Andy Silvester is the Campaign Manager at the TaxPayers’ Alliance.
We are used, now, to hearing about reducing the deficit and beginning to pay back the national debt.
The numbers are well-rehearsed. The deficit now sits at around £75 billion – the national debt, the product of years of borrowing, at £1.5 trillion.
Those numbers alone are terrifying; a staggering reminder of how easily they persuaded themselves that spending more and more every year was sensible policy.
But in truth, the national debt is far worse than that, as we at the TaxPayers’ Alliance reveal today.
The Oxford English Dictionary defines a debt as “a sum of money that is owed or due,” and with that definition rather than the narrow definition allowed by accountancy, the real national debt – including future obligations that we can’t get out of – is now north of £8 trillion.
It’s worth reading that number twice.
The official public sector debt is £1.5 trillion. Thanks to the generosity of politicians (albeit with other people’s money), taxpayers are also on the hook for £1.8 trillion-worth of unfunded public sector pensions. Unfunded state pensions are estimated to cost another £4.4 trillion.
Adding in the remainder of the debt from bailouts during the financial crisis – a handy £300 billion or so – pushes the bill up higher. PFI debts, nuclear decommissioning and local government long-term liabilities contribute the same sum to our future bill too.
This is, in short, not good news.
We are already paying nearly £50 billion a year in debt interest payments, just on the £1.5 trillion “official” debt. That’s more than we spend on education – as a sign of how broken our public finances are, the fact that we’re paying more as a result of past mistakes than we’re spending on the next generation takes some beating.
There is no particular sign that the danger is passing, either, and demography suggests it could get worse. The British population at large isn’t getting any younger and that will put significant stress on public services and, therefore, the public finances.
Tomorrow will see protesters lining the streets of the City and Westminster, and if previous iterations of these anti-austerity protests are anything to go by the protesters will predominantly be of the younger generation – the very generation who will have to pay the price for today’s irresponsible borrowing.
We hear the words deficit and debt bandied around as if they’re just terms plucked from the pages of the textbooks of the dismal science – but they aren’t. They are real, tangible, material things that affect our ability to deliver essential services.
Caring for the elderly, keeping the street lights on, teaching the next generation the skills they need to get on. Piling up sky-high debt makes it more difficult to deliver those things in the years to come.
The Chancellor will no doubt be under political pressure to ease up on austerity. Such is the nature of the Westminster and media bubble – the loudest voices are heard the most often. Yet so many of the policies that provoke the most earnest protest are those which are popular with the silent majority in the public.
Bringing the welfare cap down to £26,000 caused all sorts of furore in the newspapers, but polling suggests it was one of the most popular government policies of the last twenty years.
And more than that, this government should take heart from the fact that they’ve just been elected on a mandate to reduce spending – and significantly. Going further and faster is entirely doable.
In short, reducing the deficit is no longer a Tory priority, but a national one. The consequences of ignoring the growing debt would be severe.