Freemasons Road, Canning Town

How debt keeps UK in a frightening state of denial

The first stage of grief is denial. For nearly 10 years since the banking crisis killed an idealised notion of prosperity for all, denial has been the dominant economic force in Britain. And that denial has taken a tangible, parasitic form – debt.

In London, the richest live cheek by jowl with the most over-indebted boroughs in the country. The trickle-down theory has been replaced with the keep-up hypothesis.

Newham and Tower Hamlets take the honours in the burden-of-debt premier league, according to a new survey by the Money Advice Service and data specialists CACI. One in four people in Newham – 60,000 people – have problems. Similar figures are available in Tower Hamlets, home to the shiny enclave of Canary Wharf, visible from every squat and low-rise.

Personal debt levels total more than £200billion across the country, levels not seen since before the financial crisis. The prudence that quickly followed the 2008 collapse was speedily replaced with an urgency to return to the prelapsarian status quo.

These debt figures show the devilish will of the money markets to irrigate a desert economy. From the emergence of payday lenders to the plasticity of credit cards, from house price bubbles to click-and-collect, money finds a way to prosper in the most barren of landscapes.

Freemasons Road, Canning Town

Freemasons Road, Canning Town

The Government outwardly deplores the trend but relies on you and me to keep on buying. Brexit holds the threat of a catastrophic contraction so the Exchequer needs the Citizen’s Army of unruly binge buyers to bridge the gap. Debt will be the economic shock absorber when it all comes to a shuddering halt.

The whole farrago plays out like some exquisitely mannered drama in which no-one dare speak the truth in case the deceit turns out to be the whole thing, not just a facet.

These are revolutionary times. Sovereign states are impotent in the face of corporations that operate a winner-takes-all monopolies that lay waste to the fundamentals of civic life, from high streets to pop art, from freedom of speech to the length of the working day, from the rule of law to the ridges and dips of indigenous culture.

Read more: Poor are in poverty because they have no money – duh

The outcome is a gig economy, crippling job insecurity, old school joblessness, all while a rip-roaring international elite find themselves homeless only because they have too many houses to make any one of them count.

And the hollowed-out economy continues this macabre romance of false promise based on one simple, artless illusion – debt – the Botox of inequality.

The whole thing brings to mind the reported exchange between car baron Henry Ford II and union boss Walter Reuther. The former was showing the latter around a new highly-automated factory.

Henry Ford II: Walter, how are you going to get those robots to pay your union dues
Walter Reuther: Henry, how are you going to get them to buy your cars?

Until we learn to differentiate true value from market value, it seems the whole circus will stumble from one uneasy accommodation to the next, with debt as the relentless crutch.

Giles BroadbentHow debt keeps UK in a frightening state of denial

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