Labour like to say the Coalition is going “too far too fast” on cutting the deficit. What they mean is they would like to saddle you with £8,000 more debt than the Coalition. Yesterday, Ed Balls was at it again, denying on Sky’s Murnaghan show that Labour would borrow £100Bn more than the Coalition over the course of this Parliament. In fact, the extra borrowing under Labour’s plans to the end of 2014/15 would be £96Bn.
It may be £100Bn extra borrowing this Parliament. But the numbers are even larger when you look at how much extra borrowing Labour would saddle us all with by the time the structural deficit is eliminated. The Coalition plan is for structural budget balance by the end of 2015/16. Under Labour’s plans, budget balance would not be achieved until the end of 2017/18. The difference in the extra borrowing by the time a balanced budget is achieved? Getting on for £200Bn. That’s equivalent to £8,000 of extra debt per household – a new car or a new kitchen. So when Labour says “too far too fast”, the answer is “no to Labour’s £8,000 debt bombshell”.
The graph below shows the difference between the Labour and Coalition plans (structural deficit as a % of GDP) and the attached spreadsheet (.xlsx) has the numbers: