13 Years Wasted… UK Government Debt Higher Than GDP For First Time Since 1961

LONDON, UNITED KINGDOM - JUNE 21, 2023: British Prime Minister Rishi Sunak departs 10 Down
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Oliver JJ Lane

So much for the Tories, who have enjoyed 13 years in power in the United Kindom under false promises of fiscal probity: UK net debt is now 100.1 per cent of GDP.

Government figures show government borrowing rose more than expected in the month of May to more than doube the same period last year, pushing total government debt to £2,567.2 billion ($3,2687,200,000,000). This mammoth figure means public sector debt — excluding that of state-owned banks — is now “provisionally estimated” to be 100.1 per cent of GDP.

As noted by the UK’s Office for National Statistics, this is the first time since March 1961 that the debt ratio was above 100 per cent.

Historically, the British national debt has fallen except in times of war.

The debt ratio hit 200 per cent during the Napoleonic Wars as the government borrowed heavily to finance military campaigns and the Royal Navy, but this was slowly paid down through the Victorian and Edwardian eras by prudent governance coupled with an era of peace and economic hegemony opening the door to serious growth. By the start of the Great War in 1914, debt had fallen to 30 per cent and was still falling.

The government had to borrow sharply again, with the debt ratio hitting 150 per cent in the early 1920s. The country had no real chance to recover its finances before the Second World War broke out in 1939, which pushed the debt ratio to near-250 per cent by 1945.

The ratio steadily fell through the rest of the 20th century until it hit a final low at the end of the Margaret Thatcher era in 1991 at just 21 per cent. It has risen almost every year since.

While the government blames Coronavirus for the historic 100.1 per cent ratio, that ignores the broader picture that the Conservative party has now had 13 years in power and, despite talking a tough game on austerity and fiscal probity, has nothing to show for it. In the whole 13 years of Conservative government, the debt as a percentage of GDP has only fallen in two years, 2018 and 2019.

As noted by a report by Sky News, the news demolishes one of the key pledges of Prime Minister Rishi Sunak, who came to power last year in a palace coup promising to use his managerial acumen to calm markets and reign in spending. The ‘five key priorities for 2023’ promised by the Prime Minister were halving inflation, grow the economy, reduce the national debt, cut hospital waiting times, and improving border control.

Halfway through the year, it is not clear that any meaningful progress has been made on any of these, in fact in most of these areas the situation is noticeably worse.

This performance leaves voters in the United Kingdom in a difficult position with an election coming. On one hand, the Conservative Party has proven itself over the course of more than a decade to be slavishly devoted to vested interests and abundantly willing to openly lie at election time and discard promises once they have acted at the ballot box.

On the other, the main opposition Labour Party is led by a Blairite social democrat who shows no promise for improvement in any of these areas, and who risks causing real damage to the country in others.

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