising rental costs and difficulty getting on to the housing ladder. | The inquiry will also look at the growing intergenerational divide, as well as other issues such as lifetime financial planning. Millennials are facing worse living standards than their parents, amid weak wage growth and rising rental costs and difficulty getting on to the housing ladder. |
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