Credit Management magazine October 2017

VIEW FROM THE SEA FRONT
The d word
David Andrews examines the UK’s growing debt
burden with a wry look at how it all started.
Dfor Debt, with a capital D
for emphasis. As if those
swamped by debt – and
there are clearly many –
need any further underlining
of their plight.
Wherever you look, it’s everywhere.
Ubiquitous. Contemporary Western society
has been built on the foundations of debt.
From the days of the promise of a sheep
or a goat in exchange for a spot of land,
advancing through to the monetarisation
of modern societies, debt has by turns
haunted and plagued those who are mired
in it.
As debt has evolved, and a necessary
demarcation between consumer and
corporate or government debt emerged,
the term ‘consumer debt’ – a euphemism
for the medium through which so many
of us regulate our finances from month to
month – is rarely far from media headlines.
I recall making the journey up the A1
from London to Stamford – home to CM
magazine – in my battered Alfa Romeo in
the spring of 1988. A young man, headed
north for some trial shifts on a magazine
which I knew little or nothing about. My
editor in those far off days was Richard
Smith. Clever, witty, a 30-a-day hack of the
old school. And a man who knew a thing or
two about debt.
Coming as I did from an arts
background, mostly writing about new
movie releases, books, theatre and the
like, my only real knowledge of debt was
the ever-increasing burden of my monthly
credit card statements. Plus, the fact that
my mortgage, which started out at seven
percent in 1986, had leaped to just shy of 14
percent by 1988.
In common with millions of
homeowners at the time, I was caught up
in the shocking leap in Bank of England
base rates, which spiralled ever upwards at
a giddying pace.
Many people were effectively ruined
by this calamitous rise, keys to no longer
affordable properties were regularly
posted back to the banks and building
societies that had agreed the mortgages.
Hundreds of thousands of properties were
repossessed. It was a very difficult time.
“The first thing you should know
David,” said Richard, ushering me to a desk
in the corner of a tiny, smoke-filled office
and deftly switching on the monitor of a
vintage Amstrad computer, “is that we are
all screwed.
“Fine if you’re the Queen or whoever, but
if you are Joe Schmoe with a big mortgage,
then you’re going to be in deep crap.
Who can afford a doubling of their home
repayments every month,” he reasoned.
And he was right of course.
The ghosts of the now long-gone Richard
Smith, who battled his own demons from
that tiny newsroom, with its tranquil views
through a haze of Golden Virginia tobacco
The Recognised Standard / www.cicm.com / October 2017 / PAGE 18