300 new insolvencies every day - Cable

7.22.00am BST (GMT +0100) Fri 3rd Aug 2007

Commenting on today's Insolvency Service figures, showing a rise of 4.2% on the corresponding quarter of the previous year, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "This increase in personal insolvencies demonstrates the severity of Britain's personal debt crisis.

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

"Many insolvency practitioners acknowledge the predicament that young families find themselves in.

"Many people are reluctant to go into personal bankruptcy, because they wish to maintain a reputation for honouring their debts. They then find themselves in extremely expensive voluntary agreements, which pile up further problems for the future.

"There must be tighter regulation of the marketing and promotion of debt solutions companies."

Figures released today also show that, over the last year, the number of mortgage possession claims have rise by nearly 6,000, while the number of mortgage possession orders have increased by almost 8,000. In addition, new figures published by the Council of Mortgage Lenders today show the number of mortgages in arrears rose by 4% since December.

Commenting further, Dr Cable said:

"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."