Insolvency figures show severity of debt crisis - Cable

12.00.00am BST (GMT +0100) Tue 8th May 2007

Commenting on figures from the Government's Insolvency Service showing that a record number of people went insolvent during the first three months of 2007, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "This increase in personal insolvencies to a staggering quarterly record, alongside the equally dramatic rise in home repossession claims, demonstrates the severity of Britain's personal debt crisis.

"These figures equate to more than 300 people being declared insolvent every day - a truly astonishing number. But these are not freak figures. Sadly, they are likely to get even worse, especially with families feeling a further pinch on their budgets when interest rates almost certainly rise next week.

"The Liberal Democrats have warned the Chancellor for years about the seriousness of the personal debt problem and the need for a concerted plan of action involving better financial advice and education, debt data pooling and action on irresponsible lending."

Commenting on the 8% annual rise in mortgage possession claims issued and the 17% annual rise on mortgage possession orders made, he added:

"These figures demonstrate the complete absence of an adequate safety net in the mortgage market. There is currently a considerable degree of irresponsible lending and aggressive marketing to individuals.

"Banks and building societies need to ensure that when people take out mortgages they are fully aware of the risks, and that quality insurance products are available.

"The Government should be actively working with the financial services industry to achieve a national roll-out of independent advice centres, providing people with early access to financial health checks before they get into a crisis situation."