Sure, we all like the occasional propaganda statistic around here, I’ve even created a few myself – yet we should still look at these numbers, like the TUC’s calculation of household unsecured debt, to see how that propaganda is being constructed. Where’s the lie that is.
So, The Trades Union Congress tells us all that household unsecured debt is entirely out of control. It’s worse than before the crash, Armageddon approaches.[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Britain’s household debt mountain has reached a new peak, with UK homes now owing an average of £15,385 to credit card firms, banks and other lenders, according to the TUC. The trade union body said household debt rose sharply in 2018 as years of austerity and wage stagnation forced households to increase their borrowing. The TUC said in its annual report on the nation’s finances that the amounts owed by British households rose to a combined £428bn in the third quarter of 2018. Each household owed £886 more than it did 12 months previously, it said. The figures do not include outstanding mortgage debts but do include student loans. [/perfectpullquote]
Ah, student loans? Really?
Yes, really. They’re firstly telling us that student loans are unsecured. That’s not really true, they’re secured against future income. Government can and does do that. But OK, we know we’re watching propaganda being constructed here. So, to the TUC themselves:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Total unsecured debt has risen to £428 billion.[/perfectpullquote]
OK, that’s the stock of debt. The change?[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Moreover, much of the rise in unsecured debt over the year is down to student loans. Of a total rise of £27 billion on the year, the stock of student debt rose £17bn (source) and Bank of England consumer credit figures by £11bn.[/perfectpullquote]
Student debt, as a stock, is obviously going to be rising. As more age cohorts move through the system as a pig through a python then the stock out outstanding debt will be rising. Don’t forget that those of us who went to university 30 years ago have no such debt. Sure, argue that student loans is a good idea or a bad one but that the stock of debt rises as the system beds in over the age groups is hardly surprising now, is it?
Which leaves that £11 billion rise on our £428 billion stock. That’s a rise of 2.6%.
Our rise in unsecured household debt is looking how dangerous now?
We’ve that step change in outstanding student loans as the system beds in, after that unsecured household debt has risen by something a tad above one inflation measure, a tad below another. And that’s how the TUC constructs propaganda from numbers. It’s a fun game, isn’t it?