VIEWS ON CONSUMER CREDIT: THE UK’S NOT SO JOINED-UP GOVERNMENT

David Cameron praised households for reducing debts, saying that was how to fight a debt crisis. Earlier drafts of the speech urged consumers to pay credit cards off to give the economy a lower-debt foundation for growth.

"I have set the Treasury to work on ways to inject money directly into small businesses," said George Osborne. Despite his best efforts, lending to companies fell this year, a situation the chancellor wants to reverse.

The monetary policy committee, chaired by Mervyn King, is worried that consumer spending is low. Interest rates are low to encourage borrowing and spending, in an effort to stimulate the economy through debt.

Rising consumer debt forms a key plank in the office for budget responsibility’s forecasts. Led by Robert Chote, the OBR believes growth will be supported by £566bn extra consumer borrowing between 2011 and 2015.