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Cable says Govt to blame for borrowers saddled with debt

Liberal Democrat Treasury spokesman Vincent Cable is calling for the Government to push for more responsible lending from providers to prevent borrowers being saddled with unsustainable debts.

Cable told the LibDem conference in Bournemouth this week that he blames the Government for failing to prevent lenders offering big mortgages to borrowers who may not have a sufficient understanding of the impact of interest rate rises or a fall in house prices.

The LibDems want banks and building societies to donate 0.1 per cent of their profits to the Citizens Advice Bureau, which Cable says would generate around £27m towards the provision of generic financial advice thr-ough the CAB.

Cable wants to see bank and society chief executives, shareholders and senior managers put some of their profits back into the community. He believes Chancellor Gordon Brown is taking serious risks by relying solely on interest rates to achieve a soft lan-ding for house pri-ces. He accused Brown of creating a new economic world in seven days and spending the last seven years admiring his creation.

Cable said: “Thousands of people are trapped in unsustainable debt and 85 per cent of this is directly linked to house price inflation. The bubble in the market will not necessarily burst but we could face problems of negative equ-ity if it does and where are the safety nets for borrowers?”

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