John Moss was the Conservative candidate for the City & East London Assembly seat in May 2012. Follow John on Twitter.
Just how much is £120,000,000,000? Or £1,000,000,000,000? Is £1 trillion more than £120 billion and what exactly is the difference between the debt and the deficit?
Recently at a tractor factory in Essex, Nick Clegg said he wanted to “wipe the slate clean” of our debts and that it would take five or six years to do this. Either he is economically illiterate (possible, but unlikely) or he is adding to the Coalition Government’s woes by using confusing language which makes it even harder for ordinary voters either to understand the scale of the problem, or the likely sacrifices to come in order to tackle it. To do that, the Government – and all its MPs – need to simplify the language.
First, some facts:
The last time Labour balanced the books was financial year 2000-2001. So they have been adding to our debts since before Tony Blair first got re-elected.
In the seven years before the credit crunch, Labour added £200bn to the national debt. In the two years after, they added another £256 billion.
In the two years since the Coalition Government came in, the deficit has gone down from £160 billion to £120 billion. But the debt has risen by another £250 billion. There is still a long way to go.
Now, some language:
If you spend more than you earn, you build up an overdraft. That’s the deficit. Say you had a £100,000 mortgage in 2001 and earned £30,000 a year. Well, Labour spent about £100,000 more than that and added that to your mortgage. So your income hasn’t gone up, but your mortgage has doubled.
So, first we have to stop running up the overdraft – which we’re doing, slowly, over six years. Take that £30,000 a year household. It was the equivalent of £8,000 a year in 2010, it’s now £6,000 a year. In four or five more years, we won’t have an overdraft.
Then, we have to start repaying the mortgage, which will take decades.