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James Palumbo: Despite the Austerity Narrative, Public Spending Continues to Rise and Debts Continue to Grow (via Huffington Post)

Lord Palumbo of Southwark
Lord Palumbo of Southwark

I chose to talk about the country’s financial position in the Queens Speech debate last week as I believe it is central to the government’s programme for the final year of the coalition.

Current UK Government debt is approaching 100% of GDP. Household debt is roughly the same. Financial sector debt is over double this amount due to the historically large size of our banking industry.

None of this includes the off balance sheet issues such as Private Finance Initiatives and unfunded pensions. I appreciate it is a matter of opinion as to whether these should be included as liabilities of the state. If the country were to account like a business they would be. If government did account like business then they would add perhaps another 200% of GDP to our debt.

Economists differ as to our total debt burden, but on any basis it must be approaching 500% of GDP. This makes Britain one of the most indebted countries in the world.

Over the past four years the Government has made heroic efforts to combat the legacy of the 2008 financial crisis. Whilst opinions might differ as to the wisdom and effect of Quantitative Easing and other stimulus programmes, the Government has steadied the financial ship.

Full article here