UK National Debt

The UK national debt is the total amount of money the British government owes to the private sector and other purchasers of UK gilts.

  • At the end of June 2014, public sector net debt (excluding financial interventions (PSND ex) was £1,304.6 billion, equivalent to 77.3% of gross domestic product.
  • Source: ONS [1. ONS public sector finances ] [This figure excludes temporary effects of financial interventions (PSND ex) (page updated Aug 12th 2014)

public-sector-debt-ons

Annual Borrowing

  • For the financial year 2013/14, Public Sector Net Borrowing PSNB ex was £93.7 billion  - (5.6% of GDP)
  • The central government net cash requirement (CGNCR) for the financial year 2013/14 was £75.4 billion, £29.6 billion lower than the same period in 2012/13 (£105.0 billion). This figure is lower than PSNB ex because it includes one off receipts, e.g. Royal Mail transfer.

borrowing-percent-gdp-exclude-royal-mail

Office for Budget Responsibility

As well as ONS, the Office for Budget Responsibility is a good source for data.

Latest statistics at OBR

 

Recent History of UK National Debt

After a period of financial restraint, from mid 1990s, public sector debt at a % of GDP fell to 29% of GDP by 2002. From 2002 - 2007 , national debt  increased to 37 % of GDP. This increase in debt levels occurred  despite the long period of economic expansion; it was primarily due to the government's decision to increase spending on health and education (see: Gov't spending in this period). There has also been a marked rise in social security spending.

Since 2008, public sector debt has increased sharply because of:

  • 2008-13 recession (lower tax receipts, higher spending on unemployment benefits) The recession particularly hit stamp duty (falling house prices) income tax and lower corporation tax.
  • These cyclical factors have also exposed an underlying structural deficit. (deficit caused by spending greater than tax, ignoring cyclical factors)
  • Financial bailout of Northern Rock, RBS, Lloyds and other banks.

Comparison With Other Countries

Although 77% of GDP is a lot, it is worth bearing in mind that other countries have a much bigger problem. Japan for example has a National debt of 225%, Italy is over 100%.  The US national debt is close to 75% of GDP. [See other countries debt]. Also the UK has had much higher national debt in the past, e.g. in the late 1940s, UK debt  was over 180% of GDP. Nevertheless, there are reasons why the UK couldn’t borrow the same sums that we did post-war.

History of National Debt

UK National Debt since 1900.

UK national debt

See also: Historical National debt

National Debt since 1922. Source: HM Treasury and UK Public Spending [1]

These graphs show that government debt as a % of GDP has been much higher in the past. Notably in the aftermath of the two world wars. This suggests that UK debt is manageable compared to the early 1950s. (note, even with a national debt of 200% of GDP in early 1950s, UK avoided default and even managed to set up the Welfare State and NHS. However, in the current climate, the UK wouldn’t be able to borrow the same as in the past.  For example, private sector saving is lower, and the US wouldn’t give us big loan like in the 1950s.

Debt and Bond Yields


Bond yields reflect the cost of borrowing. Lower bond yields reduce the cost of government borrowing.

government-borrowing-bond-yields

Since 2007, UK bond yields have fallen. Countries in the Eurozone with similar debt levels have seen a sharp rise in bond yields putting greater pressure on their government to cut spending quickly. However, being outside the Euro with an independent Central Bank (willing to act as lender of last resort to the government) means markets don’t fear a liquidity crisis in the UK;  Euro members who don’t have a Central Bank willing to buy bonds during a liquidity crisis have been more at risk to rising bond yields and fears over government debt.

See also: Bond yields on European debt | (reasons for falling UK bond yields)

Cost of Interest Payments on National Debt

uk-debt-interest-payments-total

The cost of National debt is the interest the government has to pay on the bonds and gilts it sells. In 2011/12, the debt interest payments on UK debt are anticipated to be £48.6 bn (3% of GDP). This is a sharp increase from two years ago, but still quite manageable.  See also: UK Debt interest payments

As a % of GDP, debt interest payments are relatively low.

debt-interest-payments-percent-gdo

In 1985-86, debt interest payments reached 4.5% of GDP

 

How to reduce the debt to GDP ratio?

  • Economic expansion which improves tax revenues and reduces spending on benefits like Job Seekers Allowance. The economic slowdown which has occurred since 2010 has pushed the UK close to a triple dip recession and therefore the further squeeze on tax revenues has led to deficit reduction targets being missed.
  • Government spending cuts and tax increase (e.g. VAT) which improve public finances and deal with the structural deficit. The difficulty is the extent to which these  spending cuts could reduce economic growth and  hamper attempts to improve tax revenues. Some economists feel the timing of deficit consolidation is very important, and growth should come before fiscal consolidation.
  • See: practical solutions to reducing debt without harming growth

 

What is the Real Level of UK National Debt?

It is argued by some that  the UK’s national debt is actually a lot higher. This is because national debt should include pension contributions and private finance initiatives PFI which the government are obliged to pay.

The Centre for Policy Studies (at end of 2008) argues that the real national debt is actually £1,340 billion, which is 103.5 per cent of GDP. This figure includes all the public sector pension liabilities such as pensions, and private finance initiative contracts e.t.c (and Northern Rock liabilities).

  • However, these pension liabilities are not things the government are actually spending now. Therefore, there is no need to borrow for them yet. It is more of a guide to future public sector debt. I don’t accept the fact that future pension liabilities should be counted as public sector debt. In 2006, the Statistics Office did change calculations to include some PFI into public sector debt figures [pdf - Treasury.gov.uk]
  • However, it is a sign that it will be difficult to improve finances in the future.

Another problem is that with the financial crisis, the government have added an extra £500bn of potential liabilities. Note: the Government has offered to back mortgage securities. They are unlikely to spend this money. But, in theory the government could be liable for extra debts of up to £500bn. If we include this bailout package as a contingent liability National debt would be well over 100% of GDP. However with a modest improvement in the bank sector, the necessity for these bailouts look unlikely, unless there is a very sharp deterioration in global finance markets – which is always possible.

Forecast for National Debt

  • Current forecasts for UK debt predict that the UK public sector debt to GDP ratio will peak at 79.9% in 2015/16. However, in the past few years, government forecasts have regularly been revised upwards due to poor growth and disappointing deficit reduction

Debt including financial sector intervention

UK debt

Potential Problems of National Debt

  1. Interest Payments. The cost of paying interest on the government’s debt is very high. In 2011 Debt interest payments will be £48 billion a year (est 3% of GDP). Public sector debt interest payments will be the 4th highest department after social security, health and education. Debt interest payments could rise close to £70bn given the forecast rise in national debt.
  2. Higher Taxes / lower spending in the future.
  3. Crowding out of private sector investment / spending.
  4. The structural deficit will only get worse as an ageing population places greater strain on the UK’s pension liabilities. (demographic time bomb)
  5. Potential negative impact on exchange rate (link)
  6. Potential of rising interest rates as markets become more reluctant to lend to the UK government.

However, Government Borrowing is not always as bad as people fear.

  • Borrowing in a recession helps to offset a rise in private sector saving. Government borrowing helps maintain aggregate demand and prevents a fall in spending.
  • In a liquidity trap and zero interest rates, governments can often borrow at very low rates for a long time (e.g. Japan and UK) This is because people want to save and buy government bonds.
  • Austerity measures (e.g. cutting spending and raising taxes) can lead to a decrease in economic growth and cause the deficit to remain the same % of GDP.  Austerity measures and the economy | Timing of austerity

Who Owns UK Debt?

The majority of UK debt used to be held by the UK private sector, in particular, UK insurance and pension funds. In recent years, the Bank of England has bought gilts taking its holding to 25% of UK public sector debt.

Overseas investors own about 30% of UK gilts.

holdings-gilts-sector

More at: who owns UK debt?

Total UK Debt – Government + Private

  • Another way to examine UK debt is to look at both government debt and private debt combined.
  • Total UK debt includes household sector debt, business sector debt, financial sector debt and government debt. This is over 500% of GDP.Total UK Debt

UK Budget Deficit

The UK budget deficit is the annual borrowing requirement. It is measured by public sector net borrowing.

government-net-borrowing-2000-15

More on the annual budget deficit

Private sector savings

gross-saving

When considering government borrowing, it is important to place it in context. From 2007 to 2012, we have seen a sharp rise in private sector saving (UK savings ratio). The private sector have been seeking to reduce their debt levels and increase savings (e.g. buying government bonds). This increase in savings led to a sharp fall in private sector spending and investment. The increase in government borrowing is making use of this steep increase in private sector savings and helping to offset the fall in AD. see: Private and public sector borrowing

 

Government spending

govt-spending-94-12

More statistics on UK government spending

Other Countries Debt

See also:

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287 Responses to UK National Debt

  1. Hunter 11 June 11, 2008 at 1:04 pm #

    I would like to say thank you for the revision guide they have been a great help in simplifying economics.. i have been looking for something like this for two years and finally found it a month before my exam.. life saver.

  2. Simon Lomax July 22, 2008 at 4:07 pm #

    The interest is paid i presume, to the bank of england that lends the money to our government. If this is correct and i’m sure that it is, why have successive governments(this is a rhetorical question by the way) allowed our currency to be controlled by private banking elites without as much as admitting this to the public and asking for the support to fight and win back control over the currency. Much like the american presidents andrew jackson and abraham lincoln did.Forget the big brother control grid, at least for now because the banking system IS the biggest tyranny we face today.

  3. S green October 21, 2008 at 3:29 pm #

    I understand that the UK national debt is 1.6 trillion maybe to rise to 2 trillion. Is this correct? and to whom do we owe all of this

  4. Frodo October 23, 2008 at 4:55 pm #

    why is our currancy falling due to the fact that we owe 700 billion in national debt ??, the USA has accumilated over 59 trillion dollars of goverment liabilities (thats 500,000 + per every single household) and yet the US dollar is stable ??????????????????

  5. John Johnston November 10, 2008 at 8:24 am #

    The top civilized governments of this world are ALL in
    big DEBT problems. The G8 should meet to revise the
    old system using john maynard keynes and britton woods agreement or post WWII to rebuild the govs of
    Europe and devote 50% of the World Bank and Internatl
    Monetary Funds Projects to G8 gov needs currently or
    stop giving it ALL away to fourth and fifth world govs.
    Projects undone by USA,UK,France,Russia,Germany,Japan,China,Canada,Spain,Italy,Iraq,Mexico,Poland and probably six more majors
    should now be invested into by offshore bank trading regimes with Billion Dollar Tranches to aid NOW developing countrys as well. Their treasurys can’t fund
    their negleted hospitals,welfare issues,roads,school
    buildings,new sources of energy,new hybrid autos,global warming filters for coal and fossel fuels
    power plants etc. THEN OUR GOVS can concentrate on
    paying off our debts EARLIER and the dollar should soar
    as the ORIGINAL BENCHMARK as intended by Britton
    Woods and top 25 Bank Trading Programs. Please check
    boulat.com for more specific info on these programs and
    how they work. Thanks very much. Also…concerning our
    G8 taxes which is a thorny issue of course…our govs should invest in tranches to the Worldwide Bank Trading
    Programs run by the US Fed Reserve and major world
    banks and the IMF and World Bank so that the original
    one dollar of revenue in our treasury would summate
    at the end of one year to 10 up to 15 dollars return on
    TAX INVESTED FUNDS to help pay off Treasury Issues
    of our mutual World Govs. Make your money on the
    ten year advancing dollar against lesser currencys while
    your “tax man” is at it HUH? Keep doing that until we
    ALL RISE ABOVE THIS DEBT DEBACLE…HURRAH! Thanks
    from J Johnston…PS The Isle of Man, Gibraltar and the
    Isle of Curacao have banks to help us do this today!

    • Morris Chung August 8, 2014 at 7:13 am #

      Bretton woods John.

  6. matt January 2, 2009 at 1:04 am #

    the usa in answer to your question are stable as it is due to the trade of oil being in dollars. as soon as new technology for energy or the change in the currency used for oil happens, the usa will crumble unless they sort out the debt.

  7. matt January 2, 2009 at 1:06 am #

    and john thats interesting but i for certain would not trust the US feds with my money, let alone the worlds

  8. Raymond January 29, 2009 at 8:48 pm #

    Re comment #2 by Simon Lomax: “The interest is paid i presume, to the bank of england that lends the money to our government. If this is correct and i’m sure that it is, why have successive governments(this is a rhetorical question by the way) allowed our currency to be controlled by private banking elites without as much as admitting this to the public and asking for the support to fight and win back control over the currency. Much like the american presidents andrew jackson and abraham lincoln did.Forget the big brother control grid, at least for now because the banking system IS the biggest tyranny we face today.” – Simon raises an important question which nobody seems to clarify. Is it true that citizens are paying huge interest payments to private bankers on “loaned money” which has been created out of nothing? If so, why don’t we nationalise the national debt, and pay it off with the amounts that apparently are being paid to private bankers?

    • monty11 June 22, 2014 at 11:09 pm #

      its the biggest scam in history and something our politicians will never talk about, why? because they are controlled by the Rothschilds controlled bank of england.
      private bankers lending our government money and we the people paying it back with our taxes! no wonder the aristocracy in this country laugh at us!

  9. Yusuf Husein February 16, 2009 at 1:54 am #

    If we get interest rates to stay at zero percent, this will greatly enhance the servicing of national debt. For instance we woudl completely avoid £30b+ in interest for 2009

    It can be done as Japan has had zero interest adn USA is close to it already. Everybody benefits excepts savers ( and they can find smarter ways of investing ).

  10. Tosso February 20, 2009 at 1:17 pm #

    Can you explain the difference between gross and net national debt?

  11. Alan February 21, 2009 at 1:05 pm #

    We should go to 0% interest as the country in the long run will only benefit and we will become a stronger and better financial force in the long run.

  12. Debt Management Tips April 14, 2009 at 7:51 pm #

    In my opinion, irresponsible lending, combined with over materialistic spending has contributed to this huge problem we see right now. Those graphs are very telling of the state of public excess.

    Luckily the FSA are going to start heavily regulating the lenders to help get the economy out of this hole.

  13. Credit Claims May 14, 2009 at 8:07 pm #

    @Yusuf Husein – I completely agree, interest rates should be reduced, it may help to stabilise some of our more volatile industries.

    @Debt Management Tips – It is funny you should bring up this point, I had a conversation with a friend today about the whole Irresponsible Lending vs Consumer Overspend debate and in the end we both agreed that on the whole it was the lenders responsibility to ensure that credit and credit limits were appropriate.

    I’m glad the FSA are going to step in and place some restrictions on lenders. There are so many rogue firms out there being irresponsible in their approach to lending.

    The company “Brighthouse” in the news right now is a perfect example of a company that should not be allowed to operate.

  14. alphadebt June 8, 2009 at 7:10 pm #

    Interesting article, just shows what a mess our current financial situation really is.

  15. ade June 10, 2009 at 11:15 pm #

    All very interesting. Although I’m not sure what bonds, gilts and treasury bills actually represent. Are they the UK’s potential GDP that will be earned in the future? – i.e. the potential to pay back the debt. Is there some sort of guarantee, or do lenders just give over their money with an element of risk? Also, how by selling bonds, gilts etc and increasing money supply, and further increasing it by then applying fractional-reserve banking on this new money, is inflation unavoidable, and that an increase in National Output is the only realistic factor (in the equation MV=PY) that will limit inflation and more importantly pay the original loan and the interest? How is the interest paid without borrowing more money? How did the UK decrease debt in the past?

  16. Richard Lawson July 7, 2009 at 11:23 am #

    I read recently (Money Matters, Alastair Sawday publishing 2009) that we are still paying for the ransom of Richard the Lionheart (1157-1199). Can anyone here refute this allegation?

  17. Judith July 8, 2009 at 9:50 pm #

    The national debt is going beyond a joke even worse google is owned by someone in america and its the biggest shopping window i the world and they are putting all the .coms above uk businesses, why google why?

  18. Ed August 19, 2009 at 7:57 pm #

    In answer to the questions answering who the government pays interest to…

    The government issues government bonds or guilt edged stock which normally pays a fixed percentage of the value of the bond each year to the bond owner. The person who buys the bond gives the government the face value of the bond and in return the government gives the bondholder the fixed percentage of the face value each year until it buys the bond back which normally only occurs with fixed term bonds (eg. 5, 10, 25, 50, 100 etc year bonds although I don’t know if we still issue them).

    I hope this helps….

  19. smith September 2, 2009 at 11:05 am #

    people have to know that what is the yearly condition for debt of national sector and private sector. Here i am thankful for sharing helpful information.

  20. Ralph Musgrave September 16, 2009 at 11:27 am #

    The email you sent out on 15/16th Sept 2009 on the subject of government borrowing says “The irony is that many people in the UK who have private pensions indirectly have lent money to the government”. Too right. I would go a lot further: I suggest that behind this “irony” there is hornets’ nest, as follows.

    Governments borrow to a large extent because the politicians in charge think they can make themselves popular by sparing voters the pain of additional tax. But as you rightly point out, this policy simply results in voters lending instead of paying taxes. The reduced personal consumption by voters is pretty much the same in each case.

    Incidentally, this is a classic example of one of the most common mistakes in economics: the mistake of assuming that micro economic laws work at the macroeconomic level. To illustrate, if I PERSONALLY borrow to buy a new car, I can delay the pain of working and saving in order to get the cash to buy the car. But this does not work at the macro economic level.

    I’ve actually set up a blog, which claims that government borrowing is largely a farce. I dont think there should be NO government borrowing, because if governments and/or central banks can alter interest rates and the total amount they borrow, this is a useful regulatory tool. See: http://govtdebt.blogspot.com/

  21. Warneford September 21, 2009 at 11:34 am #

    What appears tragic from this is that Britain’s cultural history can be read off from the 1900 – 2000 PSBR debt burden chart from the Bank of England above.

    The chart’s peaks of PSBR above 100% of GDP mirror exactly the historical periods of social misery which George Orwell documented during the 1920s, 1930s and 1940s, with Britain characterised as a land of rootless tramps and unemployed all reliant on piecemeal charity, low paid jobs and money-lenders, a nation which even Orwell himself could not envisage having a universal welfare state.

    Our collective memories of this poverty finally begin to lift around 1965 and Beatlemania, a time exactly co-inciding with PSBR finally falling below 100% of GDP.

    It looks like our nation’s all too brief summer of credit looks set to end and the Orwellian social conditions and dismantled welfare state look set to return.

  22. Ralph Musgrave September 22, 2009 at 10:40 am #

    I’d like to querie the above first para: “The UK national debt is the total amount of money the British government owes to the private sector.”

    According to a “City Wire” site, nearly all the increased so called “national debt” in recent months is debt owed by the government to the Bank Of England (on account of the latter’s generous decision to print loads of money and give it to government). This so called “debt” (owed effectively by one government entity to another) is not a debt in any normal meaning of the word.

    See the following City Wire site, second graph or “bar chart” and the para just above it: http://www.citywire.co.uk/personal/-/news/money-property-and-tax/content.aspx?ID=352818

  23. tejvan September 24, 2009 at 8:10 am #

    thanks Ralph, Yes, in recent months things have been changing quite significantly. I will update post

  24. Money Stand October 1, 2009 at 6:33 pm #

    What an insight into the nation debt. Great article, so informative and thanks for covering this.

  25. Tim May November 5, 2009 at 4:36 pm #

    Thank you for this article, it is are to find this kind of info in such an easy to read format.

    I have one question however, who is all this money owed to? Who is so rich that they can lend countries so much money?

  26. Shamith Kunder November 15, 2009 at 1:28 pm #

    It the Banking system that has failed because of very loose lending system. Instead of excessive borrowing and provide the stimulus. The government should directly control most of the Bank and public sector unit , create more employment. The government should also put a cap on the exposure on all public fund i.e, the safeguard the pension fund. Instead of talking of liberalisation, its time to talk about protectionism.

  27. martyn November 24, 2009 at 7:31 pm #

    too late for protectionism, we are now in a world of globalisation, most of our labour workforce has shifted to India and China, its fine showing debt as a percentage of GDP, look at the GDP after the war and look at it now, huge difference.here in the UK we have had 10 years of plenty, why didnt we save for the lean times ?only today it was revealed the bank of England lent 61 billion to HSBOS and RBS (behind closed doors). i tend to go with conspiry theorists when it comes to money, google
    zeitgeist addendum

  28. Spike December 1, 2009 at 8:35 pm #

    I agree with Martyn above,… massive debt is bad enough but when quantified against GDP it is even more horrific! What do we produce??? Some oil, about to run out, aviation,..given away to EU and the world (Frank Whittle), some military,…. Most money is generated by the city looking after global finance, and what happens when the bubble bursts on global markets (Japan about to pop)? Game over, thats what! Build that wind turbine and get diggin the veggies baby, Mad Max here we come!!

  29. Red December 6, 2009 at 5:53 pm #

    Blah it’s ok – just blame the disabled and unemployed – scroungers!!!

    All those loverly houses and smart cars and fashionable attire and 2 foreign holidays you all supposedly ‘worked hard for’ in jobs that actually only cost the nation money as opposed to earning it any and at a rate of anything from 5 times as much to 1000′s of times as much as the unemployed are scrounging in order to exist in this looney system we all call capitalism? Millions of pounds bonuses for running our monetary system into the ground?? Millions of pounds for politicians that have never sucessfully resolved any issue and if you look have actually caused more international resentment and competetive rivalry than all the fascists put together.
    Then you spend millions to send our soldiers to go force this nightmare on other unsuspecting countries saying how great and fair it is?? Its a free for all grab a wad to any who have acquired the means to do come and ‘have some!!’ imigrants with dosh acquired in the same manner from even more impoverished populations welcomed too – We been a good cash cow for generations, come get some and then do it to your indigenous population just like we do!! When it gets a bit unruly we can start another world war and duck the conscription like last time.
    Bring lots of problematic refugees from all over the world and flood the stable society – gives them at the bottom something else to worry about instead of watching us mugging the national income with ever complicated – but legal – systems and techniques – oh and whilst we send some of them terrrible unemployed people who worked on the side trying to calve out of this ‘overfull’ system, an income for themselves and their family – we will dip into the expenses system for a mortgage we dont have and havent had for nearly 2 yrs at a tune of £40,000.
    All this we never would have known about if someone hadnt spilled the beans in protest at our lack of ability to supply our soldiers in harms way with proper and adequate life saving equipment. This isnt Grt Britain or England the land of angels – this is a land of foreigners and cash grabers who have no interest to work for it’s preservation cos they never knew it as what it was,
    We’ve been Hijacked!!

  30. simon lomax December 11, 2009 at 1:00 pm #

    what are the security for these guilts or bonds that the government exchange for the currency?

  31. angus December 21, 2009 at 7:56 pm #

    Isn’t the problem that the younger generation have had their future wealth largely taken by the older generation? It may have happend by mistake but in any event longer life expectancies and high pension entitlements are a time bomb for the futre, aren’t they? There is an article discussing the subject at http://www.recession.vo.uk.

  32. Midas December 23, 2009 at 2:04 am #

    Red you are spot on, The Goverment should print the money then we would have no interest to pay on the debt. The goverment should abolish fractional banking. Let the Banks that have Lost money go bankrupt. Banks are Just leaches keeping us all as slaves. Get ready for hyper inflation, higher taxes. No doubt they will do something to are currency, join the Euro so that they can make it even more worthless . After all that to keep the majority of people in the dark ,we as a nation will go to war. This is all been engineered by the Banks. Dont forget wealth is not lost, just transfered.

  33. Thomas January 18, 2010 at 3:00 pm #

    US Government debt is approaching 100% and will breach 100% of GDP by 2010 or 2011 adding over 1 trillion dollars of debt yearly. Interest payments alone are 500 billion yearly and rising.
    America has not invested in each infrustructure, educating it’s workforce, Environmental Standards and Sustainable developement,etc. It has spent huge sums of money on Military adventures, Police-Prison Industrial Complex, Homeland Security, CIA, NSA, FBI, ATF, etc,etc which are basically aimed at controlling US Citizens under a Dictatorship.
    While it has given trillions of Dollars to banks and other Corporations and most of all the Federal Reserve.
    On Top of this most of the debt or a good portion is owed to Europe and Asia while Countries like Japan have invested in INfrastructure, education, etc and owe the money to themselves! A big difference!!!!!
    Japan and Germany for Example are large Creditor Nations because they have large Export Industries and Services which Create Great wealth for these countries, the average Citizen Saves money or invests it while keeping a 15% savings rate which allows Japan or Germany to Borrow Money from their own people because the People along with the Country and Corporations based in these countries have huge sums of wealth which is not the case for a country like the USA who has a huge current account deficit, it’s citizens do not save and are deep in debt, the Companies are deep in debt so when it comes time for the US Government to borrow they increasingly borrow from other countries with the profits going overseas and giving these countries political leverage and economic leverage over the USA or any other country that is in this same game like the UK.
    This is not mentioned but Japan has a large Government debt and Germany has a lessor Government debt but they are huge Current Account Nations with high savings rates and most the their Corporations have large pools of cash on hand. These countries also invest back into their country unlike the USA.
    Why does the press not pick up on these facts?
    Could the Press also be owned by the Germany and Japanese-Oh I forgot in America the Newsprint and Books are mostly owned by German Multinational Companies! And a large chuck of American Assets overall are owned by a few Creditor Nations so try to report on the truth-If your not already bought up !!!

  34. marvaloves February 4, 2010 at 8:12 pm #

    a £100 economy is made it borrows this £100 at say 5% interest or £5.00
    value of economy = £100 = peoples wages/goods bought and sold etc .. its activity
    who and how is the interest of £5 payed

  35. Jessy Jones February 8, 2010 at 1:54 am #

    Hiya basicly this recession is far from over there far more to come alot more. In 2011 the debt has to start to be paid back which has been put to one side for 2 years with full on borrowing and spending by the goverment labour. People dont relise in 2011 where going to be in for a rough time with the debt needing to start paying it back.

    Meaning higher taxes, Spending cuts, Cuts on services and far more things. Which will result in people having less money. Life will get harder and things will not run as they should be and things will be let go in to a state out of control making things go worse.

    I’ve watched this recession when it started to now wats happening. I dont trust anything you hear were coming out of recession its complete rubbish. All the jobs lost have not been replaced at all so this shows its alot of rubbish. If you cant replace those jobs lost with new ones it wont get any better.

    All the signs are clear to see and hear were in for a rought time and its time people woke up and relised this. You cant keep spending debt when you havn’t payed it back or saved a penny. Because there all in a bubble world and its going to hit them all.

    Best thing you can do stay clear of any debt and any borrowing after 2011 if you can avoid it. Because those are the people who are going to feel it big time and people on low incomes as well suffer to which is wrong.

  36. Ronald March 1, 2010 at 7:56 pm #

    Amazing that some people advocate the lowering interest rates to 0%. This did not help Japan at all with their banking crisis and one can even argue that hyper credit is the cause of the crisis we’re currently facing. You simply cannot lend and spend your way out of the crisis.

  37. martin March 8, 2010 at 3:33 am #

    which one the the taxes we pay
    is used to pay off the uk’s national debt??

  38. R. England April 3, 2010 at 8:01 am #

    How do people who are in debt, now expected to help pay for the national debt, and people not in debt help pay for national debt, I think we are going to be indebted to the Government to getting us all more in debt.

  39. StolenPrerogative April 27, 2010 at 5:13 pm #

    The worlds REAL terrorists are the big corps and bankers. The banks own YOU. They install our leaders, they shape foriegn policy !! If anyone thinks we are “civilised” think again. This is so much more important than economics alone !!! Someone asked above what is the security on gilts ? well is it not the fact that the goverment has 75 million people to tax in a multitude of different ways therefore giving 99% certainty they will honour the debt ? If the two party system looked like it was about to be overthrown by radical changes in the country do you think the Bank Of England would still be as keen to buy gilts ?

  40. paulhield April 28, 2010 at 8:10 am #

    “Negative impact on exchange rate”

    I presume you mean our currency will fall, to a lower more competetive level…. is the word “negative” the most appropriate to use as it implies this is a bad thing. Every economy has a natural equilibrium exchange rate, trying to manipulate this so as to enjoy the short term benefits of an overvalued currency, will in the long run be counter productive as jobs in internationally tradable occupations are lost.

  41. paulhield April 28, 2010 at 7:51 am #

    It seems we are forced to borrow since the top 1% have 17 times as much wealth as the other 99%. The wealth of our nation is created by the vast majority doing a good job, but being paid very little for it, we build roads, hospitals, schools, teach, nurse, deliver goods, still make stuff, cook food… But a few manage to put themselves in a position where they can cream off far more than they can consume, we can’t tax that excess profiteering because the rich will throw their toys out of the cot and go abroad, so government has to borrow the excess income of the top few and lend it back to all the public sector workers to keep providing the wealth they create. Borrowing is unsustainable, so now we are left with the grotesque problem of cutting public spending whilst there is an excess of skilled labour lying idle. Less people working means less wealth being created within the nation, that is not a rational outcome, but is an inevitable consequence of allowing a few to walk away with more than a reasonable share of the wealth we all help create.
    One way to regain some of the wealth that has been expropriated is to allow inflation to run ahead of interest rates by printing money. Whilst this would erode the value of cash held by savers, it would encourage holders of cash to find productive ways to protect their cash by buying investing in businesses whose value would be unaffected by inflation. For too long we have been dazzled in the headlights of right wing opposition to inflation, we must understand that low inflation (high real interest rates) serves the interests of the rich, whilst modest inflation with low real interest rates serves the interests of the rest of us trying to earn a reasonable living doing a worthwhile job.

  42. Philip April 28, 2010 at 9:13 am #

    WhAT IS THE NATIONAL UK DEBT PER PERSON?

  43. Collin May 2, 2010 at 1:43 pm #

    If it is the Bank of England we owe our debt to, then who owns the Bank of England?

    http://www.whatdotheyknow.com/request/bank_of_england_nominees_ltd
    http://forumnews.wordpress.com/about/bank-of-england-nominees/

    According to this other website our debt is spread amongst national and foreign institutions.
    http://www.debtbombshell.com/bond-market.htm

  44. Exile May 17, 2010 at 1:42 pm #

    It may be contrary to the zeitgeist to say so but the government got itself into trouble as much by lowering headline taxes as in actual increasing of spending (though it did plenty of that, mainly on capital projects however which are not recurrent costs – other than the PFI ones of course).
    Public spending as a %age of GDP in the 2000s was about the same as it was in the 60s, that is, in the 35-40% range – but in the 60s we had high taxes and thus were able to reduce the debt as a %age of GDP – with the assistance of a high inflation rate. In those days the top rate of tax was over 90% – in the US and the UK – and the standard rate was around 40%. Between 1960 and 1970 we were able to reduce our debt from 107% of GDP to 64%.
    The conventional wisdom has been – keep inflation and interest rates low and everything will be fine. Hmmm.
    The proposed Responsibility office is an interesting idea – but what will be its terms of reference? Will it be like Philip Snowden and go for a balanced budget even it that means all economic activity ceases? Or will it have targets for unemployment, inflation and so on?

  45. Bill Young May 24, 2010 at 1:30 pm #

    National debt is normally expressed as a percentage of GDP. Surely it would also be useful to express it as a percentage of public sector income?

  46. Neil Stansbury May 25, 2010 at 11:54 am #

    “The interest is paid i presume, to the bank of england that lends the money to our government”

    Alas wrong – it is paid to the banks that lent us the money via the international gilt market.

    The Bank of England has no money to lend to anyone, it merely uses the bond market to create “banking credit”, for which we pay interest to the bond holder/s for the privilege.

    The scary part is this money doesn’t actually exist, it is fabricated into existance on the back of our government’s “promise to pay”. So we effectively pay interest on money that doesn’t exist and was “printed” by a bank!

    I would suggest starting with video here:

    http://video.google.co.uk/videoplay?docid=-2550156453790090544#

  47. martyn May 25, 2010 at 5:00 pm #

    i dont know where you get the idea we have low taxation in the UK, just because we pay a lesser percentage under paye than we did in the 60′s doesnt mean we now pay less, vat wasnt around then for a start, cigarettes,spirits,road tax,petrol etc were all less taxed than they are now,
    we didnt have taxes on taxes like landfil tax back then neither, the labour gov spent money it didnt have like it was going out of fashion , because taxpayers werent being made to pay for it they didnt bother to question,
    now its time to pay back for the squander and people might start to realise you shouldnt buy lots of things on credit (especially PFI credit).

  48. ianrjeffery May 26, 2010 at 11:30 pm #

    Up to a dozen years or so ago refunds of pension fund surpluses were made to businesses and the Government was happy to collect tax of initially 10%, later increasing to 20%. This, I believe, was due to, 1) a higher proportion of employees paying in compared to pensioners, 2) the value of shares being higher. The businesses, (I have used, businesses as some were in the private other public and ex-public sector) had the excuse that, ‘they had to reduce the surplus, due to Inland Revenue rules.’ They could have paid higher benefits to the pensioners, or given the employees a contributions holiday. To me it was obvious that as many of the schemes had not been around for more than 40 years, there was going to be a time when the current employees were to be due the full pension, which they will now not receive. You never hear about the Government retuning the 10% or 20% tax or the businesses the balance, back to pension funds. All they say is that, ‘employees with have lower pension than they would expect ‘. I wonder why people do not save as much for pension as the Government would like.

  49. aries109 May 29, 2010 at 9:16 am #

    Why is ratio of government debt to GDP commonly used as a measure? The general public is much more familiar with the ratio of debt to income – a ratio of 3-4 has commonly been used as a guideline for mortgage borrowing. What is the ratio of current government debt to total tax/NI receipts?

  50. Riyad June 9, 2010 at 10:07 am #

    anyone knows where i could get datas for UK public sector net debt ?
    trying to find but can’t get anything ;(

  51. John Carlton June 11, 2010 at 10:24 pm #

    The country is in debt and most of the UK people are in debt – the country is facing spending cuts and every British Citizen faces extra tax on wages etc etc! Every where is doom and gloom!

    People need to look at what is really important in life!.. I owe £55,000 of unsecured debt and I’ve just entered into a Debt Management Plan – But I’m still the richest person I know as I have a loving wife and two fantastic kids. I’m in love and I’m happy – that makes me rich.

    My debt has come from buying materialist objects, and love and happiness is something money can not buy. This lesson in life cost me £55,000!

    So forget about debt and the control it has on the country and the people! Live for today!

  52. Jim June 28, 2010 at 9:01 am #

    If the interest on the National Debt is only 2.5% of GDP, why isn’t it being carried until better days rather than imposing cuts that will cause real human suffering e.g. freezing NHS budgets and taking money out of the economy thus helping put people out of work and onto welfare!

  53. Frederick W Gilling June 30, 2010 at 7:18 pm #

    Where can one see exactly to whom our National Debt is owed and what interest rates are payable?

  54. Luke July 8, 2010 at 2:08 am #

    Its quite shocking how much the UK owe’s the tories have screwed this country badly, the cuts will keep getting harder as times move on.

  55. billy July 14, 2010 at 3:35 pm #

    Some people do not realise that Brown Labour borrowed madly and left us paying about £50 BN a year interest. Labour government spent 1/3 more than it collected. They borrowed extra money to try to make whole regions depend on the State for jobs and welfare.

    That was all to make people vote Labour. The last thing Labour wants is prosperous thinking voters who run their own independent businesses, who want less tax and less State interference. Labour want more tax and more State interference, so they need the stupidest State officials who follow orders from Labour HQ.

    Keynes aimed to create surplus in tax during booms when Govt collects more than it spends, then use the surplus during recession. Mad Brown repeated ‘I ended boom and bust’. Probably the stupidest statement ever made. He loaded everyone with debts. He put each UK person into about £100,000 of debt!!

    He spent billions more than he collected during boom and hid £3.5 Trillion of borrowing and pension liability. So when bust came he borrowed even more.

    Now in reality the UK has near £5 Trillion of debts and pension liabilities. Brown and Labour cowards were too afraid, or too incompetent, or too venally corrupt to run UK the finances properly.

    They have left the UK in huge debt, interest paments more than almost all State services.

    Brown, Bliar, Mandy, Campbell, Beckett, Straw, Balls, Cooper, Milipede and co should all be tried for fraud and corruption. Then banned from public service and being a Director, fined and jailed for at least 20 years. They have left the UK in debt prison for far longer.

    • chris hindle March 21, 2013 at 5:11 pm #

      I imagine you are a Daily Mail or a Sun reader Where on earth do you get these ridiculous figures from ?
      No one could deny that Labour spent a fair bit of dosh. Of course after twenty years of Tory slash and burn there was lots to spend on. The NHS, new hospitals Health Centres Schools etc.
      Have a look at your historical graphs and you will see which governments are the spendthrifts (and why) In particular, have a look and see when the debt really started to grow Yes that’s right following the debacle of 2008.
      When un-regulated banks had a good laugh at us all

      The biggest mistake Brown made was to bail the banks out. In hindsight he should have let them go under.

      The banks have left us in debt!!! Have a look at the graph above for public sector debt including ‘Financial Services Intervention’

  56. Lee Gear July 27, 2010 at 11:19 am #

    So if the way the banking system works means most money is created by private banks(by ways of Fractional Reserve Banking), rather than by the state, this obviously has a wide range of destructive effects, include the high level of public, private and corporate debt, Third World debt, rising costs of living and falling living standards, and the recent financial crisis. Also the fact that Government borrows money at interest (by way of gilt edged securities etc).
    My question is this… Why does Government allow private banks to create money by way of loans, mortgages etc ie Fractional reserve Banking? Why does Government not create its own money, interest free (saving roughly 30 billion of tax payers money per year)? and why doesn’t Government just get rid of Fractional Reserve Banking all together?
    Surely it is possible for newly created money to enter the economy as a debt-free stimulus, rather than as debt.

  57. G Clark July 28, 2010 at 12:57 pm #

    Wow the figures are utterly overwhelming

  58. Rachael Donohoe July 28, 2010 at 12:58 pm #

    you wonder the way back from all this . . .

  59. Lawful Rebellion August 6, 2010 at 12:15 am #

    Watch Zeitgeist Addendum. It will explain everything. You should then research my name and participate. If not, vite UK.

  60. Lawful Rebellion August 6, 2010 at 12:16 am #

    Meant to say Vote UKIP :)

  61. financial spreadbetting August 8, 2010 at 12:07 pm #

    The problem with the ballooning debt won’t end soon. If you look at Japan they have been fighting deflation by ‘building bridges to nowhere’ and their debt is greater than 200% of their GDP.

  62. binaryoptionsweekly August 15, 2010 at 6:34 pm #

    This is not looking too good, may take more than a decade to get back in the black or something a little more reasonable.

  63. Eric August 20, 2010 at 11:06 am #

    well another this the U.K sucks at

  64. Stephen Davis August 24, 2010 at 3:37 pm #

    Can we have an end to the b******s that New Labour spent money like it was going out of fashion? If only! Don’t believe the c**p you read in the Daily Mail. In fact, New Labour kept up the same moneterist limitations in the economy (low wages, spending constraints on public spending) as the tories did.

    Hospitals and Schools were usually built under PFI agreements, which actually ended up costing the taxpayer more than if the state had built them itself.

    Wages and pensions never (repeat never) rose more than inflation. Spending on social housing was at an all time low. Spending on benefits, especially disability benefit were in for huge cuts. The minimum wage, now trumpeted as a major New Labour achievement, was resisted tooth and nail by both Blair and Brown. The minimum wage had to be forced through. At £5.80 an hour, it is obviously far too low to make any real impact on wage poverty.

    New Labour were spendthrift? You must be joking!!

  65. John Hocknull September 10, 2010 at 6:08 pm #

    As part of your foreign aid supply BR90 bridges to Papua New Guinea and the Solomon Islands. This will assist the maintanence of the highway system in PNG and also provide jobs in the UK. Don’t send money send items that are produced in the UK to keep British people employed.
    Assistance in construction of bridges and the employment of local labour will put money into the pockets of local people in PNG and not wasted in the administration of the aid.

  66. dave matthews September 12, 2010 at 3:03 pm #

    It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
    Henry Ford

  67. dave matthews September 12, 2010 at 3:03 pm #

    THE BANKERS MANIFESTO
    Congressman Charles A. Lindbergh, Sr. revealed the Bankers Manifesto of 1892 to the U.S. Congress somewhere between 1907 and 1917.
    We (the bankers) must proceed with caution and guard every move made, for the lower order of people are already showing signs of restless commotion. Prudence will therefore show a policy of apparently yielding to the popular will until our plans are so far consummated that we can declare our designs without fear of any organized resistance.

    Organizations in the United States should be carefully watched by our trusted men, and we must take immediate steps to control these organizations in our interest or disrupt them.

    At the coming Omaha convention to be held July 4, 1892, our men must attend and direct its movement or else there will be set on foot such antagonism to our designs as may require force to overcome.

    This at the present time would be premature. We are not yet ready for such a crisis. Capital must protect itself in every possible manner through combination (conspiracy) and legislation.

    The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.

    When, through the process of law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of the leading financiers.

    People without homes will not quarrel with their leaders. History repeats itself in regular cycles. This truth is well known among our principal men who are engaged in forming an imperialism of the world. While they are doing this, the people must be kept in a state of political antagonism.

    The question of tariff reform must be urged through the organization known as the Democratic Party, and the question of protection with the reciprocity must be forced to view through the Republican Party.

    By thus dividing voters, we can get them to expend their energies in fighting over questions of no importance to us, except as teachers to the common herd. Thus, by discrete actions, we can secure all that has been so generously planned and successfully accomplished.

  68. Alex September 14, 2010 at 4:20 pm #

    Wow these figures are an eye opener and a cause for concern

  69. Joe O'Donnell September 21, 2010 at 6:42 pm #

    Someone asked where does the Uk borrow money from
    The Answer : The IMF, where doe the IMF get its money’ eh from britain and othe wealthy countries, so we are paying interest on our own money?.
    Now here is where it gets crazy, The USA owe britain $111 Billion the USA also owe Brazil, India and Mexico,
    so why not get that back.
    So we loan the popcorn eating fatties $111 billion and then ve we loan back our own money and pay £3.4 billion interest a month for borrowing our own cash.

    Would you loan you neighbours your wages forcing you to borrow from your wife and pay your wife interest’ no .

    We elected the idiots’ so we deserve what we get.

    The war in Iraq was ” A liberation” then 3 weeks later it was a war, The credit crisis was a CASH FLOW problem then it became a debt, we bailed the banks out and bought their bad mortgage debts’ so where are all these properties’ what have we got for this debt.
    We as a nation are been fleeced and a lot of people are making a lot of money while the poor and disabled and schoolkids and pensioners pay the price.
    The Sting.

  70. richard gwalchmai September 22, 2010 at 10:02 pm #

    I believe that one of the best decisions that the goverment did was invest (buy shares) in the banks. RBS showed a profit of over 10 billion in just under 3 months “amazin” leaving the goverment with over 2 billion pounds profits in shares. thats more than they actully paid for the shares 41% of them in the first place, that should help a little towards the national debt and i believe this might be the future for most goverments to invest in the banking sector.

  71. James J Paton October 6, 2010 at 8:10 am #

    Just to get a little true perpsective on the debt. Can anyone tell me what the current debt is as a proportion to our total wealth as a nation?

    It strikes me that many statistics are banded about to create and maintain an environment of fear so that we all then think there is not alternative to the only cuts agenda being proposed by all the main political parties and all the media. a time to remember ‘The Emporers New Clothes fable, where all but a small boy were conned into believing a lie.

  72. Stephen Macdonald October 11, 2010 at 12:37 pm #

    I think that until people decide to stop taking out the loans,credit cards and mortgages that is offered by these banks then we will continue to have boom and bust because they offer it and we take it so the western world is stuck in a vicious circle.

  73. Extreme Options October 17, 2010 at 5:01 pm #

    That’s nuts. It’s going to take a while before the UK settles back into a healthy level of debt. The US is in even worse shape though!

  74. christopher gilfedder October 22, 2010 at 3:45 pm #

    Why would in government think it sensible to borrow money from private banks, owned by wealthy individuals, and then load an unbearable(and unrepayable) debt on to the country’s taxpayers.
    If a government can print and sell bonds as a means of raising money, surely it is infinitely more sensible to print its own money, with no debt attached, and to release this money into the economy.
    Of course, if a particular government tried to spend its way out of trouble by printing ludicrous sums of money the result would be inflation. But then we would all know that the government was solely to blame and could act accordingly, rather than have to utter impotent threats and protests at the unknown and unelected bankers.
    Why is the whole issue of private banks holding a country to ransom never mentioned, let alone discussed, in the media.

  75. Moyomongoose October 22, 2010 at 10:25 pm #

    You need not worry about “boom and bust” and “healthy level of debt” for very much longer. Economic experts in the U.S. are already predicting a total collapse of the world’s currencies. Money will be worthless. The billionairs will be no richer than a man with empty pockets and no wallet. After the collapse, money will not buy anything. Business will stop operating. Governments, infrastructures, schools and hospitals will shut down. Motor fuel will become unavailible. Have you ever watched an Austrialian movie staring Mel Gibson, “Road Wariors”? Watch the movie…It will give you some insight…Human nature being what it is with no means of order…Crime, terrorism and vigilanties out of control. Before it got that bad, this world’s governments will try to usher in a world order account and debit system to replace currency, making money obsolete. When this world system comes into being, AVOID IT LIKE THE PLAUGE! The book of Revelation warns about accepting that system in the last days that you can’t buy and sell without.
    It is better to not have a means to buy anything for seven years than to buy yourself a ticket to Hell for eternity. On that Judgement Day, God is not going to listen to, “But I had bills to pay!” or “I needed to buy groceries!” or “Did you expect me to give up my lavish lifestyle?!” The all except lavish lifestyle Hell has to offer will not be worth it. Don’t accept any electronic chip implants either.

  76. kathryn October 29, 2010 at 8:54 am #

    Where can I find a list of the organisations and people that are owed this money (the national debt) and details of interest charged.

  77. Herbert Barrs November 11, 2010 at 9:16 pm #

    #113 kathryn asks a vital question. Overall what % interest is the government paying on the national debt and how does that compare with what it pays to its citizens who invest in National Savings & Investments?
    Why not encourage more use of NSI ?

  78. Les Line November 13, 2010 at 3:22 pm #

    I am not an economics student, but am struggling to increase my understanding of economics. Can you help me with an answer to a question on the UK National Debt?

    I watched the recent Channel 4 (I think) programme on the National Debt. In this Programme it gave an all inclusive figure of £4.8 Trillion. How can this be squared with the very much lower figures given on your site?

    Many thanks (in anticipation)

    • Chris H March 23, 2013 at 3:52 pm #

      Les
      I’m sure you will not be too surprised to hear that an awful lot of the government’s borrowing is borrowing they would rather we didn’t know about
      (Borrowing to give to crooked banks for example)
      The true figure is £6.5 trillion which I gleaned from the CIA website (Google CIA – national debts) making us the third biggest debtors in the world – behind the EU and US
      (I’m sure they wouldn’t lie – would they?)

  79. Bud Ninja November 23, 2010 at 12:27 pm #

    solution
    64million plus change population
    £10 per head a week debt tax
    640000000 per week collected
    33280000000 per year

  80. Franco November 24, 2010 at 3:21 pm #

    This is who we owe money to….

    http://www.debtbombshell.com/bond-market.htm

  81. Ammo November 24, 2010 at 11:01 pm #

    Can someone point me in the right direction for some true accounting for the UK government? I would like to know if the debt cited for the UK government is a “true” debt….does it include the money we have lent to other countries. Does the 459.10 billion dollars we have lent to the USA become part of our debt or our assets? Does anyone have a comprehesive list of the UK’s borrowing and lending? All I can find is what the UK owes rather than what it has lent!! Any help happily recieved!

  82. steve chambers December 6, 2010 at 8:50 pm #

    Sorry but the people braught this about themselves. We borrow far to much and dont pay back.

  83. Bodger December 12, 2010 at 6:06 pm #

    4+ trillion is an ONS estimate:

    http://www.independent.co.uk/news/uk/politics/britainrsquos-debt-the-untold-story-2025979.html

  84. christopher gilfedder December 16, 2010 at 6:54 pm #

    Why no mention of taking steps to forbid the govenment to borrow huge sums of money from banks thus creating unbearable and unrepayable debt for the tax payer? Under the present system which allows banks to create money out of nothing (fractional reserve banking) governments are irresponsible and cowardly, and banks are greedy and parasitical.
    At present there is an independent commission on banking considering ways to avoid banks destroying the country’s economy. It is due to report back in September. Let’s hope it resists the banking lobby and refuses to tinker with the banking system, and , instead, genuinely re-forms the banking system so that it serves the interests of the nation rather than continues to pusue its blinkered and ruthless pursuit of money – and to hell with the rest of us!

  85. coach December 16, 2010 at 8:11 pm #

    Dr. Debt . . . Since 1996. DrDebt.com will keep you debt free !

  86. tolt January 3, 2011 at 11:47 pm #

    I run a small business in the private sector and I don’t have an economics background. But can someone please explain to me why the government is now so hell bent on making private sector pay for the mistakes made by the banks and indeed the government itself?

    I’ve heard plenty of people say that the reason the banks got into trouble was because they lent too much. I’m sure if anyone reading this runs a small business they will know that the UK’s banks have not been lending in any meaningful way to businesses for years.

    So as far as I can see it, the government is using the private sector to fund the ‘Old Boys’ club.

    Increasing taxes including VAT is like cutting your head off to cure a headache – have these people no real understanding of the world they so aimlessly blunder through leaving a trail of destruction that wrecks the lives of people who try to make a difference.

    If a business in the private sector makes a mistake, it pays for it. However if you run the country and screw things up – you make someone else pick up the cheque.

    The problem is that the way in which government is going about making the private sector pick up the cheque will in effect wipe thousands of companies and tens of thousands of jobs off the map.

    So when the private sector is bled dry to pay for this mistake, who will the government turn on next?

    Would a much more sensible solution to the crisis not be to encourage people to spend money and stimulate the economy. I’m not a rocket scientist, but raising taxes if people can’t afford to pay them is pointless. All it does is simply make the private sector responsible a foul up that was not our responsibility.

    Some more positive suggestions for bringing in cash to the Crown could include:
    1. Streamlining the public sector in an effective manner and that does not mean reducing the wages of those on the bottom rung. Reduce the wages of MPs. Reduce the amount of expenses these people have access to. Reduce the number of overlapping jobs in the sector and pointless jobs. Make the public sector accountable, we all know as a business structure it’s simply not viable.

    2. Look seriously at the numbers of longterm unemployed. Yes many people are truthfully unable to work, but I’m sure anyone reading this will know or have seen plenty of people who just don’t want to work. It’s sad but it is true. There is a generation that has grown up that believes the State owes them a living and in turn it’s the private sector that has to pay the State.

    3. The so called investment groups in England, Scotland, Wales and Northern Ireland are such a waste of time. They waste millions every year on so called inward investment and in bringing overseas companies to the UK. I’ve seen these organisations personally waste millions of pounds on projects that have no hope of ever bringing a single job into the country.

    From many of the postings I’ve read on this site from people who seem to know a great deal about economics than me, it amazes me that our so called leaders are either so naive or so corrupt that they simply view strangling businesses in the private sector as the most effective way of improving the economy.

    I recently spoke with a number of other directors and everyone is saying the same thing. Britain is broke and no one is fixing it.

  87. mr campbell January 11, 2011 at 8:59 am #

    did you know that the nation debt is 4.5 TRILLION, yes I’ll say it again 4.5 TRILLION.
    The bank bail out is drop in the ocean, In comparison to what we owe.  Guy Fawkes where are you. We are proper fuc– most just don’t know it yet. when inflation rises and it will, the interest on the debt will rise to. looks like a few more wars are on the card. other wise start learning Mandarin. alternatively we could adopt the Hong Kong system. 

  88. Gross Financial Crisis January 17, 2011 at 2:10 pm #

    Really you have shared very nice information in a brief along with graphical presentation. It will be useful for many students especially those have taken commercial or management studies.

  89. LBee January 17, 2011 at 3:04 pm #

    To be honest, it shocks me when I read information on our economy like this – and moreover if the general public were actually aware of the mess we are potentially in then I think we’d have a riot on our hands!

  90. Moorhead Savage January 20, 2011 at 3:47 pm #

    I completely agree, there are some shocking statistics in these comments. How can the government possibly justify borrowing so much money and creating so much national debt. They can not preach about people learning to live within their means and not gathering debt when they can’t even do it themselves. I just don’t understand how the government is going to turn this financial situation around. People should be up in arms but I guess it’s all a little late now that the damage is done. It’s all about damage limitation and cutting services to save as much as possible.

  91. mike dillard February 9, 2011 at 8:19 am #

    It wont be much longer till every thing hits the fan and the world as we know it will be flipped upside down if were not paying attention so look oup

  92. john March 16, 2011 at 12:05 am #

    Hi, I am a novice to economics and after searching the web on the role of the Bank of Englands approach to quantitive easing wonder why the BofE don’t purchase guilts and bonds of the UK government in the same way the provide capital guarantees to Banks who do purchase UK guilts. As I understand, credit rating is the measure of your ability to pay back a debt – and is not based on on who the lender is. Why then can’t the BoE purchase a large proportion of the UK bonds issue and service the bond at the prevailing uk interest rates of 0.5% ? I understand bonds are issued face value and are sold at market rates to include a return deemed acceptable by the markets, why can’t governments sell prospective debt to the Bo E much as markets can sell debt and trade guilts ?Thanks, confused of Manchester

  93. nuig March 18, 2011 at 7:55 pm #

    Hi
    I am looking for historical gdp data from ireland.
    Any idea where can I find it?
    Thnaks
    Great blog here. Will be back again

  94. m.dot March 22, 2011 at 2:25 pm #

    i think the govermentshould not take any monye off of any 1 and get a real job them selves ant then they give us there money… see how they like it! im only 16 and this would is mest up befor imeaven in it

  95. dermal filler March 28, 2011 at 2:21 am #

    First saw this article, so, there are a lot of you don’t understand something. learned

  96. david April 9, 2011 at 7:44 pm #

    good

  97. Michael April 9, 2011 at 11:48 pm #

    Thanks a lot for this post, it was very useful.
    I was wondering if you had anything to say about Johann Hari’s recent comments on national debt, explained here
    http://johannhari.com/2011/03/29/the-biggest-lie-in-british-politics

  98. Livy April 11, 2011 at 12:33 pm #

    Hi, You know what. I feel sorry for the government. Years and years of carelessness spending by other parties to boost aggregate demand and economic growth has now met its disastrous fate, and the coalition has to ‘somehow’ solve all of this. I’m sorry I can see many people complaining on this blog about the spending cuts etc etc, but to be honest they were a long time coming.

  99. Rozer April 15, 2011 at 9:18 am #

    I can see many people complaining on this blog about the spending cuts etc etc, but to be honest they were a long time coming.

  100. Dr David Hill April 24, 2011 at 4:29 pm #

    The problem of reducing our national debt is totally handicapped by the mentality of economic and political thinking that ignores where the seeds of economic dynamism resides.

    In a mere twenty-year’s time to 2031, the UK and the EU will be reaching the limits of despair when trying to capture any major future foothold in the global economic stakes. This will not be due to its people, but their governments with regard to current and medium-term policies. These policies are inherently based in the old thinking that by joining universities and business together we can achieve economic dynamism in the future. It forgets that there are three crucial elements to achieve this – the ‘Ideas’ phase, the R&D phase and the corporate commercialization phase. I say forget, as the primer of this most important energiser for economic wealth creation, the ideas phase, is not taken serious and where it is the most important and fundamental missing factor. For without world changing ideas first the process cannot even begin. The British and EU system does not comprehend what the history of S&T tells us where up to 75% of all the inventions that have made the modern world what it is today, did not emanated within the confines of our universities or advanced corporate research centres of excellence, but in the minds of ‘independent’ innovators, far remote from the final two innovation elements that constitute the ‘innovation chain’. Indeed, the ‘independent’ ideas element is more-or-less nonexistent in UK and EU economic policy. This is unlike what is emerging in the East and where they are now starting to see that the ideas people are the most important commodity that a nation has. In twenty years time therefore with this lack of foresight and new thinking in Britain and the EU, we shall in reality just be hangers-on in the global economic stakes. Therefore for its own good, the United Kingdom and the EU have to start thinking ‘out of the box’ and give total prominence and resources to the initial ideas people. For if they do not we shall see in our own lifetime the inevitable collapse of living standards, the like of which we have shall never have seen before and where our offspring will live to be totally subservient to the economic might and power of the East. That is why it is so vitally important that we create now the innovative infrastructure throughout Europe for our ideas people to flourish and thereby equip our nations with the dynamic products and services that we shall dearly need. When will the UK and the EU realise this is the big question, for it has the most overriding repercussions and consequential economic effects that have never been seen before for the 500 million+ people of the European Union? We really have to start thinking ‘out-of-the-box’ like our Eastern counterparts before it is far too late to stem the economic decline that is now upon us all.

    Dr David Hill
    Executive Director
    World Innovation Foundation

  101. don May 7, 2011 at 3:51 pm #

    Given that we have bailed out some of our major banks. Why can we not sell off these assets to considerably ,or perhaps clear most of our debt?

  102. Tony May 10, 2011 at 5:12 pm #

    no solutions here, Uk in debt they deserve it, they are a bunch of crooks! they wouldn’t run a surplus if your kids lives depended on it, would they.

  103. raveeba May 17, 2011 at 1:26 am #

    with the recession of our finanical sector has been underminded in terms of america’s economic status. how do you mange to counter this counterevolutionary ideologies and sustain the climate of our society for our hedonistic society?

  104. katie May 30, 2011 at 8:17 pm #

    why cant we just printmore money to pay of the debt were in its not that hard to press a BUTTON and print out a few billion

  105. jalany June 1, 2011 at 6:50 am #

    katie, there are huge problems with that, including all the problems that go along with inflation and distrust from the global community. It would probably be a wiser choice to just file bankruptcy/default, at least then you only have to deal with the distrust from the global community.

  106. Online Estate Agent June 7, 2011 at 11:07 am #

    Its a tragedy that successive governments have let the UK get into this situation – it seems to me that every country is hugely in debt and its difficult to see how we truly stand, does anyone know of some stats on this – is see 35% of our debt is owned by foreign investors, but how much of other countries debt do we own?

    • Marc September 30, 2011 at 5:43 am #

      “Its a tragedy that successive governments have let the UK get into this situation”

      What is far more of a tragedy is that we let them.

  107. Thomas June 28, 2011 at 3:03 pm #

    People dont help,when in a tight corner they run plus we have sponger the world over here soaking the sytem and then have to pay the currupt gravy train eec.

  108. Matt July 1, 2011 at 10:48 am #

    Have read many of the these comments I do find most fundermentally flawed.
    For example : We seem to compare the UK fiscal debt policies of that to other countries like Japan.
    Yes indeed Japan has a large debt ratio that is high, however all of the debt is funded internally ie japanese nationals buy the Japanese bonds of the governement and these people are the main holders of these bonds.
    Therefore the japanese people are the main holders of these bonds.
    Also the japanese have the largest cash reserves in the world and also hold 300 trillion in reserves overseas infact they are the worlds largest creditor…
    The US is one of its largest debtors.
    Also the Japanese economy has a huge export advantage so their balance of payments is very strong.
    The UK however finances most of its debts form overseas investors and has has simply mis managed the fiscal strategies of the markets.
    The government has relied to heavily on borrowing maoney to stimilate the economy which is why the UK is in this awfull mess.
    The bankers of course have been reckless howver if the the cheif whip is saying here is the money and its cheap and its going to be cheap for a longtime.

    The debt levels of the UK are so dangerous that the UK governement is living in Denial.
    We have simply maxed out all our credit lines and now are borrowing more just to fund the interest payments on the debt.

    The Euro crisis will inevitably have a massive impact on the UK when I suspect German will leave the Euro as it can no longer go on funing the PIGS.
    This in effect will of course cause problems for the UK as Europe is our neighbour and the banks are highley exposed to the eurozone.
    Will there be more bank failures… Yes …
    Will the government be able to nationalise all the banks … Probally.

    What Impact will that have for the average joe…

    Well we would see a large rise in taxes and much further cuts to public spending we could even see the UK defaulting on its debts and turning to the IMF for help.

    Of course the current government do want to bring this up now as they are just putting plasters on a pipe which is springing leaks everywhere, how long can the plasters last before the pipe bursts…

    We have all read the story about the ANT and the Grasshopper when we were kids, well we can reflect that on the current global situation.

    The Ant and the Grasshopper.

    Once upon a time there was the Grasshopper who was a happy go luck positive creature that loved all the fun of the summer and lazying in the feild crazing on the lovely rippened wheat.

    One day he say the ant walking past carrying a heavy load and said ” why dont you come and join us and have some fun there is so much for everyone”. Dont be such a bore and relax.

    The Ant repesonded by saying ” are you crazy winter is just a few weeks away and you are lazing here we have been working all summer building our nests raising our young and saving our reserves for winter”.

    The grasshopper laughed and dismayed the ant as stupid. The ant carried on working so hard through the summer months carrying and working all day and all night as winter approached.

    The grasshoppers by now were so fat and had eaten most of the corn and the wheat.
    The Ants had stored up trillions in reserves and unbeknown to the grasshoppers the Generals of the grasshoppers had been borrowing the corn and the wheat from the ants so infact they owed the ants trillions.
    The ants warned the generals that they faced a huge problem but the grasshopper generals were fearful of a revolt from the grasshoppers.

    Winter arrived the temperatures dropped the 1st snowfall arrived the grasshoppers took shelter however there wasnt enough food to go around.
    The grasshoppers started to become weak and begged the ants for help and the ants kindly agreed based on certain conditions. That they work like ants and curtail there irrational behaviour with regards to the food supplies.
    The grasshoppers took the food supplies and engaged in yet another round of partying and lazing about thinking the ants would help them out.
    The ants were not happy about the way the grasshoppers where behaving and started to demand that the grasshoppers pay back the reserves to the ants.
    The Grasshoppers are unable to pay back so the ants apply interest the Grasshoppers borrow more until there credit lines are cut off eventually they are unable to pay back not even the interest payment.
    Eventually the ants call in the army ants who go into the nests of the grasshoppers and pull out all the reserves and relocate it somewhere else.

    The grasshoppers are weak and beging to die one by one.

    This is simply the out look for the UK…and other grasshopper economies.

    • Simon October 18, 2011 at 11:25 am #

      Thank you, was wondering about the Japan debt to GDP and why that wasnt more of an issue.

    • moosehead November 4, 2011 at 4:05 am #

      +1

  109. John Moore July 4, 2011 at 8:47 pm #

    I cannot understand this countries stand on the national debt. We appear to be cutting jobs and just relying on tax revenues, which just keep on going down.
    This country needs to invest in housing and jobs in engineering and build our way out of what appears to be an on going recession.
    This country after WW2 owed 180% GDP and during the war it was around 230%GDP and yet we managed to set up the national health service and build thousands of homes every year, without decent homes to rent this country will just go futher down the pan.
    This country needs to get rid of these companies who hide in off shore bank accounts.

    • Jack Suddaby December 4, 2011 at 8:28 pm #

      Why invest into the housing market further, that is practically just sweeping money under the rug, you cant gain income from other countries from a house, its imply sits there, we need to invest into the stock market, begin new businesses and work our way up from there.

  110. Allan July 26, 2011 at 2:57 pm #

    I have read that the UK debt is £920bn to rise to £1.1-£1.2trillion by next year – if the government cuts are effective. However why is it that the CIA quote UK external Debt as $8.9trillion… that would be around £5.56trillion…. is this including public sector debt, private sector, government debt and all liabilities? It quotes the US debt as $14.3trillion which is consistent with what I’ve read.

  111. Simon September 21, 2011 at 5:22 am #

    I would like to make a few simple points.

    1. The Debt in the UK is rising by approx £6000.00 Per SECOND !!!!.

    Now we in the UK have approx 2.5 Million Unemployed, If EVERY ONE of them got a job tomorrow with a wage of £500.00 a WEEK….. The TAX and National Insurance deducted from them would NOT cover a DAYS interest accruing.

    2. I live in Leeds the Average house price is £200,000 in my street. We have 2 retired police officers living in my street.

    The Council Tax of all the properties in my street DOES NOT cover their pensions !!!!

    ….. Are you getting the picture yet.

    In simple terms ….. if you have £100.00 coming in each week and you OWE £170.00…. I does not work AND it never WILL….

  112. Adam Humphreys October 17, 2011 at 2:54 pm #

    All I’ve heard so far is how big the UK deficit is. With all the cuts and bills going down it would be helpful if we were told if the debt was starting to go down and by how much, it might actually start to put people’s minds at ease.

    • Ray October 21, 2011 at 2:19 pm #

      I agree. A web based measure of the UK debt which was widely publicised (BBC?) showing the trend as well as the actual level of debt could be very interesting and helpful for everyone. It is amazing that the government has a plan to reduce the debt and no visible measure of how we are doing. A thermometer like those outside churches could pull the rug from the anarchists who want to tear up the debt reduction plan. We could see that although painful, some progress is being made (or not?).

  113. Adam October 19, 2011 at 10:39 pm #

    What we are doing now is not dissimilar to Roy Jenkins’ cuts in the late 60′s he brought us out of an £800m deficit into a £387m surplus, toughen up and let the economy settle

    • vote UKIP October 21, 2011 at 1:15 am #

      I agree with you in principal except your claim of a surplus of £387m as great as that would be does not match the graph above which shows a constant UK debt as % of GDP throughout. Either the graph is skewed and your source is right or the graph is right and your info is wrong ??

      • tejvan October 21, 2011 at 9:43 am #

        The surplus of £387m will relate to the annual budget deficit. The graph shows total national (public sector) debt. One years budget surplus only makes a small dint in the total debt outstanding.

  114. Dennis Broe-Ward November 5, 2011 at 12:33 am #

    When overhead costs are more than income and new loans are unavailable to cover the shortfall, most of us sell assets to raise the cash to pay down debt. A downside with tax is it takes buying/investment power from the pockets of the public and business… it impacts negatively on growth. The oil industry, for example, was recently hit with an additional Northsea tax, causing independent oil companies to retreat from investing in developing new marginal fields, because they moved from marginal to uneconomic – lost investment and jobs.

    How about this for a not entirely thought through solution (no economist me) to pay off our £1+ trillion national debt and thus save £50 billion a year in interest payments: UK plc treat big business tax income as an asset e.g. 30+ years tax from the oil industry currently @ around £8 billion a year is worth £250 billion plus… let’s offer them say a 25% discount to pay this tax up front… boom, £200 billion. Let’s extend the offer to other sectors, like wind energy for example, to achieve the £1 billion+we need to cover the national debt – boom, £150 billion saved in interest payments over 30 years.

    Yeah, I know it’s at a rough idea stage but there’s plenty of cash in the international marketplace for participating companies to attract the up-front cost, it just aint’ being invested at the moment. And such deals could stipulate that the 25% discount is invested in new field developments, creating jobs, building energy capability, etc., and earning good returns for organisations (pension funds et al) who provide the up-front capital.

    One potential problem though, once we’ve wiped out the national debt, saved paying billions in interest payments, etc., this and successive governments will feel so flush they’ll no doubt rack up new debt with goodies for the public, to bribe voters to get them into power, and the banks will rejoice once again… with all that cash crossing their palms over and over.

    .

  115. Wayne Howard November 9, 2011 at 4:50 pm #

    In order to cut the deficit and the debt you must have growth as well as tax and cuts.

    I suggest the following

    Print a £100 billion and place it in Northern Rock which remains state owned, use Northern rock as a tool for direct credit to mortgage seekers and SME’s

    Let the bankers set their bonus’s as long as their is a direct link to the dividend paid out to investors. With inverstors dividends increasing shares in banks will rise and the vaule of the banks will increase, the publics shares can be sold over a period of time at an increased value to pay down our debts

    Up to £100 billion is the estimate of tax avoidence in the UK, close the loop holes and the gaps to claw back fair tax from companies who are not paying their fair share or investing in the UK. I see no reason why an owner of a clothes store can send out half a billion each year to his wife without any tax on it

    A national building programme where every council gives up land freely at the first stage so builders can build cheaply for private purcahse and social housing, the demand is there. Councils receive money for the land in staged payments over the term of the mortgage, this will allow banks to lend well below the actual value of the property initially and allow first time buyers to purchase a home with the council holding a charge on the property until the land is paid for.

    No tax for the self employed for the first £30k for 5 years encouraging people to start up their own business’s and invest

    Investigate the wholesale energy markets for profit as the big six retailers own 85% of the wholesale market and are selling the energy to themselves, set a guaranteed price that they must sell to new competitors entering the market and hold it for 10 years with increases only sanctioned by the regulator, lets start the deregulation again but get ti right and create competition and lower bills

    No tax on profits for companies investing in green energy for 10 years, there is money out there for companies to invest in other industries and if the profits that come back are tax free they will invest. The Russians sell the EU 25% of their gas and it forms 70% of their revenue, we cant go on being stitched up, renewable energy is the way forward.

    It is estimated that there is over 1 and half million people in this country who shouldnt be here, pay finders fees to bounty hunters to find them, they are working within a huge black market where companies are not paying the tax they should and the illegal immigrants are using vital services without contributing

    Work programmes for the long term unemployed. Councils are having to cut services due to costs, if the long term unemployed had work for their beneifits to help keep services going at a reduced cost, this will help the public and the unemployed as they gain dignity, experience and work ethic again

    Freeze fuel duty on petrol and deisel to keep prices down at the pump, this is stopping people spending on retail

    Invest heavily in manufacturing as it should replace some of the financial and service industry that will not survive and is heavily relied upon for tax receipts

    FREE university places for certain subjects where industry has to look abroad for workers to fulfill poitions

    stop buying US treasury bonds, a year ago it had risen to $511 Billion, how much the government had actually purchased is hidden under a clause which forbids the public to gain access to the information under the freedom of information act, we can only be funding that by selling sterling bonds at a cost to the tax payer as the US pay less interest than the UK

    We also need to find a way to fund income tax so that no-one pays tax on the first £15k giving people money in their pockets to afford to live and spend in the retail sector which feels like its in recession

    • Louise December 7, 2011 at 11:41 am #

      With so many brilliantly minded business types lending their 2 cents into this problem, we should be on a path to recovery by now!. Is it that the government is not listening or are we not shouting loud enough? A problem shared and all that. If the brilliant minds could form a collective and beat down the ‘hierachy’ until they listen then perhaps a way out can be found quicker and easier. On another note..I always said the Euro zone was a bad idea, how glad I am that we are not in it.
      We have been bombed, terrorised and invaded and yet as a tiny Island we have fought back with such force that we remain an independent nation still to this day. Britain may be in the shit but it is NOT itself shit.

  116. Robert Haastrup-Timmi November 10, 2011 at 12:09 am #

    I’m not an economist by any measure, but it looks to me the chicken will soon becoming home to roost in blighty!

    $8.9 Trillion in external debt? more than half of the united states external debt of $14.5 trillion? Am I missing something here?

    let’s face it, property, property, and more property! The most obsessed nation on earth that likes to make money out of property at the expense of it’s own kith and kin. no wonder why we have $8.9 trillion to fund our crack cocaine property habit. People must realise bricks and mortar is DEBT.. period. You either print lots of money, borrow lots of money or make things to fund that debt. We make hardly anything lol!

    At least the US own the internet which defines 21st century living, from google, to facebook, all motivated by very young people even before graduation. Germany makes things, and so does Japan. We make debt out of thin air in the square mile and that’s pretty much it folks! Oh by the way, here’s a way out… let’s go invade IRAN!

  117. Jon November 14, 2011 at 12:25 pm #

    Who are we paying all this interest to?

  118. Mike November 26, 2011 at 3:43 pm #

    Very clearly explained. The debt problem in the UK is vast, and seeing public sector workers strike over their pensions shows that most people just dont get it.

    There is a “Debt Charter” here that I have to agree with: http://www.cutthedebt.co.uk/our-debt-charter/

    • Ben December 8, 2011 at 2:52 pm #

      Mike,

      Why should public sector workers, pay money out of their own salaries (which are already low compared to equivalent private sector) to reduce the debt that was causes by greedy bankers knowingly trading assets that had no value to get rich.

      The rise in pension payments (double of what we currently pay) is to pay for this debt, NOT our own pensions.

      Would you pay out of your own salary each month to reduce a debt caused by these bankers who take home bonuses of over £100,000?

    • Lee December 10, 2011 at 4:23 pm #

      Ben,

      Public Sector wages are paid for by the Private Sector. Wages are nothing but recycled tax take, bumped up by the Private Sector. Treasury pays the wages of public sector and takes the taxes, only significantly less.

  119. Ron Williams November 30, 2011 at 9:13 am #

    If this country stopped sending millions in benefits to eastern europe and paying benefits to people who do not deserve it money would be saved, why is it that Australia do not allow people in to their country without money in the bank because they cannot sponge of the country if they are out of work.

  120. Math December 9, 2011 at 5:06 pm #

    I simply don’t get the government’s stance on this. Reducing the annual deficit shold certainly be the priority, but it has to be a plan to reduce it for the long term. Cutting deficit without ensuring there’s an earning infrastructure to keep it down is just short term electioneering.

    - The model of only allowing private industry from making profits and then taxing it is inefficient. Allow public organisations (including government depts) to bid for contracts. That’ll drive efficiencies, puts people in jobs, and directly put the savings into the coffers.

    - skip 67, and go straight to 70 for a retirement age for anyone currently under 45 (adding a little gray area to help the change through). Give it 15 years and we’ll be doing it anyway.

    - stop fiddling around with public service pension contributions. It’s essentially a cut from their earnings that deters the good, younger public servants from staying for the long term, and doesn’t raise a substantial amount anyway. The problem with these pensions is the retirement age, not the contributions.

    - private industry employees need to be given comparative pensions to public servants now. If we’re all scared of the future, we need to be planning for the future. Otherwise, the burden will fall the state.

    - some hard decisions need to be made in terms of existing commitments. We’re in deep doo doo anyway, so buying our way out of existing PFI deals would hardly make things worse.

    - do we really need to fund an invasive force in the british military and all the equipment that goes with it? Pull the british army out and provide men and resources to UN forces instead. Reducing duplication of roles and equipment would provide large savings.

    - we need a publicly managed bank to forge effective competition to the existing companies. If there’s an organisation that’s cheaper to bank with, and a profitless making bank should be that, then the others will have to follow.

    - Close the tax loop holes and stop the silly HMRC tax write offs for big businesses. Instead, as someone else suggested, offer transparent discounts to big businesses if they pay their tax up front.

    - we need to move away from globalisation and back to low-mileage captialism. By that I mean to, where ever possible, buy local and ensure that the money stays in circulation instead of going offshore.

    - fuel duty has gone beyond being a useful tool for discouraging car use. It’s hitting the poorest drivers the most and taking useful spending cash out of peoples pockets.

    - there needs to be some agreement to enforce a controlled lowering of property values because this is the long term debt that’ll really stop the public spending. They’re still artificially high and so most of those mortgages out there that contribute to the overall debt are really negative equity in everything but practice. In return for the government bail out, banks should revalue existing mortgaged properties downwards and write off the relative amount of the mortgage.

  121. Alex December 9, 2011 at 10:14 pm #

    Still i don`t get it.
    My question is who are this lenders ?From where the government is borrowing ?I mean is there any specific entity that we can point our finger kind of countries like china or USA.

    Call me idiot because i don`t have any clue on economics .I see it from this perspective
    If i have to take a loan from lender the lender obviously will need some warrant otherwise is not giving anyone just like that.If i have a good credit rate the lender will carry on lend
    me.

    • Jz January 7, 2012 at 12:44 pm #

      Alex,
      This is the golden question. In US the federal reserve, privately owned, creates money out of nothing then charges the American People interest!
      Most people think that Federal means elected government owned…. It’s no more government owned than Fed-Ex!
      Look for who controls the money supply and who’s best interests are being protected.
      It’s more than dull economics it’s liberty that’s at stake.
      Best to all.
      Jaz

    • ade January 20, 2012 at 9:24 pm #

      You’re not supposed to understand, otherwise the scam would then be laid bare for all to see.
      We could print this money that we Borrow, ideally, Govt would behave sensibly and pring less than we borrow to reiggn in inflation.
      BUT nyway, if we printed this money, as opposed to borrowing it from rich bankers, there would be no Govt borrowing, hence no Government debt hence no need fot you to pay taxes.
      Bankers are stealing your money, in order to do this, they have to put in place politicians in the leadership of all the major political parties who will ensure instead of coining our own money as a sovereign nation, we borrow it from Bankers. JFK tried to issue his own currency via executive order 11110 look it up on youtube, so they killed him.

    • Alan Light May 20, 2012 at 8:15 am #

      It is perhaps simpler to understand government borrowing in terms of a credit card loan .
      a) You borrow on your card-card 1
      b) You only pay the interest on the loan
      When finally the credit card company insists that you clear the debt –you simply open a 2nd credit card account with another provider.
      Borrow sufficient to pay off credit card 1 and repeat b)

      it can however become a little tricky when B) is a higher value than your income.
      The hope is that you will in time and get a higher paying job.

      If you don’t you become’ Greece’

  122. Rob Slack January 8, 2012 at 5:11 pm #

    “However, these pension liabilities are not things the government are actually spending now. Therefore, there is no need to borrow for them yet. It is more of a guide to future public sector debt. I don’t accept the fact that future pension liabilities should be counted as public sector debt. ”

    But it is only current borrowing that is “actually spending now”. Accumulated debt is an obligation to pay in the future, just like PFI and pensions and, at least in part, over a roughly similar time period.

    However, such debts are not a burden on the economy as a whole, unless owed overseas. The repayments just mean a shuffling of spending power among UK citizens.

    The tax implications may be politically significant. If PFI spending was not productive then the taxes will have to be taken from a lower GDP than there might have been (if the spending had been productive).

    If the PFI’s were needed because the Government was spending tax revenues on other things than needed investment, then it can be argued the PFI effectively funded that spending.

  123. Jeff January 21, 2012 at 11:49 am #

    Government actually does not help the economy, but rather, it destroys it. It’s rather simple… When the Government gets involved in business creation or provides federal loans of federally backed loans to businesses, they aren’t actually taking any direct risk except at the expense/risk of the tax payers (which are the people). As a result, these types of business loans provided by or backed by the government tend to go to less qualified individuals/businesses who are unable to qualify for private loans.. and for very good reasons. More likely than none, these businesses that rely on federal loans are usually unable to repay the loan back or file for bankruptcy because no one else saw value in this company and it wasn’t coming out of the government’s pocket. This means that with every failing business that the government forces the people to take a risk on (through taxes) the more money that has involuntary been taken out of my pocket or your pocket to buy other goods and services that other jobs have been created for.

    In the same vein, when the Government pushes stimulus packages or job creations, they are actually creating short term solutions for long term problems. They basically say, ‘Here, you build this bridge, fix it up and make it look nice.’.. But they don’t see that there is no return of investment in that project and there will be no profit generated from such project. Sure the bridge will look nice but it won’t pay for little Jimmy’s shoes.

    Government regulations also restrict business growth technologically as well as size in labor force. For example, let’s say I’m as a clothing manufacturer owner and I’d like to turn out as many products for my business with the least amount of resources. To do that, I will build 3 machines to take the place of 90 workers. I can now mass produce making clothes effectively and sell it at a much cheaper price. Now, I know what the pro-government thinkers are thinking.. ‘Well you just eliminated 90 jobs!” On the contrary, because I’m producing my products more effectively and selling hundreds more at a much faster rate, I decide to open 5 more stores nationally because I’m generating more profit and want to reinvest in my company. So I create 30 more jobs in terms of store managers and machine operators… but most importantly, I create products now hundreds more people can afford to purchase. I also have 15 machines working for me and I need those machines built and serviced, which creates even more jobs. Not only have my selling costs gone down but now it’s much cheaper for me to stay in business as well as easier for competitive businesses to start and challenge my products (either in quality or pricing).

    On the flip side, if the government told me that I have to hire 5 workers for every machine I install then I’m actually losing money on an ineffective labor force with a very high potential to mark up costs of my products, send my manufacturer overseas or go out of business completely.

  124. Steve - Camden CA February 1, 2012 at 11:34 am #

    The contraction we saw last year is likely to be followed by a further decline in the current quarter. If we don’t deal with the debts, I think our problems will be worse.

  125. phil noel February 11, 2012 at 7:01 pm #

    well if the government , were a business they would not last for two days.. what a bunch of childish idiots .. i mean who needs that old crap of little boys and girls fighting in school … and more important what idiot would send lots of money to greece , etc.. when we are in the shite .ourselves.. RIP OFF BRITIAN .. we the poor pay for all the cockups made by the rich ,,, i hate my own country . WHY cos its run by tossers . (bring back enock..)

  126. Mindflight February 15, 2012 at 11:36 am #

    WE as 1 people Black White Asian or any other of the wonderfull representations of bipedal homonids need to see our selves as 1 people.

    Not segregated into ethnic/religious groups to be manipulated, to be brought up to hate and point the finger at other neatly seperate groups. Blaming each other to cover our own ignorence of the true nature of WHY?

    Why are there poor,hungry, disposseed peoples?
    Why is there such a huge gap between those that have, and those that have nothing?
    Why do religious/govermental leaders live in absolute opulence?
    Why do religious leaders teach that anyone who does not believe what is in this version of this book is wrong?
    Why do we live in a society that teaches/encorages us to covert wealth and status?
    Why do we need a central bank, which loans money to other banks at interest, those other banks then lend to you at even higher interest.
    Why do these same central banks (all the big western economies have one) print all the money for the country/ and sell it to the government of that country……

    That people is where the huge country debts comes from people. Money is lent from the central bank at interest. the only money we have comes from the central bank, so we will always owe more money back that we will ever actually have.

    This means logically and not in anyway fiction, that those who run these central banks are those that run the country. These people have the power to say to the leagal ellected government, WE CALL IN THE LOAN…. the country goes bankrupt and that leagl elected government is who the media tell us to point the finger at for mass unemployment, huge public spending cuts, schools and hospitals being run into the ground.

    so why does the bigest question of all get asked.

    WHY DO WE NEED A CENTRAL PRIVATELY OWNED BANK?

    it seems this is the cause of all our problems and the solution is to get rid of this corrupt banking system

    • kennjohnsen March 22, 2012 at 5:47 pm #

      The Bank of England is owned by the Government.

  127. vvvvv February 20, 2012 at 8:17 pm #

    i need to know how muck the uk own
    also how much india own

  128. Steve March 4, 2012 at 4:34 pm #

    I suppose it’s not as simple as just crossing off noughts.
    UK like many countries waste energy
    Progress technology has made the private sector rich.
    Top 5% own UK wealth.
    Economic cake not shared equally as it used to be give and take a bit.
    Maybe it’s all down to simple idol worship; reaching for the stars.
    Even rubbish is not what it used to be, we only had small house hold bins
    What we didn’t throw away we would reuse or burn on the fire to keep warm
    Take back empty bottles get 3p nice bit of pocket money for us children
    These days the bins are twice the size and some houses want two or three of them
    There is wealth in the United Kingdom, but it’s like blocked sewage water, stagnant!

    Unfortunately it’s the elderly and disabled who pay the price they are ones left to suffer the worst. Tell me it’s not an evil government that we are rules by and I will tell you we are not a wicked people.

  129. Marjorie Bell March 5, 2012 at 2:36 pm #

    The ‘Government’ does not ‘owe’ this money, THE TAXPAYER DOES. The only money that the Government has is what it collects from US THE PEOPLE.

    • Alan Light May 20, 2012 at 7:30 am #

      I think it helps to understand what taxation is . I define it as follows:

      Taxation – A portion of purchasing power that is transferred from the workers /Investors in the Private Sector to:

      1) The suppliers in Public Sector(Public Sector Suppliers)

      2) Members of the population at large who are judged to be worthy recipients.

      3) National and international creditors who have lent money to the country(i.e Interest payments)

      Note:Those workers /investors in the Private sector who are suppliers to the Public Sector(in part or in whole) are to be regarded as Public Sector Suppliers in the context of this definition

      So many of ‘US ‘the people are net recipients of Tax (i.e purchasing power) and not net contributors.

  130. Dunk March 15, 2012 at 3:05 pm #

    @Ade

    Oh dear. Let me explain to you that printing money is a tax. When the government prints money, it raises inflation. This directly reduces how much you can buy with your salary. ie It has exactly the same effect as raising income tax, except that because it directly devalues sterling, it hits everyone, including those on benefits.

    • Chris Forse June 3, 2012 at 11:00 am #

      The link between quantity of money and inflation has weakened in recent years. Factors bearing on prices are (a) value of your currency relative to those you trade with, and (b) the costs of production in countries that sell you products e.g oil products, China. Under Greenspan money supply in US was loosened without any impact on inflation cos cheap Chinese products flooded in. But the most important factor is that asset prices don’t figure in inflation figures, so if house prices soar because of loose money then it does not figure in the statistics even though it is the most important price of them all (just ask young people trying to get on the ladder). Ditto share prices, derivatives and the complete raft of financial assets. We are supposedly all in love with these assets when they rise in price but (a) these assets don’t actually produce anything in the ‘real’ economy (goods and services) and (b) when their price rises people who do not possess them can’t afford them.
      We have had two rounds of quantitative easing and inflation has hardly been affected – the cause of current inflation is the rise in commodity prices which is due to global factors and the weak value of the pound.
      So no I do not agree that QE will cause inflation.

  131. ezekielziggy March 29, 2012 at 7:59 pm #

    A response I made to someone who linked this article to me.

    Just on a brief glimpse the article justifies high debt levels with comparisons to Italy (not the best example on hindsight) and Japan (which has the advantage of a domestic population that really likes to save and buy government bonds, thus not relying as heavily on markets/governments ect).
    Yes our government had a higher debt level after world war 2, our economy was in little pieces and it took a long time to pay back the US, this is not a situation we wish to repeat. We also enjoyed rather nice periods of growth, which helped quite substantially. The world is also a different place now, we are far more globalised, interconnected ect. The risks are far higher, we are not special.
    Bond yields are low largely because markets have faith in our seriousness and ability to tackle the deficit. (It is also helped by the rounds of QE where the government has been buying our own bonds helping to decrease the price of borrowing). Using it as a reason to not take the debt/deficit seriously is a little silly considering the reason is so low is because we are tackling the deficit (although the argument could be made that we could ease the pace/depth a little in response to this. We still couldn’t make a U-turn).
    It then mentions that the cost of the national debt is increasing noting that it was £48.6 bn (which is more than we spend on the military) and is larger than some of the cuts that we are making. Not sure what its point it’s trying to make is. It seems to highlight that it is a big problem that is getting bigger and should be tackled. Or maybe it awkwardly left it there in hopes that no one would notice it.
    It then goes onto mention how future national debt is still going to increase up to 2015 (not sure how this is helping its argument). It then talks about economic expansion without explaining how it would achieve this (yes it would help tackle the debt/deficit, the question is how). It makes the point of how taxes/spending cuts can dampen growth, once again it is correct, they can. What are the alternatives though and would it be less dangerous to pursue the course its advocating.
    “Problems of National Debt
    Interest Payments. The cost of paying interest on the government’s debt is very high. In 2011 Debt interest payments will be £48 billion a year (est 3% of GDP). Public sector debt interest payments will be the 4th highest department after social security, health and education. Debt interest payments could rise close to £70bn given the forecast rise in national debt. Higher Taxes / lower spending in the future. Crowding out of private sector investment / spending The structural deficit will only get worse as an ageing population places greater strain on the UK’s pension liabilities. (demographic time bomb) Potential negative impact on exchange rate (link) Potential of rising interest rates as markets become more reluctant to lend to the UK government.”
    Worth reading that bit of the page, not very easy to dismiss as easily as the author does.
    It then talks about different types of debt, we might not top all of them in terms of GDP per capita, but we do worst overall.
    Simply put bills have to be paid eventually, economics is complicated and my fingers hurt.

  132. me April 10, 2012 at 10:17 pm #

    could you inform the Intergenerational Foundation of the national debt history and also how much is owed to Britain as I don’t understand economics that well and your site makes it clear, however, it seems to conflict with their statement account. thank you

    • me April 10, 2012 at 10:51 pm #

      I think as a country we ought to be proud of what we have achieved seeing how debt has dropped proportionately in the first graph: UK National Debt since 1918. We are pulling back to keep the country ticking over financially and it seems that there is a plan, despite the “naysayers” in how to maintain it.

      The other areas which need to be addressed which affects us individuals and groups is not in this remit and the power to put that right is in the hands of government and the industrial leaders.

  133. Admin May 30, 2012 at 10:10 am #

    That is good kind of collective information u have and it was very helpful for all of us. I have also that kind of information on it.. http://worldsseconomy.blogspot.com/2011/06/economy-of-uk.html

  134. jakia June 10, 2012 at 2:51 pm #

    Thank you very much.I solve many qns from your discussion.
    Thanks again

  135. Tony June 23, 2012 at 5:22 am #

    I wonder if that 07 spike is from the toxic cd infection from the US, or bail out money extorted out of Europe by the US. We got terrorized Americans thinking the world is going end on this one and after 100 years of this jack it up and tear it down b.s their is no one to reign in the evil oligarchs.

  136. Jason June 24, 2012 at 10:39 pm #

    According to various websites the uk are currently over £1trillion in debt but like every other country, we are owed probably the same amount from various countries. I have seen that the US owe us between £400 and £500 billion. Now I asked well why do we not say to the US we want our money. Now i was answered saying it would be stupid to do that because it was cause a war between countries. Which to I have answered ‘will it not become war if we keep taking money from other and they take money from us and not paying it back not cause an even worse war?

  137. david Quinn September 18, 2012 at 9:24 pm #

    I see no mention in this discussion, or much in the media, about the effect of Quanitative Easing on UK debt. As I understand it the Bank of England prints money and buys gilts mostly owned by British banks. Once it has got the gilts back in its hands it does not pay interest on them. I believe the BoE has bought something like £320B of national debt, so interest is being paid on £700B not on a trillion. Furthermore, in 2007 before the crisis we had about £400B of debt, according to this article. But we were paying a much higher figure for interest. I am not sure what this was because British debt is borrowed over a period of 14 years and so the average would include several years when interest was relatively high (and once the gilts are sold the interest remains fixed until the gilt is redeemed by the government). My guess is something like 6%. Current interest appears to be about an avergae of 4.8% if the figure of £48B p.a. is correct. But this is falling because the government currently borrows considerably below this and older more expensive debt is constantly being redeemed. So the amount of interest we are paying is not far above what we were paying in 2007, perhaps 1% of GDP more. So this hardly corroborates the opinion that our debt is a monstrous burden and is stifling the economy. The people who say it is have I thinl another agenda which is to destroy the welfare state. This is utter folly because it will perpetuate the sort of imbalance already being perpetrated by growing inequality which will hollow out our economy. Not so much back to the future as forward to the past.

  138. david Quinn September 18, 2012 at 9:26 pm #

    I see no mention in this discussion, or much in the media, about the effect of Quanitative Easing on UK debt. As I understand it the Bank of England prints money and buys gilts mostly owned by British banks. Once it has got the gilts back in its hands it does not pay interest on them. I believe the BoE has bought something like £320B of national debt, so interest is being paid on £700B not on a trillion. Furthermore, in 2007 before the crisis we had about £400B of debt, according to this article. But we were paying a much higher figure for interest. I am not sure what this was because British debt is borrowed over a period of 14 years and so the average would include several years when interest was relatively high (and once the gilts are sold the interest remains fixed until the gilt is redeemed by the government). My guess is something like 6%. Current interest appears to be about an average of 4.8% if the figure of £48B p.a. is correct. But this is falling because the government currently borrows considerably below this and older more expensive debt is constantly being redeemed. So the amount of interest we are paying is not far above what we were paying in 2007, perhaps 1% of GDP more. So this hardly corroborates the opinion that our debt is a monstrous burden and is stifling the economy. The people who say it is have I think another agenda which is to destroy the welfare state. This is utter folly because it will perpetuate the sort of imbalance already being perpetrated by growing inequality which will hollow out our economy. Not so much back to the future as forward to the past.

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  140. Clive Cain November 13, 2012 at 4:49 pm #

    The government keeps claiming that their harsh (but very necessary) austerity policies are working and that they have reduced the national debt by 24%, yet your graphs seem to totally disprove this claim. If anything, your graphs seem to show that the national debt is continuing to rise quite steeply, despite the government’s austerity policies, primarily because tax revenues are down and welfare payments are up because of the rising unemployment across the country (caused as far as I can see by the government’s austerity policies). Is the government painting a misleadingly and unfounded rosy picture to prove their policies are working, or am I failing to read your graphs correctly?

    • BobbyTock0 January 6, 2013 at 7:24 pm #

      Actually, they say they have reduced the deficit by 25%, not the debt… and they have.

    • Jon January 8, 2013 at 4:33 am #

      So since 2009 the UK annual deficit has shrunk by 25% through austerity, while stalling the economy.

      Big spender America on the other hand has seen its deficit shrink by 30% (10.1% of GDP FY 2009, 7.0% FY 2012), while achieving continuous growth.

      Guess austerity could be characterized as penny wise, pound foolish.

    • HookesLaw August 2, 2013 at 11:24 pm #

      As others point out its the deficit that has been reduced not the debt.

      Jon – see comment below – should know that annualised US growth was virtually zero at the end of 2012. This despite all their stimulus.
      its picked up recently 0- but so has ours.
      And of course the latest figures show that we did not in fact slip into another recession.

  141. Aiden December 18, 2012 at 2:02 pm #

    hi, could you explain who these overseas debtors are?

  142. Robert Samilton December 24, 2012 at 6:36 am #

    That’s very nice, as you explain real level of UK National Debt, I got new information from you.
    But I have a some question how you collect debt information?

  143. David Nicol February 7, 2013 at 9:47 pm #

    31 million people work in the UK for an average of 44 hours a week at an average of GBP 12.5 per hour making 1,108,250,000,000 per annum and total savings are 17,050,000,000 excluding pension savings which are over 1,000,000,000,000 (which covers most of the public and private debt.

    These figures compare favourably with the situation in 1850. They exclude all physical assets owned free of debt which are around 1,000,000,000,000,000 at current values, and also exclude investment abroad relating to assets registered as owned in the UK of around the same figure. As such the nett assets per head in the UK exceed any other G7 country. However the Italian figures are comparable because of the difficulty in assessing the asset values in Italy and those owned by the Catholic church.

    It is about time people stopped playing with these silly figures.

  144. ali chemchi February 16, 2013 at 12:24 am #

    Thanks first,but what about internationaly;outside UK…you have a nice day thanks

  145. Charlotte Anderson February 26, 2013 at 11:04 am #

    Great post Tejvan

  146. S D Liddle March 4, 2013 at 1:18 pm #

    I have a very radical idea on how we could reduce our national debt. So radical I believe that the government would never even have thought of taking such action. My idea is as follows:

    1) Reduce the Member of Parliaments base wage to £40,000 per annum.
    2) Make the MP’s office staff payed by the government directly rather than through the MP’s expenses.
    3) MP’s are no longer allowed to put a second home on expenses unless that second home is less in its upkeep cost than the travel to the Houses of Parliament.
    4) MP’s can only claim a maximum expenses per annum equal to and no more than their annual wages.

    I believe that this radical idea would help our nation get out of the economic crisis that we are in now and back into being a nation we can all be proud to call our homes.

    • Tejvan Pettinger March 4, 2013 at 2:42 pm #

      It really wouldn’t make any noticeable dent in the national debt of over £1,000 billion.

    • Nick July 22, 2013 at 3:32 pm #

      Oh yeah…cutting MP’s wages will really make a dent in the national debt!! What planet are you on..?

  147. sonia March 10, 2013 at 2:07 pm #

    Thank you for the help..:)

  148. Tiger March 14, 2013 at 11:45 pm #

    Does anyone know why we have this debt that is borrowed against us the tax payers? In the 1400s England made the Bank of England to borrow against its future conquests in France . Since then the government has used and abused the rites to this . Therefor creating this arse hole of a mess. People need to understand the history of this problem before having a relivent salution

    • Chris Hindle March 21, 2013 at 11:46 am #

      I drifted onto this site while looking for historical uk national debt charts. I imagine it is a help site for economics students?
      That being so, I also imagine that your text books are still droning on about banks being a benevolent interface between savers and borrowers too – Absolute bollox !!
      I’m sorry to inform you all that you are being had. High Street banks are not part of the story, they are the whole story since the age of ‘digital money’ (go to positivemoney.org.uk)
      Banks create 97% of the UK money supply out of nothing at all. (the remaining 3% is produced as notes and coins by the Bank of England)
      The banks create this money as loans and especially mortgages Between 2002 and 2009 high street banks piped £1trilllion into the uk property sector alone (which kinda explains why all you young people will never be able to afford to buy your own home)
      Since 2008 the same bastards have pointedly refused to lend money at all especially to the business sector (Hence the lack of economic growth)
      Do not be fooled by politicians blaming each other for the economic problems The culprits are the banks Politicians are distinctive only by the lengths to which they will go to grovel to the banks
      Can you all remember the Greek Prime Minister being kicked out of office for questioning further austerity? (the banks did that)
      Did you all pay attention to the Cypriot bail out solution (the banks came up with that idea)
      Do you all realise that it is not Cyprus per se that requires bailing out … yes you guessed it … it is Cyprus banks that need money
      Go to positivemoney.org.uk We desperately need you young people to understand 21st century economics – not dated crap

    • Colin Hammill May 25, 2013 at 1:38 pm #

      We are in this state of ruin because ‘Conservative Values’ prevent any meaningful use of money either made or borrowed! During the first 2.5 years since the coalition got in they borrowed £500bn (0.5 Trillion) and did not invest in engineering, technology, manufacturing or indeed any tangible business other than ‘financial products’ (Ponzi schemes). This has been yet another lesson in hardship that seems to happen with every Conservative run government. Sadly for any Liberals out there Mr. Clegg did nothing to halt this, more so he joined in with the Conservatives as they ‘taught us all another lesson’! This time perhaps the lesson is learned, never ever vote Tory!

  149. Mike C March 22, 2013 at 11:08 am #

    The debt-to-GDP ratio is not 73% but closer to 55% because we own the Bank of England. You say that the Band of England holds 25% of government debt. Whatever debt we owe the Bank of England we owe to ourselves and thus this should not be considered debt. A little like a husband who owes money to his wife: If the two share joint accounts and all monies then the husband doesn’t owe anything, in effect.

    We have spend the last few months buying back government debt through quantitative easing (printing money). This should show up on the debt-to-GDP ratio and the OBR should report the figure as 55%.

    • Tejvan Pettinger March 23, 2013 at 10:34 am #

      The intention of the Bank of England purchases of gilts is to be just temporary, and the gilts will be sold back onto open market when Q.E. ends

    • Tariq June 17, 2013 at 5:49 pm #

      Mike, thank you for that. I have been trying to determine that and figure it out for myself also. So although it is not healthy we have room to work on it.

      At least hope so.

  150. Georgina B April 5, 2013 at 4:26 pm #

    How sustainable do you think that the austerity measured imposed on European countries are in economic and political terms?

  151. Fixing Britain June 25, 2013 at 1:48 pm #

    Great site. Saw this video recently towards ‘A New Economic Policy for Great Britain’. Some radical ideas there. http://www.youtube.com/watch?v=apAY-R4263Y

  152. Paul July 29, 2013 at 1:51 pm #

    When you compare the UK debt problems to other countries, it really doesn’t seem that bad. Not good, of course, but it’s a reminder that there are MANY people who are worse off and struggling wit debt.

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  156. Ralph Musgrave January 9, 2014 at 7:27 am #

    The above article omits to mention that the real or inflation adjusted interest we pay on the debt is zero approximately.

    Another point that will have debt-phobes completely flummoxed is thus. If inflation is near zero and the real or inflation adjusted rate of interest paid on the debt is zero, then then the debt becomes the same thing as money (monetary base).

  157. mr cannan January 13, 2014 at 1:14 pm #

    is this right and is it american

  158. Ahmed Aden Ismail May 6, 2014 at 7:29 am #

    ok,

  159. Adam December 18, 2012 at 9:17 am #

    Debt isn’t as bad as in the 1950s and 1940s – but then we still set up the welfare state

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  22. What Should Government do about its debt? | Economics Blog - November 25, 2009

    [...] an important economic and political question is when and how to tackle the government’s public sector debt. It is currently over £800bn (56%) but growing very [...]

  23. UK Recession Triggers Innovation Online…But Why Now? - December 9, 2009

    [...] create will also be a nice little contribution to the estimated total UK debt of around £800bn ( As of July 2009 Source), though why now, could this not have been done 2/3 years ago at [...]

  24. UK Economy 2010 | Economics Blog - December 18, 2009

    [...] National Debt is currently £830bn or just under 60% of GDP. But, with a budget deficit of approx £180bn forecast for 2010, this will rise rapidly. UK Borrowing [...]

  25. [Audio blog] Where on Earth are the Liberal democrats? | Marcus Povey - January 9, 2010

    [...] It seems clear that both Tory and Labour seem to want to lock us into an authoritarian statist and high tax agenda for another 5 years at [...]

  26. Politics Summary: Friday, January 22nd | Left Foot Forward - January 22, 2010

    [...] claims that “Public debt soars to record at 61.7% of GDP” It was last at this level as recently as the 1960s. The Wall Street Journal reports that there was solid demand for the latest gilt [...]

  27. wheresrhys » Blog Archive » Heavens, we’re in a lot of debt - March 8, 2010

    [...] Another graph on the same page demonstrates that current national debt is at around 60% of GDP, which I don’t think is too bad given that the current global economic crisis is considered to be at around the same order of magnitude as the 1930s great depression, and back then national debt hovered between 150 – 200%. I know we live in a very different, more competitive world, but I doubt it’s anywhere near as catastrophic as the papers and the politicians would have us believe. [...]

  28. National Debt FAQ | Economics Blog - March 9, 2010

    [...] Definition of National Debt and National debt in the UK – National debt is essentially the total amount the government has borrowed from the private sector [...]

  29. UK Debt Held by Oversees Investors — Economics Blog - May 8, 2010

    [...] One of the most common questions is, who owns UK National Debt? [...]

  30. UK Debt Default? — Economics Blog - May 17, 2010

    [...] levels of UK national debt and forecasts for rises in government debt, what are the prospects for a UK debt [...]

  31. A small matter of a couple billion… « The Soul Pages - May 19, 2010

    [...] keep note of my sources! Google it innit!…Anyway, yeah I read that, wait…got this from Economicshelp.org that:  The Centre for Policy Studies (at end of 2008) argues that the real national debt is [...]

  32. UK Debt Rating — Economics Blog - May 24, 2010

    [...] UK National Debt [...]

  33. How To Reduce National Debt — Economics Blog - June 1, 2010

    [...] For example,  in the UK the Public sector net debt is the total amount of outstanding debt. In the UK the national debt is currently £890bn or 61% of total [...]

  34. Anti-BBC economics « Though Cowards Flinch - July 29, 2010

    [...] will be around £1,600bn in 2010.  Current interest repayments, around 60% of which are are around £35bn per [...]

  35. SOCIALIST UNITY » BRITISH GOVERNMENT DEBT, FROM ATTLEE TO CAMERON - August 9, 2010

    [...] graph on the right is extremely interesting in showing the historical level of government debt in the Twentieth [...]

  36. Record Fines for Speeding | Cycling UK - August 12, 2010

    [...] None of this £30 and don’t do it again. A few of those speeding fines, and suddenly even the UK National debt wouldn’t look so [...]

  37. Which Country Has Biggest Deficit? — Economics Blog - October 19, 2010

    [...] government borrowing) forecast for 2010/11 is for net borrowing of £149 billion or 12.6% of GDP. (UK national debt) It is certainly one of the highest. Though I think Greece can claim the prize of the highest at [...]

  38. waystoimprovebritain - November 9, 2010

    [...] 2http://www.economicshelp.org/blog/uk-economy/uk-national-debt/ [...]

  39. 50,000 Students Revolt: A Sign of Much Greater Anger to Come in Neo-Con Britain | Andy Worthington - November 11, 2010

    [...] and wealthy individuals, which could cover most of the proposed cuts? And have they forgotten that the City is directly responsible for much of the deficit, from the economic meltdown of 2008 to the bank bailouts, the loss of tax revenue and the increase [...]

  40. UK Economy 2011 — Economics Blog - January 4, 2011

    [...] More on UK Public Sector Debt [...]

  41. The Debt we’re In « Blahffiti - January 23, 2011

    [...] is not necessarily the end of the world, as long as the National Debt, or at least the interest payments on it, can be serviced, which can only achieved from sustained [...]

  42. Dow 12,000 Welcomes Top 0.1% to Davos! « InvestmentWatch - January 25, 2011

    [...] can give.  We haven’t even discussed the possibility of a UK default in Europe but 2010 Public Sector Net Debt was already clocking in at $1.3Tn, which is about 65% of the entire GDP with another $200Bn added this year.  While that may sound [...]

  43. Week 5: Prat, Nick Clegg - February 6, 2011

    [...] us since the late seventeenth century, and it was a higher proportion of our GDP throughout the period between the First World War and 1970 (and from George I through to late Victorian times).  Our current national debt is a smaller [...]

  44. Because what the world really needs is another blog about the protests… | Vent & Ponder - March 27, 2011

    [...] like the idea of spending cuts (who would?) but they think that, on balance, a country with a MAHUSIVE budget deficit probably doesn’t have much [...]

  45. Daily Mail heaps bank debt on nation’s shoulders | Left Foot Forward - April 10, 2011

    [...] to the Mail, UK national debt stands not at 58 per cent but at a full 240 per cent. The newspaper takes its cues from a recent Centre for Policy Studies [...]

  46. Debt, what debt - DesignersTalk - April 14, 2011

    [...] This makes things a bit easier to digest and is probably the source of most of his rantings. UK National Debt | Economics Blog [...]

  47. The Fairy Butler Dare « wholettheyankin - April 28, 2011

    [...] 15 years. We have incurred a shocking level of debt, according to the Office National Statistics (http://www.economicshelp.org/blog/uk-economy/uk-national-debt/), the Net debt was £2,252.1 billion at the 27th March 2011. You have to ask yourself, if after [...]

  48. The wages of Scottish independence – the currency problem | England calling - May 27, 2011

    [...] The size of the damage done can be seen from the Jamieson quote above: if the UK national debt reaches £1.4 trillion by 2015 that will mean the national debt will have nearly trebled (excluding inflation) since 2008 when it was around £500 billion (http://www.ukpublicspending.co.uk/uk_national_debt_chart_10_G.html).  Even worse, the official national debt figure does not include the costs of bailing out the banks or  the full cost of PPP and PFI expenditure, debt which  was kept off the official national debt by Gordon Brown’s off-the-books Enron style accounting.  The official national debt figure with all identifiable  costs included (the unadjusted measure of public sector net debt ) was £2252.9 billion  or 148.9 per cent as at May 2011. (http://www.economicshelp.org/blog/uk-economy/uk-national-debt/). [...]

  49. March Violets of the Modern British Left » Westminster Journal - June 2, 2011

    [...] and 500,000 people converged on central London, to demonstrate against government spending cuts. According to EconomicsHelp.org, “[i]t is estimated [that Britain’s] National debt will could rise close to 100% of GDP by [...]

  50. UK External Debt and Assets | Economics Blog - July 28, 2011

    [...] The official UK public sector debt is currently around £920bn (forecast to rise to over £1trillion next year). UK debt [...]

  51. British riots didn't arise in isolation — Transition Voice - August 9, 2011

    [...] the debt-ridden financial system of this country drive both their parents into working long shifts with irregular hours to suit our 24-hour culture, [...]

  52. UK Debt as a % of GDP | Economics Blog - September 15, 2011

    [...] National Debt UK [...]

  53. Debate on UK Debt | Economics Blog - September 15, 2011

    [...] National Debt [...]

  54. Oh, What Became of the Likely Lads? « The Lady Libertarian - September 26, 2011

    [...] just stumbled across some information concerning the UK debt-to-GDP ratio.  If one doesn’t include financial sector intervention [...]

  55. Politics = economics + psychology : samuelpalin.com - October 19, 2011

    [...] Politicians try to simplify these positions for the cameras. To paraphrase the ‘cutters’: deficits are unsustainable, and Western governments are spending eye-watering sums simply servicing debt. The ‘spenders’ note that the most effective way to cut debt is through growth, and that government debt is at historically low levels. [...]

  56. Timing of Austerity Measures | Economics Blog - October 21, 2011

    [...] – like button',unescape(String(response).replace(/+/g, " "))]); }); Readers Comment on UK National Debt – What we are doing now is not dissimilar to Roy Jenkins’ cuts in the late 60′s he [...]

  57. Zero to 69 « Tales of a Reluctant Activist - November 4, 2011

    [...] but to cut foreign aid would mean it has an even greater priority problem. Great Britain also has enormous debt and its government is also cutting back on spending, except in foreign aid. In that one area, Great [...]

  58. Euro Debt Crisis Explained | Economics Blog - November 10, 2011

    [...] between, 2007 and 2011, UK public sector debt almost doubled from 36% of GDP to 61% of GDP (UK Debt – and that excludes financial sector bailout). Between 2007 and 2010, Irish government debt [...]

  59. Quora - November 11, 2011

    What % of UK GDP is debt?…

    The UK currently publishes two figures: 1. UK public sector net debt in September 2011 was £966.8 billion, equivalent to 62.6%of GDP. 2. Including all financial sector intervention (RBOS, Lloyds etc.) the net debt was £2266.3 billion (148.0% of GDP). T…

  60. General Government Gross Debt in UK and EU | Economics Blog - November 17, 2011

    [...] UK government debt is published as ‘public sector net borrowing’ – There are two measures of this [...]

  61. Total UK Debt | Economics Blog - November 22, 2011

    [...] When examining debt levels in the UK, there is government debt – measured by public sector borrowing (often referred to as National debt). See: UK National Debt. [...]

  62. National Debt and Deficit Explained | Moneybugz - December 1, 2011

    [...] http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/ [...]

  63. Dave’s PMQs pledge to continue stealing (as much pantomime review as you’ll ever get on this site) | Luikkerlog Archived - December 3, 2011

    [...] Britain’s accumulative debt is forecast to grow. Here’s a chart that I got from a good website that can explain these things better than I, and where it is mentioned that the national debt could [...]

  64. ‘Official’ British government debt rises to a record of £1 trillion pounds | The God That Failed - January 24, 2012

    [...] because the ‘unadjusted’ figure is £2,266.30 billion, or £2.3 trillion pounds, if we include what the government has borrowed to fund its bank purchases of RBS and [...]

  65. The World Is Running Out Of Money - But Who Do We Owe It To? - January 26, 2012

    [...] UK National Debt [...]

  66. Counting Cost Of Cameron? « thedevilisinthedetail - January 29, 2012

    [...] 1. David Cameron’s Conservative Government oversaw, and potentially orchestrated through their austerity plan the first breaching outside war-time of the £1 trillion threshold for UK National Debt . [...]

  67. Ghosh – IMF authors define “fiscal space”. « The Jefferson Tree - January 31, 2012

    [...] for the UK just after World War II was over 200% without any big problems. (See 3rd and 4th charts here). They also seem to be unaware that Japan’s public debt is also around the 200% level, yet the [...]

  68. Are The Good Times Really Over For Good? » Frost Magazine - April 10, 2012

    [...] Government debt is at a £988.7 billion. And who is going to have to pay that off? The decent, hard working people of Britain. Oh well. We can always print some more money. [...]

  69. Factors That Determine Bond Yields | Economics Blog - June 2, 2012

    [...] 3. Higher government Borrowing. (UK debt) [...]

  70. Why do Premier League Footballers earn more than nurses? | istigechev - June 8, 2012

    [...] http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/ [...]

  71. Skepticlawyer » Debt, doom and despair - July 16, 2012

    [...] But the Australian and US history of national debt pales into insignificance compared to that of the UK. [...]

  72. Twenty-Twelve, Twenty-Schmelve – A Bitter, Twisted, Hipster Winges About Nationalism And The Olympics | Space Giraffe (?!) - July 25, 2012

    [...] threat that stalks the country. According to Google (the leading expert in everything) the UK currently owes £1,038.3 billion to… erm… someone. The website I’ve linked to says “The Private Sector” which I can only assume is [...]

  73. Why do the Lib Dems stay in the coalition? | Think Left - August 14, 2012

    [...] was no national emergency, on the scale suggested, as the graph below shows (10).  The UK has had much worse national debt and was in a much better position than many other [...]

  74. Quora - September 15, 2012

    Is the current level of UK debt (around 60% of GDP) really something to worry about?…

    Thanks for the answers and further discussion so far. If I can summarize, the two possible answers currently appear to be either: no, it’s not that worrying, or; it’s worrying because it is accompanied by an astronomical level of personal / corporate…

  75. Who Owns UK Debt? | Economics Blog - September 28, 2012

    [...] UK Public sector net debt was £1,032.4 billion  at the end of July 2012, equivalent to 65.7% of GDP [...]

  76. UK National Debt « Dnmufc's Blog - October 14, 2012

    [...] economics Help Like this:LikeBe the first to like this. [...]

  77. British tax-the-rich scheme runs into trouble with nonwealthy ‘rich’ people | Full Comment | National Post - November 20, 2012

    [...] and shot down by both Cameron and Osborne, but the British budget situation is so unnerving (i.e. a deficit of about $200 billion, eight times Canada’s in a country with just twice the population) that [...]

  78. Debate Points – Welfare | iwastoldtheredbegin - November 27, 2012

    [...] is bad, yes. Let’s tackle the tax fraud (and thus eliminate the budget deficit in one fell swoop) then we can start to worry about the welfare fraud [...]

  79. UK Budget Deficit Forecast | Economics Blog - December 6, 2012

    [...] UK National debt [...]

  80. National Debt Up Since 2010 Election | The Blog - January 22, 2013

    [...] Chart via – http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/ [...]

  81. Uk National Debt Clock | Best Taffic Services Site - January 24, 2013

    [...] http://www.economicshelp.org [...]

  82. How bad is government debt? - Economics Blog - January 28, 2013

    [...] UK Debt [...]

  83. 13 years of overspending and borrowing | To the left of centre - January 31, 2013

    [...] and increased spending to cover the resulting increase in benefit costs. Below is a figure from Economics.help. The data is from the HM Treasury and, although I haven’t checked it, appears to be the same [...]

  84. Daily Mail Economics - Economics Blog - February 22, 2013

    [...] UK Debt [...]

  85. Osborne, UK Debt and Credit Ratings - Economics Blog - February 26, 2013

    [...] UK Debt [...]

  86. John Ward – The Evaders : British Bank Control Enough Tax Evasion To Almost Pay Off Our National Debt At A Stroke – 8 April 2013 | Lucas 2012 Infos - April 8, 2013

    [...] That is six NHS budgets, twenty defence budgets, eighteen welfare budgets, and five UK State pension budgets planned for the UK’s 2014 fiscal year. The evasion total is the same size as the entire public sector pension fund (itself a disgrace of illegal embezzlement) and only slightly smaller than Britain’s total national debt. [...]

  87. John Ward – The Evaders : British Bank Control Enough Tax Evasion To Almost Pay Off Our National Debt At A Stroke | My Light Warrior "OPPT-IN" - April 8, 2013

    [...] That is six NHS budgets, twenty defence budgets, eighteen welfare budgets, and five UK State pension budgets planned for the UK’s 2014 fiscal year. The evasion total is the same size as the entire public sector pension fund (itself a disgrace of illegal embezzlement) and only slightly smaller than Britain’s total national debt. [...]

  88. Top 4 Coalition Lies: Busted | Scriptonite Daily - April 20, 2013

    [...] Office, the Bank Bailout increased the National Debt by £1.5trn.  The National Debt now stands at 73.5% of GDP and is expected to reach 101% by [...]

  89. Democracy vs. the global state: Bilderberg conferences, inferences, references | Family Hurts Inc - Inquiry, News & Critique - June 14, 2013

    [...] “The UK national debt is the total amount of money the British government owes to the private sector and other purchasers of UK gilts.” UK National Debt (http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/) [...]

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