On Tuesday the Times reported that ‘households are piling billions of pounds of debt on to credit cards, overdrafts and personal loans at record levels in a trend that economists are warning is unsustainable just as interest rates are set to rise.
This is a shocking figure that should have been front-page news. You can add this unsecured personal debt to the ballooning national debt figure.
Provisional estimates for this year put the total public debt at £1.798trillion.
This is 86.3 per cent of GDP, up from 85.3 per cent the year before.
It is true that Government borrowing is at its lowest annual level in 11 years. It fell by £3.5billion to £42.6billion in the 2017-18 financial year, but still, if your public debt is £1.798TRILLION, I wouldn’t be getting too excited. None of us is going to be living within our means any time soon.
This excludes (as far as I understand it) pensions, funded and unfunded. The UK government has a total of £5.3trillion in pension liability entitlements (279 per cent of GDP), of which £4trillion is unfunded (213 per cent of GDP) and paid out of taxation.
As Guido pointed out a few weeks ago, the interest alone on this debt is a cool £1billion a week, which is more than the budget for Scotland and Wales combined.
Yet despite all this we seem to finding a couple of millions here and there every day. In June, £20million turned up to tackle loneliness. Yes, you heard that right.
On Tuesday, Damian Hinds found £30million for school nursery places for disadvantaged kids and £20million to ‘boost professional development’ for early-years workers. This is to improve social mobility, because too many kids are starting school unable to speak properly. And for years they told us mothers who stayed at home to look after their kids, which includes speaking and reading to them, were losers. Now it seems looking after the youngsters properly can cost £20million. Quite the turn-around there.
Now call me a cynic if you will, but it seems to me that this figure of £20million crops up time and again. It’s as if the Tories think £20million is not too much to scare anyone, but not too little that it can be easily dismissed. In addition to the £20million to tackle loneliness (can you imagine saying this to even a socialist 50 years ago? I doubt even they would think this was a proper use of public funds) we have seen these recent announcements:
· In June, Arts Minister Michael Ellis launches £20million fund for culture, heritage and the creative industries to benefit towns and cities across England;
· In May, a £20million boost for business innovators powering the UK’s low-carbon hydrogen economy;
· Also in May, Science Minister Sam Gyimah announces £20million Plastics Research and Innovation Fund to turn the tide on plastics production;
· In April, the UK has established a £20million Commonwealth Fund to continue its commitment to trachoma elimination from 2018;
· Last September, the UK government committed £20 million to the Global Fund to End Modern Slavery.
Of course, it may the case that this is money well spent, but the Tories do seem very easygoing when it comes to giving away the odd £20million here and there. And all the while we pay one billion a week just to service the debt.
It is no wonder people are overloading on their credit cards. They are merely following the example of their government. If you are paying, say, £100 in interest every week, what’s another £20? Just a drop in the ocean. And this, remember, is a Tory government – the party that is supposed to be nasty and mean and tight with the cash. They really are a disgrace to the nation.