07/01/2019
The Trades Union Congress (TUC) has undertaken research into consumer debt, identifying that unsecured borrowing has reached record levels.
It may not be surprising that debt levels have increased, after all inflation is an influencing factor. However, the increase when expressed as a percentage of income shows a far more worrying trend. In the period from 1997 to 2008 (the Blair Years), unsecured borrowing as a percentage of income rose steadily, year on year. 2009 saw a 1.4% reduction and 2010 a more modest 0.1% reduction. The next few years saw further reductions, before the rise started again.
In 2018, the level breached the 30% mark for the first time.
Whilst the data presented by the TUC did not split the debt down into socio economic groups or income bands, it is reasonable to presume that these debts will be disproportionately affecting those families with lower incomes.
What all these data sets show, is that the continuing rise in consumer debt is not an issue driven by one political party. It is, it seems, an underlying issue of society.
The TUC have declared that working families are, on average, worse off now than they were before the financial crisis and that millions of households are reliant on borrowing to get by.
TUC General Secretary Frances O’Grady said: “Household debt is at crisis level. Years of austerity and wage stagnation has pushed millions of families deep into the red. The government is skating on thin ice by relying on household debt to drive growth. A strong economy needs people spending wages, not credit cards and loans. Our economy is not working for workers. They need stronger rights and bargaining powers. Trade unions should be allowed the freedom to enter every workplace to negotiate higher wages.”
The TUC have suggested this shows a need to accelerate the increase in the basic wage to £10 per hour. They have also blamed the government for prioritising corporate tax cuts over public sector pay. This shows the blinkered approach of the trade union movement in continually pointing the finger at the same targets.
The corporate tax cuts have been shown to encourage business growth, which in turn leads to increased tax receipts and increased employment. The argument against such tax cuts therefore appears misguided.
In my opinion, and after all that is what this website is all about, the unions are self serving and manipulative.
The General Secretary of the TUC, Ms O’Grady, apparently has a basic salary of £111,982, but luxury corporate and benefits packages takes her total remuneration to £175,000 per annum. Her 2018 pay rise of £5,000 was well in excess of what the average worker could expect.
She is not alone. Research shows that at least 45 public sector trade union bosses receive more than £100,000 each year in salary and benefits. This places them in the category of ‘wealthy’ as defined by Labour’s Shadow Chancellor, John McDonnell.
Public sector trade unions are subsidised by the public purse. Therefore, it is taxpayers who are paying for the very high salaries which fund the lavish lifestyles of many trade union bosses. Many trade union bosses are quick to condemn the chief executives of banks and businesses over their huge pay packets. It is difficult to see how it is not at least slightly hypocritical for trade union bosses to criticise ‘corporate greed’, when they themselves are earning so much more than the average worker; those very people who they claim to represent.
Comparing a graph showing the annual growth in salaries over the same period (as far as possible) would suggest that increased wage growth does nothing to alleviate the level of indebtedness of UK households.
So, much as I am grateful for the research completed by the TUC, I believe they are completely wrong in their assertions as to the reasons behind the increase in unsecured borrowing and the solution.
It would be nice to see the Financial Conduct Authority look at this data and consider what steps could be taken to reduce the continued growth in indebtedness.
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