Why doesn't Gordon admit the mess the economy is in due to private banking and credit, and use the leverage of a publicly owned Northern Rock to shake some profit and turnover out of private into public funds. How?
Offer- Northern Rock deposits guaranteed but no others.
Nothern Rock mortgagees fixed rates of mortgage at 4-5%
for the duration of the loan, or a choice to swap their private homes to the public sector.
Nothern Rock credit cards at 0% for 24 months with no transfer fees.

Heiko Khoo, London, UK

Why not just give the feckless an amnesty providing they promise not to do it again. After all we do it for illegal migrants and criminals, why not for the very people who have kept our "consumer" economy boiling.
We must be taking lessons in economic management from Zimbabwe. Time to bail out, this country is now a basketcase.

John, Lincoln,

Brilliant..... We're already in the middle of a huge withdrawal by the Banks from credit. if this goes ahead, the Banks won't even think of lending to anyone with less than an AAA rating unless they provide cast-iron guarantors.

Bill Beetham, Moscow, Russia

Only The nasty debt collectors will be objecting to this move. They buy the debts for next to nothing and then charge outlandish fees for collecting a debt for which they probably only paid buttons.
Common Gordon add to the ERO that where a party owed is selling a debt, that they must first offer this settlement figures to the debtor and allow the debtor to buy in full at this price. If a party owed can clear his books to a debt collection agency for between 10 and 20 percent of the total due then the law should force them to offer to the debtor at the same figures.

Cut out the debt collection agencies who only prey on misery. The companies have no interest in your welfare just harassment and destroy peoples lives in pursuit of over the top fees and charges. Start Gordon by regulating the fees of all debt collection companies to a manageable level. Then see how many stay in the business,

Frank, Cheltenham , UK

I just don't understand why this government feels the need to interfere more and more in our private lives. If you build up debts you personally take on the risk. A healthy economy and a healthy country needs its fair share of bankrupts and financially disfunctional people. It doesn't need the government moving us to a socialist state by stealth.

I can't wait for a general election to get rid of Labour and its appalling, shortsighted, self-serving legislation.

Martin, Maidenhead, UK

I have a better idea which will appeal to GB's intellect, open a shop on every corner which issues free unlimited money. This will make the UK economy and currency really popular with the rest of the world who will flock here to invest.
By the way, I also believe in Lepricorns.

mark w cooper, southampton, uk

When I was in school (about 14 years old at the time) the UK was still emerging from being an industrial economy. I didn't understand how the journey we were making would work and remember asking my geography teacher how we would create money as we became a service economy. He didn't know either.

20 years later we do know, and its resulted in record levels of personal debt, IVAs and now EROs.

How is it that a 14 year old girl knew it couldn't work in the long term, but apparently the greatest economic minds in the country didn't?

Genius.

Adrienne, Macclesfield,

Crash Gordon & Co have utterly lost the plot. They have obviously learned nothing from how the banks have responded to the credit crunch - by becoming far more selective of borrowers, keeping rates well above base etc. How will the banks react to being told that they can't enforce a contract freely entered into with a borrower? Probably by being even more picky about whom they choose to lend and charging even higher rates to those who can and do repay. That's fine with me, as it will just speed up and deepen the current property crash as even fewer people are able to buy. First time buyers and other priced out of the market should actually rejoice in the fact that the government economic policy seems to be based upon a sub-GCSE level of knowledge.

Graham, Oxford, UK

I think EVERYBODY who's struggling with debt should just declare themselves bankrupt. MILLIONS OF PEOPLE. It would serve the government and the banks right for being so cynical, greedy, and uncaring of the huge problems they've created for people.

That'd put the problem squarely where it belongs - with the big corporations. How about it people? Stop being victims to this corrupt extortion! Everyone in the UK declares themselves bankrupt. Sorry, Mr Brown, sorry, Mr Bank - I can't pay you back, cos you've screwed up the economy. What you gonna do now?

Voland, Caen, France

While the ERO is in force the interest accrues, and presumably interest on the unpaid interest along with the fee to set up the ERO. This on the face of it looks worse than trying to pay the debt off.

Instead of EROs how about legislation against unfair fees and penalties, legislation that limits the amount individuals can borrow based on income and assets and a proper shake up of Payment Protection Insurance?.

Trevor, Dublin, Ireland

As pointed out by others, this move risks elongating the credit crunch and increasing the cost of borrowing in the medium term.

The main purpose of credit within our capitalist economy has been subverted away from supporting productive activity towards supporting consumption.

Any bankruptcy protection should be primarily targeted at those using credit for productive means, not consumption.

Tim, London,

I wonder if Gordon will let us stop paying our taxes as a means of paying off our depts.

Anthony Box, Wretton, Norfolk

Is this an admission that personal debt is out of control?

JM, Manchester,

As someone who really is prudent and had not run up debts I certainly won't be voting for Labour next time. Everything they have done lately is just wrong, wrong, wrong.

richard bradwell, newcastle,

The implications haven't been thought through.
There is now to be "senior debt", such as the mortgage, student loan, and child support demands, and "junior debt" which can be delayed, maybe even repudiated.

So the existing junior debt suddenly becomes a lot less valuable, and interest rates on new junior debts will shoot up.

Malcolm McLean, Bradford, UK

This is typical 'Spinomics' from Labour. Gordon Browm is looking for anyway he can delay the inevitable. The problem is that it is inevitable, and the longer i goes on the worse it will get.

This governments spending coupled with smash and grab on pensions has meant that the cupboard is bare and the only way out is to delay bankruptcies through this sort of headless approach that does nothing for the long term issue.

Isn't it funny how the ERO's won't exempt you from paying Government agencies but the rest of the Economy can suffer. I'd sell bank shares now before they all have to be nationalised!

Julian, Tonbridge,

So as usual those who have managed their finances sensibly will pay for the feckless.

We have the court case regarding the bank charges to look forward to. I think this will overturn the free banking that responsible people have enjoyed. We will be punished by fees and charges to cover the morons who cannot run their finances.

Gordo Brown a one man disaster for the UK

H Horse, UK, Uk

Where is the benefit for the debtor? The effect of this will presumably be to ruin an individuals credit record without removing the need to eventually repay the debt. Bankruptcy would clearly make more sense for such people as this just seems to prolong acceptance of the fact that you have gone bust.

Ian, manchester,

Alan of Luton is absolutely right. This is yet another tactic to reward the irresponsible borrower, to add to IVA's, lax bankruptcy rules and the welter of regulation regarding debtor's "rights". All of this simply adds to the cost of living to those of us who actual keep our agreements and repay debts on time.

Peter, Bristol, UK

O.M.G Fracklass, Manchester - do you REALLY BELIEVE THAT?

Robert D, Chelmsford, Essex.,

I suppose theres no point in mentioning to Grasping Gordon (the self-nominated financial genius) that all this will do is ensure that lenders will be even more reluctant in future - which is certainly not going to help the credit crisis!

Mike Bibby, St Albans, England -not EU

Once debt problems reach this stage in the vast majority of cases having a 12 month breather will just pile up the interest payments and nothing more. An IVA or bankruptcy awaits (unless you can just apply for another 12 months off!). What then is the point of this measure? It looks like a totally cynical attempt to delay the inevitable until after the next election.

New Labour is unfit to govern this country on every conceivable level.

david, halifax, Britain

Both myself and my partner work hard and earn well above the average salary. We have an reasonable sized house, a nice car and live within our means.
However I look around at a good majority of other people and have never been able to understand how they afford the expensive clothes,TV's, new cars and overpriced houses, when we certainly can't with two salaries.
Either everyone where I live is a Company Director/Footballer/ TV celebrity which I feel is unlikely, or it is either on the magic plastic, or offset against home equity. A good majority of the people I know are living hand to mouth with salaries/overdrafts with no safety net whatsover.
I am in my mid thirties and genuinely fear for the future feeling that we are sitting on a ticking bomb, what with insatiable appettite/greed of the city for growth/profits year on year, incredible growth in debt, and spiralling cost of living, where will it all end??
I have a feeling I know the answer.......
Canada or New Zealand anyone?

Lewis, Southampton, Hampshire UK

There has been a bubble economy for far too long running on debt. Lowering interest rates to support debtors is welfare capitalism. Now house prices are not increasing the banks are now worried that the trillion pound time bomb is about to blow.

Quentin, Reading, UK

This government is damn clever. They know the economy is about to collapse and they also know that the Tories are going to win the next election. Guess who's going to get the blame for the collapse ..... yep, the Tories ... Labour walk away once again having messed up our country.

Vanessa, B' Stortford,

Kee-rist. We'll be borrowing the obolus for Charon next.

rob, Seal, Kent

I can now see why GE Capital wants to sell its UK credit card business, this will make it more difficult for people on the edge of credit worthiness to get loans.

Bill , preston,

Until the stigma is re-introduced to personal insolvency debt in this country will continue to spiral to the detriment of us all. Make bankruptcy a shameful experience - culpability should result in a jail sentence. I've seen too many deliberately living beyond their means, knowing a swift 1 year bankruptcy will wipe their slate clean whilst the reponsibile pay higher prices to fund them. Its been made too, too easy. Make it a crime again to encourage personal financial control.

caroline, shropshire, uk

how will a repyment stoppage stop people getting into debt? seems to me it's telling people it's alright to steal money by borrowing and not repaying. or am i missing something?

Phil Barnes, preston, england

Wake up sheeple!! This is being rushed through to protect LENDERS from rising defaults and stop the banking system collapsing and the govt. with it. The borrower ends up with INCREASED debt and the lender gets 12 months 100% protection insurance against default paid for by the borrower in more interest. This has been designed by the bankers, for the bankers to ensure a continuous stream of interest and a 1- way bet on unsecured lending. All the downsides of an IVA or bankruptcy for the sheeple and none of the benefits. Who does Gordon Brown work for? UK Voters or HSBC, CITIGROUP, MERRILL LYNCH, RBS ?

john smith, manchester, UK

This is welfare capitalism. Be as greedy and reckless as you like on the way up and enjoy your profits, your cheap credit and the fruits of your hyperinflated assets. When it all turns sour rebrand yourself as a victim and New Labour will be waiting there with their repayment holidays, bailouts and ultimately debt amnesties. The hard working and responsible will pick up the tab as usual.

Ken, Birmingham, UK

Stupid government that thought the boom, based on credit, would go on for ever.

Stupid greedy banks who lent money to everyone and anyone, and gave staff targets to lend money. (Who ever heard of a bank having a sale?)

Stupid greedy borrowers who borrowed far more than they could possibly afford to pay back, so that they could have immediately the very latest in everything.

Bloody pathetic country that makes a complete mess of evrything it ever touches.

David Moncur, Dundee, Scotland

Always said Brown's economic record has been built on straw. Growth by unlimited borrowing is just a mirage, underneath it amounts to nothing. Pity a few economist have not been able to see what is as plain as the nose on face. This latest idea is just a desparate effort by this Government to put off the day of judgement, which is now upon us.

Chris, Woodbridge, Suffolk

It is so simple! No restrictions on amounts lent by irresponsible banks to gullible borrowers,combined with disastrously low interest rates. No need to say more,except that the planned contortions to try to get people to avoid responsibility for their unwise financial decisions is pathetic?

nic, royan, france

Robert Twizell,

That is unless Prime Minister Crash Gordon Brown Unelect, doesn't work overtime with his John Bull printing press running off fivers!!!


Ha hah ah ah haaaa !

Austin Tassletine, South West, UK

Most ot the people (including DKP?) who have run into financial problems have only themselves to blame for wanting to borrow money when simple arithmetic would show that they would have difficulty making repayment. The banks are similarly to blame for allowing staff who know nothing about the rules of credit to agree to unjustified requests for facilities. Those staff are more interested in getting their bonuses. It's time that top banking management got a grip and learned their traditional trade.

David, Poole,

where is the law to help the creditors?

alan morgan, Merifons, France

Credit providers affected will tighten up their criteria and thus borrowing will be cut giving yet another credit crunch.

Moreover, like all this government does, it is micro managing, and the scheme looks complicated to administer, and does not address the main problem that creditors tend to have - mortgages and tax, particular local taxes.

The classic response to down-turns is to cut interest rates and cut taxes. Thanks to his over-spending during the years of plenty the latter is very difficult. However, tax cuts are more desirable than interest rate cuts as the latter will be inflationary. The £ is already very low and as we are a net importer now of energy and food and most manufactured goods, where prices are rising anyway, cutting rates will inevitably lead to prices rises. Which will lead people on the margin to fall into debt.

But there is no escape, as tax cuts will puch up governmetn borrowing and lead to interest rates hikes, making the debt problem worse.

michael Corby, London, England

Keep their creditors at bay? Last year the government was giving bailiffs powers to break in to your house and help themselves to your goods. Is this new initiative designed to stave off that process for a couple of months?

Simon, Chatham, Kent

PPI is effectively dead and as lenders made a lot of money out of this they will pass this on by increasing their interest charges.everyone will end up paying for this.If someone takes a ERO will they be allowed to take out more credit,or will they be blacklistered?A desperate measure from a desperate government.If people have taken on too much debt it is obvious consumer spending is going to slowdown.I was surprised by this article,but there again,nothing this bankrupt government should surprise me.What next,I dread to think?

stephen hulton, eure, france

This is a welcome move, but something needs to be done the Lloyds TSB current account debt spiral.

Lloyds TSB has just introduced the that practive of adding charges to an overdrawn account, one new charge per day for ten days then adding more charges as the first set of charges were not paid off (an unlikely event if you have been made unemployed and the banks has hit you with £300 plus).

The board of Lloyds TSB know this is an engineered debt spiral and are quite happy to profit from misery. The individual members of the board and major shareholders are responsible. Morally they are the same as slave traders - trading in the misfortune of others.

Its time that society and the city made directors who engage in these practices socially unacceptable. Stop inviting these people to dinner parties, receptions and social events.

John , Richmond Upon Thames, England

Why is everybody here criticising the government, personal debt is just that: if you don't have the money don't spend it , simple as that, wide screen TV's and new cars are not essentials in life, if people cannot workout their APR's on credit cards and other loans then it is their own fault. People do not seem to want to wait for things or go without them at all, it seems that conspicuous consumption is all the rage, and that people live for brands and labels, well in the end it all has to be paid for.

roy jordan, Curitiba, Brazil

This is a nonsense... take a typical case, a couple with kids with a mortgage who for one reason or another have loans and card debt they cannot really afford. In a lot of cases no redundancy or illness is the case of defaulting on these debts, its simple bad management. So lets say they go into an ERO, they couldn't afford the debt before, after the ERO the payments will be even bigger, their work has not moved on so where are they... answer still in trouble. Going into an IVA or debt management would have been a quicker and cheaper solution for them, now the process appears to be ERO then IVA. The ERO will crucify credit records to the same degree and IVA does. Madness.

Anthony Harrisson, london,

Surely now we do not have to endure this (so called) Government until the next election?. Who has the legitimate
empowerment to instigate this clause regarding No Confidence?. Her Maj?, the Opposition or Santa 'Clause'?.
Brown has kicked his way out of his closet, and has left the
lav stinking to high heaven.

Beverley, Wton, England

Ah! a new little 'gem' from the Brown lunatics.
So let's get this right, as a saver, thus a 'lender' I go further to the back of the queue and finance other peoples' chosen life styles of reckless spending. These are the same lunatics who have recently instructed the ridiculously named 'independent' BOE to reduce the base rate thus reducing my income and causing further inflation. (2.1% the joke of the week). I use the the words lunatics several times deliberately as they are obviously in charge of the madhouse now.

Robert D, Chelmsford, Essex.,

Spot on Edward! This has got to be the most ridiculous idea I have ever heard! The UK economy is going only one way at the moment, and this will only serve to postphone the problem, not solve it!

Andy, Bath,

I suspect most debtors will use ERO process as a negotiating tool to reduce their loan balances and/or interest rates. Presumably the courts hearing such motions would encourage such settlements. Getting an ERO creates a heavy burden for borrowers because they wouldn't be able to use their credit cards or obtain new loans. The adage things are rarely served as hot as they're cooked applies here.

MARK KLEIN, M.D., OAKLAND, CALIFORNIA

Finally, real help and protection for debtors that want to regroup to repay their debts, most do but just need breathing room.

For people that think vast majority of bad debts are the result of people trying to abuse the system, it is just not reality.

Most people want to repay but are constantly met with unreasonable immediate demands by creditors, rejections to IVAs and drift towards bankruptcy as a resolution because there are few options.

Nice to actually see government for the people.

Fracklass, Manchester,

This is a financial matter so why the invovement of the Ministry of Justice and not the Treasury?
We already know that this government and Brown in particular has no financial acumen and doesn't realise that if the risk of lending rises - payment holidays meaning that debt is paid back over a longer period and increases the amount of bad debts- then so does the reward (cost).
Such a stupid governemnt.

Eddie Reader, birmingham, england

Ha ha ha haaaaaaaa!

I can't belive it!

What moron dreamed this up? Its not my fault I borrowed too much to watch X Factor and buy celebrity magazines!

Can I have a repayment holiday on evreythign I owe?

FOR LIFE?

Ha ha ha ha haaaaa !

Austin Tassletine, South West, UK

This is cosmetic tinkering. In some modest debt cases it may be possible to regain a former income level and continue to pay off debts after a repayment 'holiday'. But in many cases it will not . For example, a couple before divorce may be better off than as individuals afterwards, or someone may lose a job through long term illness and have to live on benefits. In such cases, either bankruptcy or an IVA would be better for the individuals. Also, allowing interest at say 19% to accrue for a year can add a monstrous amount to the final bill. Much depends on personal income and house equity circumstances (if any) and the ERO seems to be aimed at a quite minor part of the total debt problem. Perhaps it would be better seriously to limit credit card operations. I have seen a lot of people with card debts in the £20k to £50k range, no assets and no way to repay. The ERO will not help them or the banks.

colin, Shrewsbury UK,

More muddle-headed idiocy - one assumes that this will constitute another (perfectly rational) reason to avoid returning to work, in the event of redundancy.

Twotimes, Swansea, UK

lenders will adjust loan rates-higher- to compensate for this this-simple.

mike, oxford, england

Maybe the banks could do this without being forced. Even when an agreement is in place to make reduced repayments they still insist on chargng fees and chasing the customers. The banks have brought this on themselves with their own greed. Bring back branch manager who you knew rather than call centres.

Mary, Hornchucrh,

Mortgage lenders should be forced to reduce rates also. Can' t believe they are being left off the hook.

javed, london, uk

We have to get rid of this Stalinist government - as soon as possible!
Sally, Brentwood

Sally Copperwaite, Brentwood, Essex

So this government has allowed uncontrolled and unsupported debt to fuel growth for the last ten years and are now trying to put it right. Not a hope! We are in it up to our necks thanks to clever Gordon Brown and now the piper has to be paid.

Good bye Mr Chips.

D Case, Newquay,

Quite simply he won't be able to without interest payments being made on at least the capitalalised amount (as with any large amount such as that represented in a house).

He obviously has very bad lawyers advising him, but then one may suspect that the front bench were never up to much, hence the reason they went into politics in the first place.

Article 1 of Protocol 1 protects the right of property (including loan capital and interest). The European Convention of Human Rights makes it quite clear that the ECHRR will look at the realities of the situation and not the label. Is anyone seriously going to say that deprivation of interest is not a de facto deprivation of property?

Or of course is someone else going to pay for this?

Pete Balchin, Solicitor , Bristol, UK

Every single bit of governement legislation panders to rewarding irresponsible behaviour while penalising responsible behaviour. If everyone gave up trying to be responsible we would then have the country we deserve and Labour's true vision would be realised: total and utter anarchy.

Alan, Luton,

Totally agree with Edward (London). This is typical Gordon Brown 'smoke and mirrors' type economics. All they are doing is causing more distortions to an already dysfunctional economy. A cynical person might think he is trying to head off a housing slump until after he can call a snap election next year. These are dangerous times - his own words - and he is putting our country in further peril to serve his own political ends. However, I think the electorate are not so naive any more and those who can will bail out of property before the EROs expire.

Steve Marchant, Broadhempston, UK

Utter fecklessness.

Jon, London,

If it helps avoid so many unpaid bad debts (thus adding to the credit crunch) then this can only be a good thing. For many people the normal course of action is to go bankrupt, which then leaves companies bearing the brunt but whilst looking at this the government should also address the issue of short term loan sharks who prey on low income individuals wanting some extra cash in times of need.

Alan, Coventry,

Brilliant Concept ! The banks and other lenders have made a mockery of lending irresponsibly to anyone regardless of their status in the first place ! Most of them have already made hefty profits in interest, unspecified, overpriced charges etc which borrowers have paid for some time before they have begun to default. The spiral has just continued and borrowers need help from someone bigger than the banks to assist and guide them out of at least part of their misery which was partly engineered by the banks in the first place and give them some breathing space! Well done Gordon ! Consumer Rules !

DKP, London,

I'm for gettting out of sterling and into gold - this economy and fiat currency is finished. Probably by design.

R McAuley, Antrim, NI

What a Joke. This is a knee-jerk reaction on a scale similar to that of the Norhern Rock fiasco ! The country has lost it's support and independance over the last 20 yrs : and I'm only 40. More fees or stealth taxes for setting it up. Go bankrupt or IVA.

Rose , Hampshire,

Oh dear. How long will it take before the Government finally accepts that measures like this, rather than decreasing indebtedness simply, remove the sanctions that make people think twice about living on tick. As a result people are repeatedly taught that borrowing money they cannot afford to repay is something which can be done without compunction.

Just what is going to happen to the cashflows of the lenders as a result? They will be cut of course. Then the obvious solution for a lender is to make fewer loans to new customers... hence deepening the credit crunch.

One way or another there are going to be a lot more bankruptcies and house reposessions in the next two years

Robert Twizell, Reading,

What a short-sighted and illogical move by an increasingly desperate government. Having watched personal debt go through the roof to the point at which it is going to collapse the economy, they introduce a measure to defer the problem until tomorrow when it will be worse. The banks response to this will be to raise the interest rate payable to cover their loss of immediate cash flow. The accrued interest after the deferred period will mean higher payments will be demanded in the future. This seems to be the general thinking of this government. Brown consistently fails to tackle issues head on preferring to close his eyes, think of yesterday and hope it all goes away. Britain has too much debt. This can only ever end badly as the consumer wilts.

Edward, London,