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UK national debt rises 8% in the past 12 months – REAL debt to GDP at 138%

Today we got the latest public finances data out of the government funded ONS and they are proving tougher and tougher to decipher thanks to the now plethora of ‘fiddles’ that need to be stripped back-out to see what’s really happening.

Something that, credit when credit is due, Stephanie Flanders over at the Beeb mentions herself today:

Even that tiny margin for error is large compared to the amount that the government can claim the deficit has fallen in the past year. There are numerous measures of borrowing listed on page 160 of the OBR’s Economic and Fiscal Outlook, depending on how many special factors you strip out of the total.

If you get rid of all of those one-offs – including a new one, related to transfers due to the Special Liquidity Scheme (SLS) for banks – then borrowing has risen very slightly between 2011-2 and 2012-13, from £121bn to £123.2bn.

For example the headline numbers look great(ish):

  • Public sector current budget deficit was £1.1 billion in February 2013; this is a £7.1 billion lower deficit than in February 2012, when there was a deficit of £8.1 billion.

  • Public sector net borrowing (PSNB ex) was £2.8 billion in February 2013; this is a £9.0 billion lower net borrowing than in February 2012, when net borrowing was £11.8 billion.

However, and it is a rather BIG however, those above numbers don’t include a couple of not so minor details. Namely the fact that the Tories nationalised the Royal Mail pension getting a one off boost to the numbers to the tune of £28bn AND the fact that the BoE is now returning interest payments they receive for the money they lend to the government created by tapping some digits on a screen (yes, this really is happening in the UK).

So what happens when you strip out the £28bn from the Royal mail pension sale (don’t forget as part of that ‘deal’ the government took on £35bn in future obligations):

However, in April 2012 the historic liabilities and some of the assets of the Royal Mail Pension Plan were transferred to Government which led to a reduction in public sector net investment and PSNB ex of £28 billion. If this one-off effect is removed then PSNB ex for April 2012 to February 2013 is actually £9.3 billion lower than in the same period in the previous year.

And what about when you back out the funny money from the BoE:

In addition, in January 2013 and February 2013 cash was transferred from the Bank of England Asset Purchase Facility (APF) to the Government which led to a reduction in public sector current budget and PSNB ex of £6.4 billion. If this effect is removed in addition to the effect of the Royal Mail Pension Plan transfer then PSNB ex for April 2012 to February 2013 is actually £2.9 billion lower than in the same period the  73.5%previous year.

So now the deficit has only fallen by £2.9bn over the course of the year when those accounting fiddles have been backed-out. Which all means that in the past twelve months the government ran a real deficit of £101.3bn, compared to the previous same period of £104.2bn – or a fall of just 2.8%.

PSNB UK march 2013(click for sharper image)

Which brings us nicely onto the debt, which despite all the above fiddling rose 8% over the last twelve months:

PSND march 2013(click for sharper image)

So the debt now stands at £1161.5bn – remember it was UNDER £800bn when the Tories took office in 2010.

Which means the level of debt in the UK stands at around 73.5% of GDP.

But before you crack open the champers because the UK still has a debt to GDP under the largely symbolic 100% level, remember this isn’t the real level of debt in the UK because it DOESN’T include all the money the UK borrowed and spent to bailout the banks.

That number doesn’t appear until page 31 of the report:

real debt of UK march 2013(click for sharper image)

Yes, you read that correctly, the real debt of the UK stands at £2175bn NOT £1161.5 – which puts the real debt to GDP in the UK at 137.6%

UK debt to GDP march 2013(click for sharper image)

Just remember there are lies, damn lies, and government debt statistics.

 

 

Link to this article: : http://www.goldmadesimplenews.com/analysis/uk-national-debt-rises-8-in-the-past-12-months-real-debt-to-gdp-at-138-10335/

Posted by on Mar 21 2013. Filed under Analysis. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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