By Charlie Elphicke
This year, the Government will borrow at least £180 billion. Over the next two years, the Government plans to borrow £360 billion. By 2013, if things carry on as they are, the national debt will be £560 billion over the 40% of GDP level that the IMF says is sensible. These numbers are so big they lose all meaning. They might as well be telephone numbers to most people.
So here I attempt to set out how large these numbers are in terms we can all understand.
With the amount the Government is borrowing this year, you could:
- Build an Emirates Stadium in every town in the UK;
- Feed every household in the UK for nearly three years; or
- Build a new secondary school, new primary school and a new hospital in every town in the UK and still have money left over.
With the amount being borrowed over the next two years, you could:
- Replace every car in the country with a brand new car;
- Renovate every kitchen and bathroom in the country;
- Pay the mortgage / rent and all the bills for every household in the country for two years; or
- Clothe every person in the land for 12 years.
And to pay down £560 billion? That would cost every household £5,000 a year over four and a half years.
Labour got us into this mess by running deficit budgets and increasing borrowing in the good times, leaving nothing for the bad times. Yet how could a Conservative Government get us out of the mire and turn things around? A key priority must be to close the Budget deficit. At 13% it's much greater than elsewhere and unsustainable. It's not practical simply to cut spending by the £100 billion a year off the bat as some hawks would wish. Public services are important to the new Conservative Party - and that includes the NHS.
Certainly tough decisions will have to be made, but the rebalancing will take time. That rebalancing will be focused on getting "more for less" - in other words less emphasis on money in and more on outcomes and productivity.
All this explains why it may be difficult to avoid short term tax rises to shore up the public finances, just as taxes had to be raised in 1979. And why David Cameron has refused to rule out short term tax rises, even though he's made it clear that unaffordable public spending will have to bear the lion's share in the age of austerity.
This is difficult for all of us who believe so strongly in tax cuts, yet things are so bad it will be hard to avoid. As the country moves into recovery, tax receipts should improve enabling taxes to be reduced. As public services are rebalanced, it should become possible to run a budget surplus and we should be able to start to pay down debt.
It's easy enough to write about what needs to happen, but we all know it will be very painful in practice. This is why, if we are elected to power, we must never let people forget how Labour has wrecked things for everyone: that they have mortgaged our kids’ futures; that it is their reckless, unsustainable, spending that has left no option but to take difficult decisions on public spending; and that all this debt and their economic incompetence in the good times has left such a huge hangover that the recovery will be slow; that we were still plumbing the depths of recession when Germany, France and Japan had moved back into growth; that they have harmed the chances of getting a job or a pay rise for millions of our countrymen - and most criminally of all have shattered the hopes and dreams of millions of our young people who simply cannot find a job at all.
This is also why people are dead wrong to say we are being handed a poisoned chalice - it's tragic that we find Britain where she is today, we hate it and wish things were not they way they are; yet we are also being handed a rare opportunity to turn things around, prescribe the antidote and bring greatness back to our land.
