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Last Updated: Thursday, 6 December 2007, 15:51 GMT
Capital debt
Jerry Thomas
The Politics Show London

Credit cards
Debt building up on credit cards?

Over the coming two weeks, ahead of Christmas, spending in the shops is likely to create enormous levels of debt. Just what does that mean for London and what does that mean for you?

In 1855, Charles Dickens wrote what many believe was his greatest novel - "Little Dorritt" which looked at the problem of debt in the 19th Century.

Dickens highlighted the terrible plight of those incarcerated in the debtors Marshalsea prison in Southwark, where the downward spiral of debt left the poor ineradicably dislocated and cut adrift from the rest of Victorian London society.

Well, 150 years on, and a light year away from a Victorian era recollected mainly in television dramatisations and kitsch tourist attractions, the scenery has changed but the story is still depressingly familiar.

Buoyant economy?

The sustained years of economic growth enjoyed by the country have been much trumpeted by the Labour government.

An administration, which has let no opportunity slip in referring back to what it claims were the bad old days of "boom and bust" under John Major and Norman Lamont.

But despite the years of economic growth and prosperity it comes as something of a surprise that many Londoners are currently in serious debt.

Credit cards, cash and Piggy bank
Back to credit 'boom and bust'?

Young 'in debt'

The think tank "Reform", argues that young people have a particular problem with debt, maintaining that other countries around the world are responding to the problem... but the Treasury has been inactive.

They insist that since young people are less likely to vote, politicians are not particularly interested in the problem.

They also maintain that young people are most likely to use credit cards to pay off existing debts.

A major contributing factor is the downturn in the housing market with some dire warnings that the slowdown presages a recession in 2008.

Homelessness awaits

A survey published next week, on levels of insecurity in the housing market, will show that many people in London are struggling to such a degree with mortgage repayments that they are only one defaulted payment away from homelessness.

The council housing safety net which has traditionally been there to pick them up, is already strained to breaking point.

So, with the housing market on a knife edge, and 60% of net credit card lending for the year being in December, the issue with Londoners' debts and how to address the problem is very much at the top of the current agenda.

Over the edge

A problem exacerbated by a recent poll which showed that 65% of Londoners believe they are not responsible for their own indebtedness.

Has London borrowed more than it can pay back?

Might the Christmas blitz push us over the edge?

Or is debt, properly managed, not actually of benefit to London?

Andy Love, Labour MP for Edmonton joins us in the studio to explore the surrounding issues.

The Politics Show London

The Politics Show for London, with Jon Sopel and Tim Donovan on Sunday 09 December at 12:00 GMT on BBC One.

This is the last programme of the autumn run - we return on Sunday 13 January 2008 - so may we all wish you a very Happy Christmas and Peaceful New Year.

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