TUC warns of “debt timebomb” with households facing a £1,400 rise in credit card and loan debt in 2024
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Britain “cannot afford the Tories” - TUC General Secretary to warn in New Year Message
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Paul Nowak calls for early general election to “end years of national decline”
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***PAUL NOWAK AVAILABLE FOR INTERVIEW***
The TUC has today (Friday) warned that families are facing a “debt timebomb”.
The warning comes as new analysis from the union body reveals that unsecured debt (loans credit cards, purchase hire agreements) is set to increase by £1,400 in real terms next year, on average, per household.
The analysis of official statistics shows that in 2024 household unsecured debt is forecast to rise by 11%.
And over the course of the next parliament unsecured debt is set to rocket by £6,000 (+43%), on average, per family.
The union body warned that unsecured debt per UK household is on course to reach a record level of £17,200 by 2026 – exceeding the previous high of £16,800 set in 2007.
By 2028 unsecured debt per household is set to top £19,000.
Unsecured debt includes credit cards, loans and purchase hire agreements, and excludes mortgages. The TUC excluded student loans from the analysis.
Families left exposed
The TUC says working people have been left brutally exposed to rising costs after years of pay stagnation.
UK workers are on course for two decades of lost living standards with real wages not forecast to recover to their 2008 level until 2028.
The TUC estimates that the average worker would now be £14,800 better off if their pay had kept up with pre-crisis real wage growth trends since 2008.
The union body says the sharp spike in debt, along with stagnant living standards, will “more than wipe out” any gains from the Chancellor’s cut to national insurance tax and leave many families “under the cosh”.
The Office for Budget Responsibility says the period between 2021 and 2024 will be the worst for living standards (real household disposable income per person) since records began in 1955.
New Year’s Message
TUC General Secretary Paul Nowak will warn that Britain “cannot afford the Tories” in his annual New Year Message today.
Calling for an early general election, Nowak will say:
“Every month the Tories stay in office the more families will be pushed into debt.
“This party of out-of-touch millionaires is more focussed on clinging to power than on growing our economy and getting living standards rising again.
“If something doesn’t change, real wages won’t recover to their 2008 levels until 2028.
“These 13 years of economic stagnation have left working people brutally exposed to the cost of living crisis.
“We cannot afford a Tory government for one day longer.”
Highlighting the choice on offer at the next election, Nowak will say:
“After years of national decline, Labour’s New Deal for Working People would be a gamechanger. It would be the biggest expansion of workplace rights in a generation.
“No more zero-hours contracts and no more fire and rehire. Employment rights from day one. Union rights to access the workplace. New fair pay agreements. Repealing the attacks on the right to strike.
“And more than that, the prospect of a new era of a grown-up, constructive approach to industrial relations, where disputes are solved through negotiation.
“And a clear commitment to put unions and employers at the heart of a modern-day industrial strategy.”
Highlighting the TUC’s ongoing campaign against the government’s new anti-strike laws, Nowak will say:
“Nobody withdraws their labour lightly. It is the last resort when employers refuse to talk and refuse to compromise.
“The action taken by union members [in 2023] forced bosses across the country back to the negotiating table and secured better deals.
“Unions will do everything in our power to defend that right to strike. It is a cornerstone of our democracy.
“We won’t be intimidated by this government, and we won’t be bullied.
“The Tories’ Strikes Act is toxic, unworkable, undemocratic and likely illegal. And it’s a brazen attempt to try stop working people winning better pay and conditions.
“The entire trade union movement will rally behind any worker who is sacked for exercising their right to strike.”
ENDS
Real unsecured debt per household
|
Real unsecured debt per household (£ exc. student loans) |
Growth in £ |
Growth in % |
|
|
2023 |
13,361 |
583 |
5 |
|
2024 |
14,792 |
1,431 |
11 |
|
2025 |
16,040 |
1,248 |
8 |
|
2026 |
17,179 |
1,139 |
7 |
|
2027 |
18,204 |
1,025 |
6 |
|
2028 |
19,117 |
913 |
5 |
Methodology: Unsecured debt is any debt that isn’t backed by property. This includes credit cards, loans and purchase hire agreements and excludes mortgages. For the purpose of this analysis we have also excluded student loans.
Unsecured debt is calculated by subtracting secured liabilities from total loans and then removing student loans. The data are adjusted for inflation using CPI, and is in 2023 prices. ONS data are used for outturn years, from 2023 Office for Budget Responsibility (OBR) forecasts are used from the November 2023 Economic and Fiscal Outlook.
The TUC uses the OBR forecasts for total unsecured liabilities to project total loans. The OBR do not forecast the latter, but loans make up the vast majority of household liabilities (over 90%) and the two therefore tend to growth at very similar rates. Household numbers are taken from the ONS Families and Households data, with pre-1996 and post-2022 numbers projected using the nearest five-year trends.
Figures on real household disposable income per person are taken from the OBR November 2023 release.
Figures on where wages would be if they had grown at the pre-2008 rate are based on TUC analysis of the latest ONS regular average weekly earnings data, published in December 2023 and covering October 2023. Wages are adjusted for inflation using CPI and October 2023 prices.
Paul Nowak’s full New Year Message:
2023 has been momentous for the trade union movement.
Across the economy workers took the difficult decision to go on strike – to get a decent pay rise, to pay the bills and to defend the services they provide.
I want to pay tribute to every one of them, be they paramedics, physios, teachers, railway staff, civil servants, factory workers or bus drivers.
Nobody withdraws their labour lightly. It is the last resort when employers refuse to talk and refuse to compromise.
The action taken by union members forced bosses across the country back to the negotiating table and secured better deals.
Unions will do everything in our power to defend that right to strike. It is a cornerstone of our democracy.
We won’t be intimidated by this government, and we won’t be bullied.
The Tories’ Strikes Act is toxic, unworkable, undemocratic and likely illegal. And it’s a brazen attempt to try stop working people winning better pay and conditions.
The entire trade union movement will rally behind any worker who is sacked for exercising their right to strike.
~
2024 will be a pivotal year for working people.
Do we continue with the Conservatives’ failed economic model that has unleashed rampant inequality and pushed working people to breaking point?
Do we allow waiting lists to continue to soar and kids to be taught in crumbling classrooms?
Do we sit by while rights at work – including the right to strike – are attacked?
Or do we come together to secure political change?
The Tories have broken Britain. We cannot afford a Tory government for one day longer.
This party of out-of-touch millionaires is more focussed on clinging to power than on growing our economy and getting living standards rising again.
If something doesn’t change, real wages won’t recover to their 2008 levels until 2028.
These 13 years of economic stagnation have left working people brutally exposed to the cost of living crisis. Every month the Tories stay in office the more families will be pushed into debt.
~
We can’t go on like this.
After years of national decline, Labour’s New Deal for Working People would be a gamechanger. It would be the biggest expansion of workplace rights in a generation.
No more zero-hours contracts and no more fire and rehire. Employment rights from day one. Union rights to access the workplace. New fair pay agreements. Repealing the attacks on the right to strike.
And more than that, the prospect of a new era of a grown-up, constructive approach to industrial relations, where disputes are solved through negotiation.
And a clear commitment to put unions and employers at the heart of a modern-day industrial strategy.
We need a government that will create decent jobs across the country.
We need a government that will repair our public services and revive our manufacturing heartlands.
We need a government that will put country before party.
That will be the choice at the next election. I know where I stand – and I hope all working people will join me in making 2024 the year we vote for change.
I wish you, your families and workmates good health, happiness and security in 2024 and always.
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