Public debt increases by £20 Billion every month

Last week, amongst the continuing furore of MPs expenses, many will have missed the publication of statistics which will have a major influence on the outcome of the next general election.

The public sector net borrowing requirement (PSNBR), which equates to the amount borrowed monthly by the government, hit £19.9 billion pounds in May. This represents the highest level of government borrowing since records began.

Worst of all, it was higher than expected, leading economists to suggest that the total amount of public borrowing this year, estimated at £175 billion in the Chancellor’s recent budget, could hit an unprecedented £200 billion by the time of the next general election. This equates to an additional £7500 of debt for every household in the UK.

This growing debt is down to a combination of factors.

First of all, we have lower tax receipts as companies make little, if any, taxable profit and lower levels of personal taxation receipts as hundreds of thousands of workers are laid off. For example, the Office of National Statistics reported that income tax revenues were 11% lower than in May 2008, value-added tax (VAT) receipts were 18% lower than the same month last year and the corporate tax take was a worrying 27% down compared with a year ago.

Secondly, we have higher levels of government spending as a result of 1.54 million people claiming unemployment benefit, a figure that is set to increase during the next few months.

This ‘double whammy’ means that the total amount of public debt could be over a trillion pounds within a few years unless there is immediate action to cut public sector expenditure.

Certainly, such a message is one that many politicians seem afraid to state publicly.

However, with nearly every household in Britain having to tighten its belt during the worst recession since the Second World War, shouldn’t our government be doing the same?

Well, it certainly doesn’t seem to think so, with Labour politicians trying to sell us all the idea that, if re-elected, they will continue to increase public expenditure whilst the Conservatives will indulge in spending cuts. This is despite individuals as prominent as the Governor of the Bank of England warning that unless public debt is reduced dramatically during the next parliament, the UK economy will face serious problems in the future.

The question, therefore, is whether anyone will believe any politician who says that they will continue spending or, to put it another way, continue to increase the mountain of debt already incurred in this nation.

The massive public outcry over the expenses issue shows that the voters of this country have had enough of politicians being, as the late Alan Clark once said, ‘economical with the actualite’.

The simple truth is that this government has spent with an abandonment worthy of most lottery winners without thinking once about the consequences of its profligacy. Despite this, it continues to try and convince the public that if it spends more of our money, then everything will be okay.

How stupid do they think we are?

It is about time that opposition politicians exposed this Labour dissembling for what it is really is, namely a last desperate attempt to cling onto power. All they have to do is ask Gordon Brown and the rest of the Labour administration one simple question, namely who is going to pay for the increase in public expenditure when your government has taken this country into the deepest debt in its history?

As our public debt increases by £20 billion every month, it is time that this government took full responsibility for its actions and started to balance its budget in the same way that many households across the country are having to do as a result of this recession.

If they do not, and continue to treat the public like children, then the future of this country’s economy doesn’t bear thinking about.

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