Launch time：2009-10-30 9:52:59

 

Welcome to the Festival of Furniture

Welcome to the Festival of Furniture

Easy credit ruins individuals and damages the economy. We all accept that Christmas has become the feast of Mammon - the season of goodwill to all shopkeepers when normally prudent families worship the baby born in the manger by distributing tawdry gifts they have seen advertised on television.

We all accept that Christmas has become the feast of Mammon - the season of goodwill to all shopkeepers when normally prudent families worship the baby born in the manger by distributing tawdry gifts they have seen advertised on television. Now a new red letter day has appeared in the commercial calendar. Good Friday is the beginning of the festival of furniture.

Real worshippers at the shrine of "inspirational leather and fabric sofas" may argue that the celebration of settees, chairs and beds is a movable feast. For every week there are television commercials advertising specially reduced prices that are available only for the next few days. As one offer ends another, miraculously, begins. But this Easter we are witnessing what amounts to a furniture crusade.

Tabloid newspapers have joined forces with commercial television companies to advertise Harvey's Easter Collection, Courts' Easter Weekend, Multiyork's Easter Sale, Laura Ashley's Easter Weekend of Made to Measure Furniture and dfs, where "everything is half-price this Easter". Other companies are en fête but make no mention of the end of holy week. They all have one thing in common. They offer their potential customers extraordinary terms.

The dfs offer is typical. "Take four years' free credit and pay nothing for the first year." Unless dfs (a "licensed credit broker") loses money on the lending side of its business, someone is paying interest on the capital which finances the deals. So we must assume that another little explanation - alongside "subject to acceptance" - might have been added to the advertisement. It would read "debt charges included in the price". But the company can legitimately claim (in rather larger print): APR 0%.

So it is possible, today, to acquire a "corner group in navy blue leather, previous price ￡1,798" for ￡897, sit on it for a year without paying a penny and then dispose of the outstanding debt at the rate of ￡24.91 a month until April 2008. Say what you will about blue leather, the offer is clearly what, in the days of old-fashioned hire purchase, we called "easy terms". Indeed, the terms are a great deal too easy for the health of the economy.

Ever since the Tories bought the 1987 general election with an orgy of debt deregulation, Britain has borrowed far beyond its collective means. Low interest rates - part of the government's admirable and wholly successful campaign to secure full employment - removed the fiscal incentive to save first and buy later. The national psyche is represented by the trade union chant of 20 years ago: "What do we want? Everything! When do we want it? Now!" The SCS offer, "Be yourself for less", might be the motto of our time.

The idea of credit controls is so alien to government thinking that it took some time - admittedly on a Good Friday - and two immensely obliging information officers to determine whether we are allowed, under EU regulations, to return to the old system. Personal credit is the responsibility of the DTI, but its implications for fiscal policy (and what we used to call demand management) naturally remain within the Treasury. Both eventually agreed that ministers could, if they wanted to, reduce the amount of borrowing by setting out minimum deposits and maximum repayment periods. But this is the age of the individual. We all have an inalienable right to ruin ourselves and damage the economy.

The furniture trade is only the padded end of the credit wedge. Its success is very largely dependent on the existence of various forms of lending - bank loans, credit cards and the several conveniences which enable reckless buyers to pay their ￡24.91 a month to dfs and still discharge all the other careless liabilities which they have taken on. It may well be that were such credit outlets to be restricted, the economy would collapse like a punctured balloon. But payments as easy as those offered by dfs make me uneasy.

My objection to credit has nothing to do with personal morality. I left university with an unauthorised overdraft and immediately made hire purchase agreements to buy the first furniture I ever owned. I was sometimes late with the payments. And, when I bought a car, I borrowed the deposit from a more affluent friend. Sometimes I speculate about what would have happened in the early swinging 60s if cheap and easy loans had been as freely available as they are today.

Television advertisements provide a clue to the answer. A new industry has sprung up within the financial services sector. The companies which make it up "refinance" debt - sometimes by taking the debtor's house as security. They advertise their wares on late-night television. Satisfied customers sing the system's praises. They were, they say, oppressed by their liabilities until they discovered the advantages of borrowing one big loan. Casualties of the system never appear.

Next： Eco Friendly...    Previous：Buying Furni...