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A trillion and rising: Britain’s £1,000,000,000,000 debt means we now pay as much in interest as we do for defence
By Hugo Duncan
Last updated at 9:32 AM on 1st October 2010
Unprecedented levels of spending under Labour saw the Government borrow nearly £450million a day under Gordon Brown
Britain's debt has grown to a hitherto unimaginable level, it emerged yesterday – smashing the £1trillion barrier for the first time.
Government borrowing hit £1,000,389,000,000 at the end of March – or £40,000 per household – the Office for National Statistics said.
The figure is so enormous, equivalent to more than one million million pounds, that the country must pay £40billion interest on it in this year alone – roughly what is spent on the entire defence budget.
It follows unprecedented levels of spending under Labour which saw the Government borrow nearly £450million a day under Gordon Brown.
But the £1trillion figure does not include items such as the cost of public sector pensions and private finance initiatives.
Experts believe the true debt, including these hidden items, is between £4trillion and £5trillion.
Government borrowing was around £400billion when Labour came to power in 1997 and has more than doubled in the past five years. The ONS said the Government borrowed £159.8billion last year alone – a record 11.4 per cent of the UK’s entire economic output, or gross domestic product.
Emma Boon, of the TaxPayers’ Alliance, said: ‘The UK national debt has now reached a terrifying new landmark.
‘The number is now so large that it’s hard for most people to comprehend, but it is ordinary taxpayers that will be footing the bill.
More...
'This could bring Ireland down': 34bn euro bill for Anglo Irish Bank bail-out - more than country takes in tax in a year
‘This landmark figure comes at a time when the Government is talking about how to make huge savings, and is a reminder of just how necessary spending cuts are.’
Danny Alexander, Chief Secretary to the Treasury, said: ‘This puts into stark terms the scale of Britain’s debt mountain and is a timely reminder of why we need to tackle the deficit.
‘Right now we are paying £120million pounds a day in debt interest alone.
11.4% Deficit: The graph shows Government deficit as a percentage of GDP
‘The sooner we get the deficit down, the sooner we can get these payments under control. The longer we leave it, the more unfair it is on the vulnerable who suffer most when valuable taxpayers’ money has to be used to pay off interest.’
Britain’s state debt is now equivalent to 71.3 per cent of gross domestic product, the ONS said.
Danny Alexander, Chief Secretary to the Treasury: 'This puts into stark terms the scale of Britain’s debt mountain'
It is expected to hit £1.3trillion in the next five years – although this does not include hidden items such as the cost of public sector pensions.
European rules dictate that debt should not exceed 60 per cent of national income.
The ONS figures come three weeks ahead of the results of George Osborne’s comprehensive spending review.
The Chancellor plans to slash annual borrowing to £20billion by 2015/16 through tax rises and spending cuts which will see Whitehall budgets reduced by an average of 25 per cent.
Education and Defence are expected to suffer less harsh cuts of 10 to 20 per cent, meaning other departments could lose up to a third of their funding.
But despite these austerity measures, the overall level of debt will keep rising for years to come.
Critics claim that Mr Osborne’s cuts will tip the economy back into recession.
Unions warned that Britain will suffer a similar fate to Ireland, where the recovery came to an abrupt end in the spring as spending cuts took their toll.
Labour’s new leader Ed Miliband said the Coalition proposals were ‘reckless’.
He said he would put up taxes to protect public services from spending cuts.
But ministers insisted that not tackling the deficit would lead to a loss of confidence in Britain and lead to a Greek-style debt crisis.
David Cameron said Mr Miliband’s refusal to face up to the problem was ‘completely betraying’ the national interest.
The Prime Minister said: ‘If you are trying to do this job properly it is not about being popular, it is about trying to do what is right.’
By Hugo Duncan
Last updated at 9:32 AM on 1st October 2010
Unprecedented levels of spending under Labour saw the Government borrow nearly £450million a day under Gordon Brown
Britain's debt has grown to a hitherto unimaginable level, it emerged yesterday – smashing the £1trillion barrier for the first time.
Government borrowing hit £1,000,389,000,000 at the end of March – or £40,000 per household – the Office for National Statistics said.
The figure is so enormous, equivalent to more than one million million pounds, that the country must pay £40billion interest on it in this year alone – roughly what is spent on the entire defence budget.
It follows unprecedented levels of spending under Labour which saw the Government borrow nearly £450million a day under Gordon Brown.
But the £1trillion figure does not include items such as the cost of public sector pensions and private finance initiatives.
Experts believe the true debt, including these hidden items, is between £4trillion and £5trillion.
Government borrowing was around £400billion when Labour came to power in 1997 and has more than doubled in the past five years. The ONS said the Government borrowed £159.8billion last year alone – a record 11.4 per cent of the UK’s entire economic output, or gross domestic product.
Emma Boon, of the TaxPayers’ Alliance, said: ‘The UK national debt has now reached a terrifying new landmark.
‘The number is now so large that it’s hard for most people to comprehend, but it is ordinary taxpayers that will be footing the bill.
More...
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- £1,000,000,000,000 in the red: A trillion and rising - Britain’s debt means we now pay as much in interest as we do for defence
- Will Irish economic meltdown hit UK's fragile recovery? Country faces 34bn euro bill for bank bail-out
‘This landmark figure comes at a time when the Government is talking about how to make huge savings, and is a reminder of just how necessary spending cuts are.’
Danny Alexander, Chief Secretary to the Treasury, said: ‘This puts into stark terms the scale of Britain’s debt mountain and is a timely reminder of why we need to tackle the deficit.
‘Right now we are paying £120million pounds a day in debt interest alone.
11.4% Deficit: The graph shows Government deficit as a percentage of GDP
‘The sooner we get the deficit down, the sooner we can get these payments under control. The longer we leave it, the more unfair it is on the vulnerable who suffer most when valuable taxpayers’ money has to be used to pay off interest.’
Britain’s state debt is now equivalent to 71.3 per cent of gross domestic product, the ONS said.
Danny Alexander, Chief Secretary to the Treasury: 'This puts into stark terms the scale of Britain’s debt mountain'
It is expected to hit £1.3trillion in the next five years – although this does not include hidden items such as the cost of public sector pensions.
European rules dictate that debt should not exceed 60 per cent of national income.
The ONS figures come three weeks ahead of the results of George Osborne’s comprehensive spending review.
The Chancellor plans to slash annual borrowing to £20billion by 2015/16 through tax rises and spending cuts which will see Whitehall budgets reduced by an average of 25 per cent.
Education and Defence are expected to suffer less harsh cuts of 10 to 20 per cent, meaning other departments could lose up to a third of their funding.
But despite these austerity measures, the overall level of debt will keep rising for years to come.
Critics claim that Mr Osborne’s cuts will tip the economy back into recession.
Unions warned that Britain will suffer a similar fate to Ireland, where the recovery came to an abrupt end in the spring as spending cuts took their toll.
Labour’s new leader Ed Miliband said the Coalition proposals were ‘reckless’.
He said he would put up taxes to protect public services from spending cuts.
But ministers insisted that not tackling the deficit would lead to a loss of confidence in Britain and lead to a Greek-style debt crisis.
David Cameron said Mr Miliband’s refusal to face up to the problem was ‘completely betraying’ the national interest.
The Prime Minister said: ‘If you are trying to do this job properly it is not about being popular, it is about trying to do what is right.’
