Tories bid to tackle personal debt

The Conservatives have launched a campaign to clamp down on spiralling personal debt and help people handle their personal finances.

Shadow chancellor George Osborne has outlined new plans to tackle personal debt, financial illiteracy and financial exclusion.

It comes as part of the party's bid to promote social responsibility and develop greater corporate and individual responsibility.

Osborne outlined the plans in a speech to the 'Conservative debt summit' in London.

The shadow chancellor said the new policies would strike a balance between the freedom to manage your money as you like and the need to put a check on debt.

The plans include a cooling-off period on store cards, with customers being made to wait for seven days before using them.

Other proposals would see teenagers being given compulsory lessons at school on financial management to make them better able to handle their finances when they enter adult life.

The Tories are concerned that a consumer economy built on personal debt will not prove sustainable in the long term, Osborne said.

"The government has a responsibility to provide the legal framework, business has a responsibility to do the right thing and
the individual has a responsibility not to get themselves into trouble," he added.

He also called for new restrictions on individual voluntary agreements, a legal contract between lenders and borrowers to pay off a reduced amount of a debt, which can leave the consumer with a poor credit rating.

And he said he wanted to see clearer explanations on credit card statements to illustrate the cost of the debt that customers are running up.

On ITV's Sunday Edition, Osborne spoke about the extent of the problem, pointing out that personal debt is rising by about a million pounds every four minutes.

"Personal insolvencies are at a record level," he said.

And he said the party was working with other groups and bodies tackle the issue.

"We are working with the credit card industry, with organisations like the Citizens Advice Bureau.

"We're bringing everyone together to try and come up with some common policies and a common approach next week," said Osborne.