Monday, 3 January 2011

National Debt False Economy

Every now and then I like to remind people about our debt. How big is it compared to the past? And where did most of it come from.

From figures published May 2010, UK public sector net debt was £903.0 billion. (or 62.2% of National GDP) – Source: Office National Statistics.

And £850 bn was the official cost of the bank bailout.

Notice how close these numbers are? £903.0 billion debt less £850bn from the bank bailout would leave our debt at £53 billion. Relatively speaking this is small beer.

Now I don't claim to be a financial genius, but why aren't these figures talked of more often? Many people suspect the Government is using our debt as an excuse for their own agenda; cutting services for the poorest while allowing the rich to get richer.

They could simply push the banks to pay back what they owe. Clearly they couldn't do it all in one go but considering the big bank profits recently they could make a start.

This is a site debunking some of the myths surrounding the ideological need to cut public spending, False Economy.

Compare where we are today with what happened between the 1992 and 1997 elections.

Yes, our debt is going up and is higher than it was before the election.

But it's still lower than it's been for many years this century, and is lower than in many other similar countries.

Yes, it's costing more to pay back our debt and it's going up.

But it's lower than most years since the second world war. Just 6p in every pound of spending went on paying off debt last year, compared to 8p in 1996.


Tony Jones said...


Absolutely spot on! This message needs to get spread more widely, because the established financial comentators are largely ignoring it. As you know, it is being used as the platform for unfair and unnecessary cuts.

Happy New Year!

Adrian Windisch said...

Cheers Tony, happy new year to you and all readers.

Please put something like this on your blog also, the media seems to be following the cuts agenda. We need to tell them there is an alternative.

Jonathan said...

The bank bailout money is in addition to the official national debt figures.

Also not included in either of these figures is the liabilities of Royal Bank of Scotland, Lloyds and Northern Rock, eg the money we have deposited in accounts there that we can ask to withdraw at any time. That is somewhere in the region of £4,000bn, but it is mostly backed up by assets held in those banks, and in the Northern Rock / Bradford & Bingley "bad" bank.

Sean O'Hare said...

No idea where you got those figures from, but they are pure fiction. They don't even cover the amount of debt incurred by Gordon's PFI projects. The truth is a debt of more like £1.4 trillion and growing by £3 billion every day. Interest rates are low at the moment, but due to QE inflation is about to rocket and the looming need to refinance is going to put us is the same position as the ROI, i.e. bankrupt and crawling to the IMF. Labour does it again. It is sad that the Green Party also have their heads in the sand. If they became a practical party, with a practically minded leader instead of an airhead they might just pick up support to make some headway on some of their worthwhile policies. Of course combating non-existent AGW is not one of their worthwhile policies. Protecting our environment from over development.

Adrian Windisch said...

I have given a reference to my sources, you have get to do the same.

You seem to be the one with your head in the sand with this and climate change also.

Adrian Windisch said...

Lab Tony Jones has blogged in support here,

Cons Richard has blogged against here.

I have commented on his post, he doesn't much like what I have said, for some reason.

Thanks for responding to my post.

Are you saying Gordon did a good job with the economy, as David Cameron did at the time?

You appear to be saying now that Gordon did right to lend money to the banks, I understand he is looking for a job if you want to hire him.

Your link says that the Treasury "will probably be paying for the support it has provided to UK banks for years to come". I would like to see the government ask for our money back from the banks, we could sure use it. You may disagree.

The Greens have a fully costed plan for the economy, a real alternative to the big three parties.

Sean O'Hare said...

Re-reading my previous post I did make one mistake. I stated £3 billion per day when I meant £3 billion week.

You asked for a reference so how about:

They put the figure debt at £952.8 billion as of last September. To that I added £40 billion to cover interest and further borrowing since that date. I'm sure there is additional hidden debt (PFI pension and benefit liabilities etc.) bringing it fairly close to the £1.4 trillion I mentioned.

Adrian Windisch said...

You said my figures were fiction then ypu seem tp agree. I know Gordon managed to get PFI out from the calculations, about as silly as excluding transport from emissions calculations. Dodgy dossier all over again.

My point is that if you take of the money we gave the banks they are not so bad. We can get some of pur money back, but its not on the agenda of the big three parties. I dont know why.

Sean O'Hare said...

We can get some of our money back [from the banks], but its not on the agenda of the big three parties. I dont know why.

No nor do I unless they are hoping to get more than our money back by a good profit margin and waiting for the markets to pick up. If so I hope they don't wait too long because it is going to be a traumatic year and there will be further dips.