The SNP is warning that the UK is at risk of becoming too dependent on consumption paid for by soaring household debt.
Stewart Hosie, the party’s economics spokesman, warned of the effects of falling exports and factory output, as well as booming household debt.
Failing to Rebalance Economy
The stark predictions were made after data revealed that the level of household debt rose by over 40 per cent in the last half of 2015, whilst manufacturing output performed at its worst level for over two years.
Mr Hosie, more details of whom can be found on the UK Parliament website, claimed that Chancellor George Osborne is not keeping his promise to ensure that exports significantly contribute to growth as a means of rebalancing the economy and relieving the reliance on household consumption.
Boom in Household Debt
Aviva figures, meanwhile, show that average family debt in the UK has now reached a level of £13,520. This is an increase of £4,000 on figures seen in summer 2015, prompting experts to warn of more people needing to contact Carringtondean to discuss an IVA or individual voluntary arrangement, or seek advice from other debt management companies and find possible solutions to debt problems should interest rates rise or circumstances change.
Mr Hosie called on the House to recognise the way in which the economy was not being properly rebalanced in a climate where industrial output has fallen, exports look set to fall further, whilst household debt rises and dependency on household consumption remains and grows.
Mr Hosie criticised Mr Osborne for setting what he called an ‘unachievable’ target for exports, which the Chancellor had said could be doubled to reach a £1 trillion level by 2020. Instead, between 2013 and 2014, exports went down from £521 billion to £513 billion, prompting the Office for Budget Responsibility to say that the target was likely to fall short to the tune of £350 billion.
The SNP spokesman says innovation should be fostered to boost manufacturing; a sector which still makes up almost half (44 per cent) or all British exports. Mr Hosie says that this could be key in preventing the manufactured output decline seen in the last quarter from becoming ‘a pattern’.
He said that innovation was important as part of plans to create a bigger, faster growing and more productive manufacturing base overall.