Philip Hammond tells borrowers to share economic blame
- 4 May 2012
- From the section UK
People who overborrowed during the economic boom must take responsibility for their part in the financial crisis, the defence secretary has said.
Philip Hammond said consumers and home-owners who took out loans, spent on credit cards and accepted large mortgages were "consenting adults".
His comments came after Bank of England boss Sir Mervyn King admitted he should have flagged up the looming crisis.
Mr Hammond, who helped formulate David Cameron's economic strategy in opposition, told the newspaper lifestyle expectations had "run away with us".
"We started living a lifestyle both in private consumption and in public consumption that we could not afford," he told the newspaper.
"We borrowed to top it up... now the day of reckoning has come and we are adjusting. Households were spending more than they earned. That's why household debt rose."
At the annual Today Programme Lecture on Wednesday, Bank of England Governor Sir Mervyn King said he should have "shouted from the rooftops" that a system had been built in which "banks were too important to fail".
But Mr Hammond said: "People say to me, 'It was the banks'. I say, 'hang on, the banks had to lend to someone'.
"People feel in a sense that someone else is responsible for the decisions they made. Of course, if banks don't offer credit, people can't take it.
"But there were two consenting adults in all these transactions, a borrower and a lender, and they may both have made wrong calls.
"Some people are unwilling to accept responsibility for the consequences of their own choices."