UK Debt

GarryF

It's almost 10 years now since the crash and I thought it interesting to look back, I see a lot of comments re: deficit & debt yet quite often a lack of understanding, below is a graph of UK debt, some important years
1979 - thatcher got in
1992 - black Wednesday
1997 - blair/brown get in and promise to stick to conservative spending plans for a term.
2001 - blair wins again, no longer constrained with the previous promise and aware that no labour government has ever won three in a row, public spending is increased drastically so that the country is now spending more than it earns even though times are good on top of rapidly increasing banking revenues.
2008 - the crash etc
                                                                                                                                               

Just to show another country who didn't make that critical change in spending in 2001, here's Australia

                                                                                                                                                 
The figures are different but the graph shows what could have been for the UK, if that downward curve on UK Debt was continued then by the time of the 2008 then UK debt would have been 30-40% lower than what it was.

To put that in context current UK debt is 81%

It should also be remembered that the 10 years running up to the crash the banks generated huge revenues for the tax man.

In addition there was a huge uptake of PFI by brown (off book borrowing)
The past year has seen a record £10.5bn, a sum which equates to 0.5 per cent of Britain’s Gross Domestic Product, spent on the annual charges.

So it's fair to say that's worth another 10% of GDP spent

So this year with the attacks on austerity (what austerity, we still spend more than we earn 9 years on) how do you explain to those who are being most penalised that it was decisions taken 16 years ago by a labour government that we are still paying for?

Is now the right time to increase public spending?

Jezza99

You can't explain it, they have been lied to about so called austerity so often that they believe it to be true. You will come across many Labour supporters who will swear blind that the evil bankers were wholly responsible for the 2008 crash, and that Brown's massive overspending and bribes had nothing to do with it.

With that level of ignorance in abundance, the truth sinks without trace.

Iain42

Very well illustrated.  You are also absolutely correct to ask, "What austerity?".  There hasn't been any austerity, but if you say something often enough, people start to believe it.

Bl4ckGryph0n

They'll never believe you and will not be happy until they can argue it is all Thatcher's fault...

Jezza99

Although to be fair, the Tories rebuttal of such a narrative has been non existent. Their communications and PR are woeful.

Iain42

Like all of our politicians, they are addicted to spending, maybe not quite as much as some others, but they still want to spend too much of OUR money for us.

fluxo

I produced this chart a little while ago:

                                                                               

What's interesting to me is that, although the two countries are different in lots of ways, the pattern of the deficits is not so dissimilar. Note: the US went into recession in the early 2000s.