Sir, Your rather stern leading article this morning on the dangers of borrowing is all very well. But one needs to remember that it is largely consumer borrowing and spending which have kept the poor old British economy going for the past few years. Exports and industrial investment demand have been very weak, and without big consumption we would have been suffering the waste of underemployment of people and machines. That, indeed, is precisely why the Bank of England has kept interest rates down.
You may well be right in believing that there is no imminent danger of a sudden crash but, in the circumstances, it would surely be fair as well as sensible to do something to mitigate the effect on borrowers.
A “lifeboat” scheme of some sort ought not to be beyond the wit of the financial engineers. The details would need to be worked out carefully. For example, it might make sense for the Government to take over responsibility for some bad consumer debts (maybe suitably “shaved” to punish reckless lenders a bit).
The borrowers could then be made to repay over future years, at a low or zero rate of interest, through the income tax system. They could be banned from taking on further debt until their existing debt was repaid.
Yours faithfully,
MICHAEL CONNOCK,
Elm House, Bentley Heath,
Barnet, Hertfordshire EN5 4RZ.
August 1.
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From Mrs Madeleine Heaney
Sir, “Takes the waiting out of wanting” was the seductive slogan which launched one of the first credit cards.
No longer was it shameful to build up debt, it was smart.
No longer was patience a virtue, your desires could be gratified instantly. Now we are paying the price.
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Yours faithfully,
MADELEINE HEANEY,
Hall Close House,
Main Street, East Haddon,
Northamptonshire NN6 8BU.
August 1.
From Mr Rajnikant J. Mehta
Sir, My late father’s advice, given in 1955 when I got my first pay packet, is still valid. It was: “As soon as you get your pay packet, set aside 5 or 10 per cent as savings and a minimum of 5 per cent for the less fortunate; never spend more than 85 per cent; never borrow for luxuries — buy them only if you can afford them. Most important of all, have full faith in the Almighty.”
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He lived and died a truly happy man and, God willing, I hope to do the same.
Yours truly,
RAJNIKANT J. MEHTA,
18 Leigh Court, Byron Hill Road,
Harrow on the Hill HA2 0HZ.
August 1.