Dr Lee Rotherham is author of A Fate Worse Than Debt: A Beginner’s Guide
to Britain’s National Debt from Boadicea to Cameron
In the coming days we will see where the Spending Review is taking us. You never know: it might even draw a few precise statistics from Labour on what extra sums they’d commit to borrowing.
I’m perpetually astonished by just how blazé Opposition politicians
are about the state of public finances and just how bad the deficit actually
is. Ed Balls’s comments denying the seriousness of Labour’s addiction to tax
and credit, and with it any personal responsibility for where we are today, burn
any credibility he might have as a potential Chancellor. It also suggests Normanton’s
board gamers suffer a high attrition rate from dehydration. Monopoly games must
go on for weeks with all the quantitative easing that’s endorsed by the
But since it’s difficult to put those abstract billions into
context, here’s a ten pointer of what the deficit and debt means when translated.
Labour Party has come in for some stick recently over its donations. Some of
the Public Sector deficit for March could alternatively have been siphoned off from
the state, banana republic style. Judging by the party’s fundraising as
reported to the Electoral Commission over the past four quarters, it would have
taken 52 minutes to instead tap its annual income from the country’s growing
sector pay offs have also been in the headlines. In gagging order terms, and
given the NHS headcount as at January 2013 (a staggering 1,191,683 employees since
you ask), the national net debt as at March would be the equivalent of a pay off
of just shy of a million pounds per NHS employee never to discuss trolleys in
corridors ever again. Or you could hand over to everyone in the UK who’s in any
job the average going rate for gagging orders not to read the Daily Mail.
- Salisbury Cathedral is a monument to the glory of God. You could make a monument to the
national debt instead. Come September this year you could have spent the debt
replacing all the material making up Salisbury cathedral with silver bullion
… four times over.
borrowing over 2011/12 by itself exceeded the loans and share purchases
previously used to shore up the banks during the banking crisis. In GDP terms
it would in its own right scrape into the top quarter of world economies.
Instead of worrying about Romanian migrants, the UK could just have rented
- If we’re
generous we might include the one-off Post Office pensions sell offs as part of
the UK’s reduced deficit. If we did, the 2012-13 annual deficit means that the
UK has reduced its deficit from two and a half RBS bail outs a year to just the
on Glasgow’s moors, is the site of Europe’s biggest land wind farm build. 140
monster turbines are going up over 22 square miles. The money borrowed by the
Government since September 2010 would pay for the project to be expanded across
the entire United Kingdom, averaging six and a third turbines every square mile,
dicing owls nationwide.
British army, we are told, has more horses than tanks. This is because (a) nags
cost a lot less – upkeep for all the army’s horses annually costs 1/9th of a new Challenger 2 (b) tanks look rubbish pulling gun carriages at state
funerals and churning up parade ground tarmac in front of tourists. If
successful in pushing for a Trooping of the Colour that resembles a (brief and
dizzying) Red Square Parade, Danny Alexander would save five minutes of the
deficit from March.
bailout crisis was triggered by an £8.4 billion package (excluding the
obligation to find £10.9 bn locally). UK Public Sector Net Borrowing in March
saw that pass through our fingers in seventeen days.
current estimated annual debt interest payment is £42 billion. That’s the sum
that Crossrail is supposed to bring back in to the economy, if built and if the
numbers aren’t just made up. Around £17 billion of the pay outs is the taxpayer
subsidising private pensions funds; tidy if you’re a beneficiary, though the
greatest single beneficiaries likely include a number of retired bankers. Meanwhile
the equivalent of around 2 2/3years of
DfID’s budget annually gets paid out as dividends to foreign lenders.
- Lest we
forget how it was that we got here, total borrowing under Labour since it last
ran a surplus (in 2001) is estimated at £428 billion, and £218 billion if we
just count deficit spending in the good times when it should have been put
aside for the bad. That total additional debt would instead have kept Tony
Blair’s Faith Foundation going until roughly AD 122,000, by which time it would
have achieved world peace or the radiation should have died down.
The debt is big; the deficit is bad; we need to get back
into the black. I would suggest a starting point is looking back at how the
departmental budgets were looking relative to each before New Labour went on
its psychedelic spending splurge, with a particular eye on the salaries and the
mega-departments that are teetering on the politically untouchable. But let’s
at least begin by everyone admitting the Government is spending money it just doesn’t