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National debt now adds up to £16,700 for every person
Jonathan Prynn23.04.09
BRITAIN'S national debt is about to smash the £1 trillion barrier for the first time.
Alistair Darling confirmed today the cost of rescuing the high street banks combined with the impact of the recession will almost double the nation's overdraft to £1.2 trillion within three years — that's £1.2 million million.
The massive rise in debt will reduce to a hollow boast his predecessor Gordon “Prudence” Brown's cherished rule that borrowing should not go above 40 per cent of its GDP. Last year GDP was around £1.4 trillion.
Economists fear it could take a generation for the Government to bring debt under 40 per cent again and it could be forced to inflict tax increases or public spending cuts on the electorate to get there.
The breaching of the 13-figure debt comes 315 years after King William III approached the banks of London to borrow £1.2 million to pay for the war against Louis XIV's France. Since then national debt has risen one million-fold.
The arithmetic of £1 trillion of debt is eye-watering. It is £16,700 for every man, woman and child in the country and would take 28.5 million years for someone on average London earnings to pay off.
It has led some international financiers to describe Britain as “bankrupt” although it still retains its top-notch AAA credit rating. Until the credit crunch ripped massive holes through Gordon Brown's national finances, the highest level of Government debt was the £743 billion recorded last month.
As recently as last November's Pre-Budget report, the Treasury was predicting a rise to just £602 billion this year, £729 billion by 2010 and £842 billion the year after.
That was before the Government and the Bank of England were forced to open the floodgates to douse the financial conflagration that threatened to bring Britain's economy to its knees.
It is not yet clear how much of the hundreds of billions of pounds spent on the banking rescue will stick as long-term debt but the International Monetary Fund has estimated it at 9.1 per cent of GDP or around £130 billion in today's money.
As a proportion of GDP, national debt will reach almost 80 per cent over the next five years, even on the Government's forecasts, and could even surpass 100 per cent according to some City estimates.
But even that is not a record, as debt hit 250 per cent of income during the Second World War and was still at 100 per cent in 1963. However, it will be the highest level outside the extraordinary circumstances of war. The £1 trillion government debt total has been reached just five years after consumer borrowing passed the same dizzying threshold.
Economists fear that although the debt is serviceable while interest rates remain at their current historic lows, any significant rise in the cost of borrowing could wreak havoc with the national finances.
Carl Emmerson, deputy director of the Institute of Fiscal Studies, said that while all developed nations were having to dig deep to cope with the global financial meltdown “our debt is increasing by more than is typical, so we are moving up the international league table of debt”.
He added: “If we can continue to borrow at the same level of interest rates then it is not going to be too great a burden. But clearly the risk we're taking is that if there is an upward movement in interest rates then the Government will have to start implementing tax increases and public spending cuts very quickly.
“Otherwise, the markets will be spooked because they will not think we have a credible plan to reduce the debt. Obviously the more debt you have, the more you are exposed to that risk.”
Reader views (22)
Gordon Brown, Alastair Darling, Bank of SCOTLAND, Royal Bank of SCOTLAND. What do they all have in common ? (Hint: Find the word written in capitals in the preceding text).
- Brontosaurus, UK, Newcastle-under-Lyme
We need controls put in place so if (Heaven forbid) the idiot labour party are ever in power again, they cannot bankrupt the country (like every other time they've been in power)
- Zady, london
It is amazing how much money Crash Gordon has squandered over the last 10 years and not produced us anything to help us through this high-tax heavy bureaucracy created Recession.
- Makka, London
That;s OK. 16,500? I can do that. And after that I'll have no problems? You must be bloody joking! These Labour idiots are the same guys who knew what they were doing back in 1978.
Times really don't change. People just get more gullible.
- Coylum, vancouver, Canada
I would not worry about your partner; Jargonaut, South London; she owes just as much as you do; and you ain't seen her credit card yet.
- Mickyinlondon, london
Good Afternoon R,F Yorks,UK.
Neither a borrower, nor a lender is; someone once said; or wards to that effect; and that has been my guiding light throughout my life.
But I point out that even spongers and those on benefit; also pay tax etc.
I have found that the normal average working man is the most honest of all men; and they tend to pay much more of their actual earned incomes in taxes; than the richest men in the country ever pay, or paid.
I would never condemn anyone receiving support from the State; because there but for the grace of god; go we all.
Remember this also; the Statesmen themselves receive supplementary benefit from the average working class man and woman working hard to support them; and we do prop them up with high wages and benefits beyond the call of their duties etc; to call spongers parasites; is to call our leaders the same.
But we both know the delightful feeling of not owing a brass farthing to anyone; in that knowledge we are very happy and free; we are the lucky ones……Micky.
- Mickyinlondon, london
Oh dear. I don't have £16,700.
Does this mean I have to call one of the debt helplines who will help me consolidate this amount into manageable monthly payments?
And wait until my partner finds out I owe so much. Boy o boy! She'll be livid.
- Jargonaut, South London
I don't recall authorising the Government to borrow that much (or, indeed, anything) on my behalf; does that mean I have the right to sack them for acting 'ultra-vires' and deny any obligation to repay the debt? ... I thought not; nevertheless, the sooner we are rid of this abysmal bunch the better - not that I have much faith in the 'other' lot!
- Paul G., Newbury, Berks
The same old useless left-wing loony tax'n spend Labour Party and Government that it has always been. Now let's see how long everyone remembers to keep these buffoons out of Government. I hope come the next general election Labour are removed from the political map.
- Joe, Thornton Heath, UK
MickyinLondon - like you, I do not owe anyone any money - but you and I (and others like us) will be expected to pay for those on benefits.
- R.F., Yorks, UK
Oh Yes, blame the government for your expensive meals, holidays,flash new cars, homes that you knew you could not afford and had no intention of paying back, you bunch of criminals and all at your own countries expense and then you start going on as if you care about Britain. I don't think that anyone of these people have any right to call any person in this society names such as skivers and scroungers. At least their not liars and fraudsters like the lot of you who sold their souls for the next 25 yrs and more. The government should cast you into one of their prisons just as any other criminal that's right you bunch of fraudsters.
- Angel, London Lewisham
Common sense dictates that if you have the option, you should opt out of paying for National Insurance. I was sent a letter informing me that I needed to top mine up, but my reasoning is that I simply don't believe I will get as much as I have put in. In fact, I'm not even confident that there will be anything left to give when I hit a pensionable age.
- Ted, London England
So if I pay the govenment the £16,700 it says I owe them, does that mean I never have to pay taxes again?
- Haskey, London SE1
I've decided to pay my share off using either my credit card or possibily release some equity from my house.
Anything to releive the national debt anthing to help Labour out.
- Sandy, London
'£16,700 for every person' that means about £50K for every working person...? how are we going to fill that gap given that we are -like other countries- sitting on a pension/demographic time bomb...?
- Thierry, london
Well I don’t want to upset someone else in the UK; but I personally don’t owe anyone a single penny; so someone else owes £33.400.00; if averages of the population are the normal accounting procedures of State debts.
- Mickyinlondon, london
how are the dole people going to pay this when we support them though or tax and insurance
could we have a real figure for the hard pressed working people
not something pulled out of the sky
- Terry Chambers, London
Steve, London. Do you mean all those "skivers and scroungers" loitering within the House of Conmen?
The poor get poorer.
The rich get richer.
Your local MP does not give a hoot.
- Reuben Camara, Morecambe UK
And this is just the surface that we are being told about
- Jl, London
These people should never have been in charge of the Government and country - they should have realise, go resign from their position and let someone else run the country. If we were a company these people would have been kicked out or sacked.
- Max, Isleworth
Thanks Tony, Gordon and the rest of your useless party.
- Dave Davies, Basingstoke
This figure doesn't affect the millions of skivers and scroungers though.They're laughing all the way to the benefits office.
Shame we're not.
- Steve, London
