Osborne is running a bigger budget deficit this year compared to last year – Tories ADD 40% to national debt
So we got the headlines today all saying that the UK borrowed less than expected in September and that the Tories are on course to run a smaller budget deficit this year than they did last year.
From the ONS report:
- Public sector net borrowing was £12.8 billion in September 2012; this is £ 0.7 billion lower net borrowing than in September 2011, when net borrowing was £13.5 billion
- Public sector current budget deficit was £11.2 billion in September 2012; this is a £0.4 billion lower deficit than in September 2011, when there was a deficit of £11.6 billion
- Public sector net debt was £1,065.4 billion at the end of September 2012, equivalent to 67.9 per cent of gross domestic product (GDP)
- In 2011/12 public sector net borrowing was £121.6 billion; this is £4.4 billion lower than the Office for Budget Responsibility (OBR) forecasted net borrowing for 2011/12 of £126.0 billion
This is all very well and good but it does overlook one very important thing. Back in April of this year the Tories nationalised (yes the Tories were nationalising!) the Royal Mail pension, which in effect meant that they received £28bn that went towards reducing the deficit.
Of course it also meant that the UK taxpayers are now on the hook for £36bn in Royal Mail pension payments down the road, but of course those don’t get put into the figures and merely go in the rather ominous sounding ‘unfunded’ column of the balance sheet.
From the ONS:
Comparisons between public sector net investment and net borrowing for the April to September period are affected by the £28 billion transfer received by government from the assets of the Royal Mail Pension Plan in April 2012. This transfer was foreseen by the OBR and they correspondingly included, in their forecast, figures with and without the Royal Mail pension transfer. This is as the size of the transfer is sufficient to significantly affect comparisons between 2011/12 and 2012/13. The table includes public sector net investment and net borrowing figures excluding and including the Royal Mail pension transfer. The figures excluding the Royal Mail pension transfer show that, for the year to date, public sector net borrowing has risen by 4.2 per cent, which compares to a forecasted 1.4 per cent decline for the full year.
So let’s take a look and see what the size of the deficit would’ve been so far since April had this one off payment (that is actually a massive liability) not been made:
(click for sharper image)
So at this time last year the Tories borrowed about £62.4bn. This year, when you take away that one off payment, the number is 4% higher at £65.1bn.
That’s right, Osborne who’s entire campaign platform in the UK has been about reducing the deficit, is actually running a larger deficit than he did last year.
The deficit is not shrinking but increasing from already absurdly high levels. Which means that the total debt in the UK currently stands at £1065bn.
When they came in to office it stood at £772bn, which means that in just over 2 years the Tories have added nearly 40% to the national debt.
Now that’s austerity you can believe in.
Related posts:
- UK ‘real’ Debt to GDP reaches 150% whilst the Tories ADD 32% onto the national debt
- If the economy is doing so well John Major then why did the government run a record deficit in August?
- UK National debt explodes under the Tories – up 30% since they came to office, now stands at £1004tn
- This is what happens to you when you add over 30% to national debt in two years and raise taxes
- The UK Government borrowed more this August than at any time in the country’s history
Link to this article: : http://www.goldmadesimplenews.com/analysis/osborne-is-running-a-bigger-budget-deficit-this-year-compared-to-last-year-tories-add-40-to-national-debt-8427/
Posted by Thomas Paterson on Oct 19 2012. Filed under Analysis.
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