It's easy to feel just a tad smug & judgemental when you're a comfortably-off Tory councillor. At a time when the recession is gathering a fearsome head of steam & the rate of personal bankruptcies has risen seemingly exponentially (http://www.guardian.co.uk/business/2009/feb/06/bankruptcy-ivas-insolvencies ), along comes a London Tory councillor by the name of Harry Phibbs with a piece on the Guardian Comment is Free site (http://www.guardian.co.uk/commentisfree/2009/feb/06/bankruptcy-iva-insolvency-recession ):
"Avoiding bankruptcy where possible should be regarded as a moral issue as well as a financial one. We talk of people being 'forced into bankruptcy' but sometimes this is not really the case. Sometimes it is a choice."
At face value, there isn't much to quibble with in that passage; going bust is never a desirable state of affairs & the increasing number of people deciding to declare themselves bankrupt rather than agree to IVAs (Individual Voluntary Agreements) will have cause to rue that decision.
However, it's a bit rich (pardon the pun) for a fairly prominent Tory to pontificate on the matter when credit controls were relaxed to the point of irresponsibility by the Thatcher government. Much has been made, & rightly so, about the explosion of cheap credit over the last decade or so. Predictably, the Tories have attempted to pin this on Blair & Brown & declare it to be yet another indictment of the New Labour years. Not so fast, folks. Cheap, accessible credit was made available, & damagingly so, to many low-paid workers as far back as the late 80s. Most of the applicants for credit, then as now, were not au fait with every aspect of loans & interest.
Instead, they were coccooned in a state of ignorance about what they signed up for; don't worry about paying it back, they were told, that can be sorted out later, you've earned that new car/foreign holiday/fancy winter coat.
Anybody familiar with the history of the Thatcher & Major years should be aware of that policy decision. However, Phibbs isn't. He expounds:
"Risk-taking is synonymous with the capitalist dynamic. I understand the point that limited liabilities for companies keeps the show on the road. With all the discouragement to risk-taking it evens up the equation. As it is, we are not exactly overrun with thrusting go-getters starting new businesses at the moment. But a moral, responsible capitalism has clear rules, for both individuals and companies, about just who is taking the risk. It should be with your own money, not someone else's."
Alas, there seems to be no space in Phibbs' sermon on fiscal sobriety for mention of the bankers on both sides of the Atlantic who continue to live the high life while taking taxpayers' money & refusing to reopen credit lines.
Postscript: I responded to Phibbs' post, briefly setting out my criticisms of his points. I also drew attention to his time as a leading light in the Federation of Conservative Students during the 80s. This body proved to be too embarrassing even for the likes of Norman Tebbitt (no mean feat) with many of their pronouncements & conference decisions. I mistakenly gave the impression that Phibbs himself had said back then that Nelson Mandela should be hanged. I was wrong. He certainly didn't say that. Phibbs was quick to respond to my post & indicate his readiness to call in the lawyers. Upon re-reading my post, I realised it had been clumsily written & was, indeed, inaccurate. However, the fact remains that during Phibbs' time in the FCS its members were fond of wearing t-shirts & displaying posters which called for Mandela to be hanged for being a "terrorist"; I'm indebted to one of the other CiF posters for supplying the following link to substantiate this: