Conservatives launch Debt Clock
Brilliant. Fantastic. Big, bold and with all the subtlety of a a Gordon Brown smile. If this is the measure of the Conservative Party's advertising campaign over the next six months, it will be as effective as the 'Labour isn't Working' campaign of 1979.
It is a 'national debt clock' which is being projected onto Battersea Power Station. It shows the national debt in real time, rising by £5,500 per second.
The latest official figures show that the debt was £829.7 billion at the end of October.
The debt today stands at £847.9 billion.
And is rising by £5,550 every second.
That’s £23 per family per day.
Moody's have warned that the UK faces ‘an inexorable deterioration of debt affordability in the short term under almost all foreseeable scenarios'. This comes just weeks after Fitch warn that the U.K.’s sovereign credit rating is most at risk among top-rated nations. The rating faces risks because the UK needs 'the largest budget adjustment'. Earlier this year Standard & Poor’s lowered the outlook on the UK’s AAA rating to 'negative' from 'stable' on May 21, citing the country’s rising debt burden.
The national debt is predicted to double to £1.4 trillion in five years. Public Sector Net Debt is predicted to more than double from £609.1bn in 2008-09 to £1370bn in 2013-14.
£1 in every £4 spent by the government this year is borrowed. The Budget shows net borrowing in 2009-10 at £175bn, this is 26% of the Total Managed Expenditure of £671.4bn.
This year alone, Labour will add £2,850 to the debt of every child. Government borrowing this year is £175 billion, or £2,850 in extra debt per person. If the official economic forecasts are wrong, it could be even higher.
The average family will have to spend over £2,500 a year in taxes just on paying the interest on Labour’s debt. This is more than what families currently spend on average on petrol costs, gas bills and electricity bills combined. It is more than half the cost of the average family’s current annual mortgage interest payment. Households spend on average £754 a year on petrol, and £827 on gas and electricity bills. The average family with a mortgage currently spends £4,285 on its mortgage interest payments.
What you could buy with the interest on Labour’s debt:
If Britain was not going to spend £63.7 billion a year on debt interest, we could:
Abolish fuel duty, inheritance tax, and stamp duty or
Abolish council tax or
Pay for 1.5 million extra police officers or
Pay for 1.6 million extra teachers or
Pay for 1.9 million extra nurses or
Cut the basic rate of income tax by over 13p.
Britain will spend more next year on paying the interest on Labour’s debt than on educating our schoolchildren. The Dedicated Schools Grant in 2010-11 will be £31.9 billion. Debt interest payments will be £42.9 billion in 2010-11, and are estimated to rise to £63.7 billion by 2013-4.
Britain will spend over three times as much next year paying the interest on Labour’s debt than on our transport system. The transport budget in 2010-11 will be £13.8 billion.
Britain will spend more than twice as much next year paying the interest on Labour’s debt than on police and prisons combined. The combined budget of the Home Office and the Department of Justice in 2010-11 will be £20.4 billion.
Britain will spend six times as much next year paying the interest on Labour’s debt than on building homes. The total budget for ‘Building and improving the supply of housing’ in 2010-11 is £6.4 billion.
Britain will spend more than twice as much next year paying the interest on Labour’s debt than on tax credits. The total budget for tax credits in 2010-11 will be £21.8 billion.
Britain will spend more than four times as much next year paying the interest on Labour’s debt than on the Olympics. The total budget for the Olympics is £9.35 billion.
Leading economists agree that the UK needs to do more to tackle the deficit. Mervyn King said: "The longer there is not a credible plan that sets out what actions will be taken the more that [rating downgrade] is a risk" (evidence to the Treasury Select Committee, 24 November 2009). The OECD say: "The weak fiscal position makes further consolidation necessary; an announcement of concrete and comprehensive consolidation plans upfront would enhance macroeconomic stability" (Economic Outlook 86, November 2009). Michael Saunders at Citi says: "Since the Budget, other groups (IMF, OECD, European Commission, CBI, major ratings agencies) have warned that more needs to be done to return to fiscal sustainability" (Citigroup note, 4 December 2009). The CBI say: "History tells us that these are really difficult nettles to grasp but if you grasp them in a clear and bold way, then the pain lasts for a shorter period than if you just limply grab hold of them… Our strong instincts are that the risks of going too soon are less than the risks of waiting too long" (Richard Lambert, CBI Director General, quoted in FT, 19 November 2009).
And the saviour of the world, Barack Obama, says: "I think it is important though to recognise that if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the US economy in a way that could actually lead to a double-dip recession" (in The Times, November 18 2009).
Labour has cursed the nation with a debt to Mammon which will have to be satisfied.
And it will hurt.