Knifonomics (part 27): carnage

Here is a handy set of figures from Peter Oborne:

Let’s put these figures in historical perspective. Between 1694 (the date of the foundation of the Bank of England) and 2001, national borrowing grew from zero to £307 billion. Over the following 10 years it more than doubled, standing at approximately £750 billion when Gordon Brown left office. Between 2010 and 2015 (when the next general election is scheduled) it is due to rise to £1.365 trillion.

To put it another way, the national debt advanced by £300 billion over three centuries, during which we won and lost an empire, fought two exhausting world wars, and founded the welfare state and the National Health Service. During the five years of Coalition government – a period of cuts, retrenchment and falling living standards – the national debt is expected to grow by £600 billion, twice the amount it stood at in 2001.

Oborne’s repeated criticism of George Osborne, is that he should stop fannying around spending half his time plotting Tory election strategy, and spend all of it – and be seen to be so doing – rescuing the economy. Fair enough, and there are indeed lots of good ideas about how this might, finally, start happening, neatly summarised by a hack who would be a great chancellor, Allister Heath. Needless to say, it’s all about reducing taxation.  Or from someone who actually could be chancellor, in that at least he’s an MP, the great Douglas Carswell.

However, the figures at the moment are fairly staggering. As another Telegraph contributor, Thomas Pascoe points out, in discussion of the poor price obtained for the 4G franchise in this week’s auction:

The public finances have reached a stage at which missing revenue targets by £1.1bn, formerly enough to raise worries about black holes in the books, is no longer enough to constitute more than a 1pc variation in the total overspend for this year alone…. the fact that this number is really such a small drop in the ocean highlights quite how bad the state of the public finances are. Millions, billions, trillions. Numbers of obscene scale have become so commonplace that we have lost an ability to place them. Try it this way – in this year, according to the OBR, central government will spend £108bn more than it raises in revenue. Our government owes £2,311.6bn already, if financial sector interventions are included.

Brown really did both wreak havoc and institute a scorched earth policy of such lethal effectiveness that whoever is in government is paralysed by the prospect of the necessary measures. Sadly, it’s too late to hang him for treason.

Brown's scorched earth policy had worked
Brown’s scorched earth policy had worked
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