Fact: our debt ratio was higher during Tory years than it is now


by Paul Cotterill    
9:05 am - October 12th 2010

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The Conservatives have consistently stated that interest payments on our public debt are so high that they will spook the markets and cripple our economy.

And so, I quite like this chart showing UK debt interest payments over the last 100 years.

It shows that debt interest payments were higher in the mid 1990s as a percentage of GDP.

In other words, the Conservatives were paying higher interest payments, as a percentage of the GDP national debt, than we are now.

No need to panic then.

I also quite like this FT article about what the head of bond markets and public debt management at the OECD says:

The markets are creating a situation where countries could be forced to retrench too far and introduce austere fiscal policies that are not good for their economies as it risks stifling growth.

Now that is something to worry about.

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About the author
Paul Cotterill is a regular contributor, and blogs more regularly at Though Cowards Flinch, an established leftwing blog and emergent think-tank. He currently has fingers in more pies than he has fingers, including disability caselaw, childcare social enterprise, and cricket.
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Reader comments


Point taken, but there’s a steep little bit whizzing upwards as the graph heads to 2011.

This is, though, a good argument for taking a bit of time for sober reflection upon the best policies to deal with the problem and, importantly, how we got here in the first place. We need to ensure this doesn’t happen again.

The near-hysterical recitation of deficit doom-mongering is being used to soften us up for a touch of neoliberal entrenchment. Given a choice people would not choose such a path. Is there any hope that there’s someone in Labour who will propose such a choice?

It’s worth clicking through to read the rest of that presentation to see just what a selective use of graphs this really is…

Since we will still be running a deficit for the next five years interest payments will continue to rise back towards those earlier 4% levels according to the IFS as debt/GDP rises quite sharply still over the next 2-3 years.
Obviously bond yields may rise too at some stage from current very low real levels.

PS here is the wisdom of youth on display. Perhaps they are less keen on inheriting quite so much debt – a point which is no doubt being made on the university fee debate thread!!! (cognitive dissonance alert)

http://order-order.com/2010/10/11/maggies-children/

4. Luis Enrique

… yes, but any government thinking about how much debt to accumulate now has to be thinking about the future when interest rates are likely to be higher. I presume the higher interest payments in Tory years reflect higher interest rates, rather than higher debt/GDP? So looking at payments now, when interest rates are as low as they’re ever going to get, isn’t really the right way of thinking about the burden of debt.

That said, I agree that the debt problem is not as severe as some make out.

2. Mr Euginedes

It’s worth clicking through to read the rest of that presentation to see just what a selective use of graphs this really is…

Care to discuss how selective Cameron’s scaremongering about the value of interest payments was last week?

The graph is very relevant – and quite devastating – in that context.

This just underlines the fact that the cuts are ideological, not necessary. The Tories (with Lib Dem support) want to shrink the state. Too much of the national wealth is being spent on the people via public services. Not enough is going to the business elite. This must stop! Hence the cuts.

Not particularly accurate. When John Major left office in 1997, all financial indicators were positive.

It should be remembered that no Labour Government has ever left office without a long term trail of debt in their wake. Notably, proper Liberal Governments of earlier years knew how to run the national current account !

Labour the one that put forward cuts because the deficit was to high interest to much, how can you be expected to accept what right or wrong if the dam parties do not know.

@ cjcjc

The neocons have been saying this for the last year and half and yet bond rates have gone in the opposite direction. There might come a time many years in the future when perhaps we need to listen to them on bond rates, but for now the terms boy and wolf come to mind. If you want us to take notice when this really is a concern then stop crying wolf now.

Kevin

8
Didn’t the last proper Liberal government leave a debt payable to the USA which has only just recently been paid back?
And didn’t going to war split the Liberal party, not to mention conscription.
And the cost of that war – $35bn
And the national debt rose by tenfold.

@ Mr Euginedes

I fail to see how selecting that graph was being selective from the article in question. The last and concluding paragraph says that we are a long way from something to worry about.

“The real risk from government debt is the burden of interest payments. Experts say that when interest payments reach about 12% of GDP then a government will likely default on its debt. Chart 5 shows that the UK is a long way from that risk. The peak period for government interest payments, including central government and local authorities, was in the 1920s and 1930s right after World War I.”

Chart 5 referred to is the same as the one displayed in this article. Currently interest payments are approx 3% of GDP.

Conservatives lie a lot. They think thy were born to rule so lying comes naturally.

What we are seeing is shock doctrine. It would not mater if there was no deficit, the tories are doing what they are ideologically programmed to do. Cut spending to allow tax cuts for the rich. The global recession , caused by greedy bankers in the private sector have given them the opportunity to cut spending, and make way for tax cuts for the same greedy bankers who fucked it all up. Who says the private sector does not reward failure?

The rather stupid Lie Dems have convinced themselves, in their usual arrogant, worthy way that they are doing the right thing in going along with this rape of the poor.

Although listening to Call me Dave yesterday maybe he is rowing back from the 25% cuts his Pip Squeak Chancellor announced. Maybe he has realised the folly in this. Perhaps he has lost his nerve in the wake of the child benefit fiasco. Who Knows? Maybe they have not got a clue what they are doing.

top commment Sally!!!!

@9 – I’m not crying wolf, merely pointing out that bond yields everywhere are well below long term normal real rates. Same point as Luis @4. It seems risky to assume this will continue for ever. A different point from suggesting that they will rise if we don’t cut now…I don’t believe that as sterling can take the strain, unlike those trapped in the euro of course.

@11 – 3% now indeed. But debt/GDP will continue to rise to 80-90% of GDP through 2015, so that percentage will be around 4-5% (assuming no rise in bond yeilds) even as the deficit is cut, since the debt is still building.

so 4-5% – still a long way from what that article was suggesting is a problem.

If Bond yields have risen then that will more than likely be because the economy is no longer in a funk. Tax income will have increased, the economy will be larger and as a result then at that time when the debt is rolled over it will be a smaller fraction of the UK GDP.

Most of the UK Gov debt is long term, denominated in pounds and most of it is borrowed from local savers. This is a good situation to be in if a government is carrying debt.

Post WW2 US government debt was 175% of GDP. The US didn’t pay back the principal the debt shrunk as a % of GDP because the US economy grew. The US gov had no probs finding lenders when it rolled over the debt.

This is a completely and utterly a manufactured crisis to scare us into accepting shock doctrine like attacks on our public services and welfare provision. It is nasty, brutish and totally unnecessary.

Kevin

All that may be true.

Check out Edmund Conway’s report of the IFS analysis of Alistair Darling’s March budget.

the Institute for Fiscal Studies calculated, based on Treasury figures in the Budget , that debt interest payments will climb to £73.8bn by 2014/15……– 10.6pc of total tax revenues …….. The news is likely to cause consternation in the markets – as well as among households – since many of the ratings agencies regard a country as being in growing danger of a fiscal crisis, and a likely downgrade, once its debt interest payments exceed 10pc of tax revenues.…….

http://www.telegraph.co.uk/finance/financetopics/budget/7521426/Budget-2010-Interest-bill-on-UK-government-debt-set-to-soar.html

OK here goes;

@5 BenM

What Mr E was trying to point out is that the graph is very selective as it doesn’t show how the total national debt has shot up at the greatest peacetime rate under Labour.

The interest/GDP chart is also VASTLY misleading a it only deals with NOMINAL interest rates, not real ones – it is not inflation adjusted. If you inflation adjust the data the results you get are very different – real affordability shows interest payments skyrocketing. You basically can’t compare interst payments when nominal rates are 0.5% and 15%, which is what this chart does.

As such, I’m hardly surprised the Labour types often use such charts to show how the simply massive debts they ran up aren’t that much of a problem, when in real terms they will act as a roughly 1% drag on GDP growth through increased interest payments by 2015. That and the the position has deteriorated vastly under Labour. I can run through the maths for you people if you want.

@9 Oxford Kevin

Bond yields aren’t low because of confidence in the markets. They are low because central bank rates are basically zero and governments (through their CB’s) are monetizing their debt through QE. Of course bonds will rally if banks print money to buy government debt. When they come to unwind these positions though bond markets are unlikely to look so pretty.

@11 Oxford Kevin

Normally people tend to look at total debt/GDP ratio at 90% acting as an approx 1% fiscal drag.

Also, the affordability ratio for interest payments more appropriate….which is tax reciepts/interest payments. You can look at this roughly as 3x GDP/interest payments.

@12 Sally

Are you for real, or Kerry McCarthy in disguise?

Oh, and lets not forget how much of that historical debt was wartime, not peacetime.

New Labour managed to achieve the biggest rate of increase of both the national debt AND interest payments on it (despite the lowest interest rates recorded in the UK….ever) outside of war spending.

@ 12

‘sally’ are you having another bad day ? Definitely feet up time for you old girl !

ignoring interest payments, public net debt is still below average when compared to the last 100 years. The post linked to by libcon points this out. So both debt and interest payments are below historical averages.

The main reason for Bond yields being so low is that there is so much savings looking for somewhere to go, QE adds to this but even after QE stopped the gov has still had no probs raising the money for bonds in the market at very low interest rates. The corporate sector and private savings are looking for somewhere to invest but because of the threat of fiscal tightening and the potential slow down the savers are having trouble seeing investment opportunities in the private sector and are dumping their money into bonds.

Thanks Tyler for introducing some realism into this debate. You put the whole thing very pithily in your own blog back in May:

Just to put the deficit into perspective for you lefties out there, who seem to think that overspending by £168bn a year is a-ok, perfectly sustainable and dare I say it, even welcome.

That amount of money is more than all income tax revenues. It is not far away from all public sector pay and pensions, or the welfare bill.

So choose – double all taxes, cut 90% of the public sector, or 85% of all welfare payments.

*That* is Gordon Brown’s real legacy.

http://www.tdsays.blogspot.com/

Interestingly, Rachel Sylvester reports today behind the Murdoch paywall that an aide to Ed Miliband has stressed that the shadow gov is no longer “in deficit-denial territory”. About time too.

Do you really not know the difference between the amount of debt and the rate of interest paid thereon?
Your headline says “Fact: our debt ratio was higher under the Tories than it is now”
You “prove” this with a graph of interest payments.
FAIL
The ratio of debt to GDP was higher when the Tories took over in 1951 because the debt:GDP ratio had increased *after* the end of WWII thanks to Attlee’s Labour government. It appears to peak in 1947 because in 1948 Attlee devalued the £ by one-third, reducing the value of all pre-existing debt in the hands of foreigners by one-third. Actual debt continued to increase.

“In other words, the Conservatives were paying higher interest payments, as a percentage of our national debt, than we are now.”

When writing about economics it would help to be vaguely informed about economics.

That chart shows interest paid on the national debt as a percentage of the economy, not interest paid as a percentage of the national debt.

“so 4-5% – still a long way from what that article was suggesting is a problem.”

Well, no, not really. Ken Rogoff’s recent work (This Time is Different) shows that default becomes likely when interest payments go over around 10% of GDP. Essentially, the pain of default becomes less than the pain of paying the interest.

And we’ve got the national debt even on current cutting plans going to get up to 80% or more of GDP….and, as is pointed out, interest rates are at historical lows. If interest rates double (8% nominal rates is hardly unusual now, is it?) then, well, you see the problem, yes?

As to current debt being lower than the past century;s average: well, yes, but we also bankrupted the country twice fighting World Wars. What’s the excuse this time?

@ 18 Tyler

‘The interest/GDP chart is also VASTLY misleading a it only deals with NOMINAL interest rates, not real ones – it is not inflation adjusted. If you inflation adjust the data the results you get are very different – real affordability shows interest payments skyrocketing. You basically can’t compare interst payments when nominal rates are 0.5% and 15%, which is what this chart does.’

Ok do the sum – inflation adjust the data and show how vastly misleading it is.

Debt accrued by end of WW1 ~180% of GDP. Debt accrued by end of WW2 235% of GDP. We are pretty much looking at half this level by end of great recession with proper fiscal stimulus.

Kevin

Tim @24: In my defence, I didn’t write that sentence (see original at http://thoughcowardsflinch.com/2010/10/11/dont-panic/). That sentence has been ‘edited in’. As has the last para. Oh, and the first. I didn’t even know it was here till just now. Heh ho, not to worry, I give LibCon carte blanche to cross-post, so I must grin and bear now and then.

On the question of interest rates in the future, this is a comment from the piece at my place:

‘And if (when) rates rise from their current historic lows? – Don’t panic. The coupon rate on existing debt is fixed, right? So the rates paid on new debt would go up, but by then we oughtn’t to be issuing so much. TIPS yields will go up with inflation, but they’re a small part of the total I think (and ‘we’ can always manipulate how inflation is calculated anyway can’t ‘we’…)’…..’

28. Luis Enrique

Paul @27

yes, that comment you reproduce makes a good point, although while it’s probably true to say “but by then we oughtn’t to be issuing so much”, it’s worth remembering that issuing debt isn’t just about new net lending (i.e. running a deficit) it’s also about rolling-over existing debt that has matured.

tim waster

“When writing about economics it would help to be vaguely informed about economics.”

Yes, well that applies to you too. Just regurgitating Adam Smith, free market claptrap does not make you informed either.

“tim waster”

brilliant, absolutely brilliant

really, how do you think them up?

Luis @28:

I think the follow up comment to that is also relevant:

“Yeah I know the coupon is fixed for most government debt but there is the refinancing issue. Against that is the long average maturity of UK debt. I don’t think there is reason to panic – I’m just wondering how much of a negative it will be.”

Bear in mind as well that we are currently re-financing our maturing debt at lower rates than we were paying before, so as long as bond yields stay as low as they are this must have a beneficial effect on our interest payments in the medium term.

33. Luis Enrique

Paul

yep, so you could interpret that as something of a ‘time bomb’ (when all that long-dated debt will need rolling over) depending on what interest rates prevail at the time, but as previous at least by then we shouldn’t be issuing too much new net debt. I’m still in the “don’t panic” camp, just nit picking really. I guess while I agree some righties exaggerate the danger, I think some lefties are far too sanguine about the debt.

@22 Flowerpower

Thanks – I really must update my blog more often. Got caught up in a move to Johannesburg.

@25 David

If you can provide or find me a source for NOMINAL GDP and NOMINAL national debt then no problem. I can get inflation data back to about 1980 and I can probably even adjust for the real effective exchange rate. I used to have this on a bloomberg chart but it got wiped in my move. I work on an interest rate/inflation trading desk so kind of know what I’m talking about.

@26 Oxford Kevin

So fiscal imprudence by Labour whilst pumping up a massive credit fuelled bubble to run up massive debts is OK because it only cost half as much as fighting world wars?

@27 Paul Cotterill

Coupon rates are fixed, true. They also don’t matter, as the long term cost of funding that debt still sits at the yield to maturity. Otherwise AAA rated countries would just issue zero coupon bonds wouldn’t they….I don’t want to go into the bond maths here but just trust me on this one. it isn’t simple to account for the true cost of funding for the goverment but as a rule of thumb;

COF = (yield of weighted average maturity – BOE base rate) x (weighted notional of bonds outstanding)

Gives a decent approx.

Tyler – I did not say that. Stop with the straw man already!!!

Don’t see how pointing out that the debt/deficit problem we face now, caused by Labour’s massive spending increases and resultant structural defict is a straw man. In any way.

The original article was in essence trying to point out (uusing a slightly spurious chart) that the debt Labour run up isn’t a problem and new deficit spending isn’t either. I’m pointing out it is, and the reasons why the chart points to misleading conclusions.

Maybe try arguing that point instead?

Of course it is a straw man, because you are putting words in my mouth that I did not say. Can you accept that?

What Mr E was trying to point out is that the graph is very selective as it doesn’t show how the total national debt has shot up at the greatest peacetime rate under Labour.

That’s because the graph is looking at interest payments as a percentage of GDP.

Don’t complain just because you’re not getting the graph you’d like to see.

And even if you did look at a graph just looking at debt as a % of GDP – you’ll see that it actually fell over Labour’s term. And would Tories have done things differently? Would they have not saved the banks? Didn’t they pledge to match Labour spending?

OK, lets just look at your comment @26 again and really pull it apart.

You are implying that debt/GDP of half wartime levels is fine?

Let us not forget though that real debt/GDP is not around the 70% level, as all PFI/public sector pensions are off balance sheet, so real debt/GDP (all liabilities) is more like 250-300% now, whilst the country didn’t have these massive OB liabilites back during the two world wars.

How are you left Kev?

Still no acceptance that you have used a straw man !!!

@ 38 Sunny Hundal
I’m not complaining because it’s not the graph that I should like to see – I’m complaining because it is NOT the proof of the ridiculous headline that the author (or maybe the editor in view of Paul’s disclaimer of the whole first paragraph of the article) claims that it is.

#7 Ted

Not particularly accurate. When John Major left office in 1997, all financial indicators were positive.

Bollocks. I suggest you look at the figures rather than simply making them up. From 1997 to 2002 debt went down and (as a % of GDP) was lower just before the crash than it was in 1997. Consequently interest payments went down from 1997 to 2003 and just before the crash were still far lower than in 1997.

Yet the Tory years had the benefit of £66bn of oil revenues and a similar windfall in privatisations, which the Labour years did not have. In 1979 the debt was 47% GDP, in 1997 it was 43% but without privatisations it would have been 52%. In 2008 debt was 37%. Brown had paid off debt and significantly increased GDP. Thatcher/Major simply increased the debt with ideologically created recessions.

The fact is that the Tories are crap at running the economy and have to resort to selling off the family silver to try and avert financial crisis.

I’ve fixed the text, that was a mistake – although the graph is still accurate and had the right axis.

john77 – sorry, what?

44. Flowerpower

Richard Blogger

the Tory years had the benefit of £66bn of oil revenues and a similar windfall in privatisations, which the Labour years did not have.

Mmm. Windfall Tax on utilities (£5bn), 3G auction (>£22bn), and though the Tories may have flogged off some of the family silver, it was Gordon Brown who flogged off 395 tonnes of gold, albeit at the bottom of the market. And there was QinetiQ.

And all that was back in the days when 30 billion could buy you more than a bag of chips.

@38 Sunny

Graph I wanted to see? No, its a meaningless graph…which does not compare like with like as it uses NOMINAL not REAL interest rates. I.e. it does not account for inflation, which erodes the real cost of debt. Nor does it account for cost of short term funding.

The graph of debt/GDP (which Paul Cotteril helpfully links to) shows that it shoots UP over Labour’s term. It only fell to 2001 whilst Labour were following the previous Tory plan. Thereafter it went ballistic as Labour ran deficits of 3% or more every year till we hit that peacetime record of 11.8% of GDP.

Epic fail Sunny.

@40 Kevin

Please enlighten me which straw man you allege I am talking about.

@41 John

Totally correct – the author is trying to make a point which is not bourne out by fact. We could easily and truthfully say that Labour left the UK with a higher debt/GDP ratio than than the last Tory government – and there are no world wars to factor into that.

We could also just strip out year on year non-military spending as a % of GDP (better still, as a ratio vs tax reciepts) and watch that go atmospheric under the last Labour government as well.

@44 Flowerpower

*claps*

Point well made.

You forget though that oil revenues haven’t stopped and the tax take from the city also underwent a massive increase in the same time. Plus the extension of credit allowed a huge boom in GDP……so even though debt/GDP went down, debt was still increasing at a rapid rate. Any drop in the GDP growth rate…..a recession for example….and suddenly your debt/GDP ratios look less than rosy

This

@26 Oxford Kevin

So fiscal imprudence by Labour whilst pumping up a massive credit fuelled bubble to run up massive debts is OK because it only cost half as much as fighting world wars?

Where did I say it was ok?

Sunny – you can read.
I have said TWICE that the graph does not support the headline.
While it is true that the debt ratio was higher in 1951 than it is now, that was because the postwar Attlee government increased the National Debt instead of paying off the debts incurred during the war. They also left a legacy of high inflation so that the Tories had to increase interest rates to persuade anyone to lend to them to refinance maturing debt so the graph of interest payments:GDP does not reflect the improvement in the fiscal balance and debt:GDP ratios.

@ 46 Tyler
Add the distortion to GDP because it includes most public sector activities at cost not value so when Gordon Brown gives public sector workers pay rises in excess of productivity or inflation that increases reported GDP.

@ 18. Tyler

Ok here goes again…

Considering Cameron’s hysterical remarks in his speech and the TV studio’s last week about the nominal value of interest payments (without any context) – why is showing a graph which gives context to those payments “selective” while Cameron’s hyseria isn’t?

Your rather bewildering attempt at rebuttal didn’t really answer my point.

@ 24 Tim Worstall

As to current debt being lower than the past century;s average: well, yes, but we also bankrupted the country twice fighting World Wars. What’s the excuse this time?

Neo-liberal economics and the banks bankrupted us.

Have you been living in a cave since 2006?

@ 42 Richard Blogger

The fact is that the Tories are crap at running the economy and have to resort to selling off the family silver to try and avert financial crisis.

***Standing Ovation for that man!!***

This is the truism about economics: it is Right Wing governments that weaken and destabilise economies.

@ BenM

The graph is selective as it does not compare data on a like for like basis. It’s about as useful as a chart of interest rates, which tells you nothing about debt or spending levels. It’s trying to make a particular point which, if you take the true costs of funding the national debt becomes invalid.

The Total debt/GDP chart is on a like for like basis, as all the data is year on year – it is independent of inflation, growth rates and interest rates. The INTEREST on that debt is NOT independent of interest rates and inflation, so a chart of this (interest payments/GDP) only becomes valid once you normalise for these variables……which gives you a totally different looking chart.

Put a different way, effectively Paul Cotterill is saying that the pound was worth the same today as it was in 1980, which is not true because of inflation. Had inflation been zero for the life of the chart above, it would be totally correct. It wasn’t so it isn’t though.

Without wanting to sound rude, I’m making the assumption you are not aquainted with the difference between nominal and real interest rates. I hope i’ve explained clearly enough now though.

Try Fig.1 in this for a graph showing Britain’s public debt as a percentage of GDP for the years 1946 through 2000:
http://www.ifs.org.uk/bns/bn26.pdf

UK Total Government Debt: Current – Historical – As Percent GDP
http://www.ukpublicspending.co.uk/uk_national_debt_chart.html

Tyler – I’m afraid you’re in fantasy-land again.

First, our national debt ticked up slightly after 2001, but it was entirely sustainable and way more prudent than where the rest of the western world was. It was very much within the EU demands of fiscal responsibility.

It shot up for various reasons:
1) bailing out banks
2) automatic stabilisers as a result of the deep recession.

Would the Tories have done anything differently? Highly doubt it. Given the fall in tax revenues was so swift and large – this was entirely expected. And still way within the danger-zone.

So stop scare-mongering and exaggerating like most right-wingers, doesn’t make you look any credible.

@Sunny

Are you serious? Can you not read a chart?

In 2001 debt/GDP was just over 30%…..now it is over 55%. Try clicking on one of the many links to ukpublcispending.co.uk which show exactly how Labour managed to double our debt/GDP ratios. Or how it has doubled in nominal terms since Labour came to power as well.

Thats before we consider that Labour/Brown were running a 3% or more budget deficit every year 2001 on, despite good growth. Prudent my ar$e.

1. Bank bailouts have added 10bn to the deficit according Darling’s treasury report.
2. By automatic stabilisers you really mean 9% of GDP structural defict/public overspend?

I don’t know if the Tories would have done anything different. I DO know they are doing the right thing now by cutting spending. Running massive deficits and building up huge long term debts definitely lowers long term growth and there is no conclusive proof that it saves economies – it hasn’t worked in Japan and isn’t working in the US. Basically all deficit spending does is kick the can of economic hurt further down the road at the cost of increasing long term problems.

I know you think Tories eat babies and Labour can do no wrong, but open your eyes – 2001 onwards Labour made a total hubristic mess of the british economy.

@52 BenM

“it is Right Wing governments that weaken and destabilise economies.”

Is that why it all went tits-up under New Labour?

Joking aside, that’s a pretty sweeping statement. While it may be good at stirring the trolls I’m not sure it gets us very far, after all the global economy has such a strong influence now its questionable how much individual governments can do.

More important is how they can steer us through the best and worst turns of the global economy so we benefit where we can and are protected when times get hard. The Coalition are following an ideological route to small government and fewer protections for the most vulnerable. They want to entrench power, wealth and privilege which is hardly surprising looking at who they are. Sadly all we get from Labour is a watered-down version of the same so far.

Brown’s”Golden Rule” involved borrowing to replace everything that wore out.
He called it prudent. I called it economically illiterate.
Sunny – how much of the rise in government debt in 20-01-7 was due to bailing out banks? How much of the £140bn budget deficit bequeathed by Brown/Darling is bailing out banks?
There were two bust banks – Bradford & Bingley and Dunfermline Building Society. Northern Rock had a surplus of assets over liabilities of over £2.5 billion. Lloyds Bank reported negative Goodwill of £15 billion on the acquisition of HBOS – ie itts net assets were £!5 billion more than Lloyds paid to acquire it.RBS got into a mess but it wasn’t bust. The emergency Rights Issues were because the Treasury decided to change the rules overnight and demanded that they have more capital

53 Tyler

Not a clue what you’re wittering on about.

The graph is really just showing the nominal interest paid as a % against GDP in that year.

As I said, last week Cameron used the same nominal interest argument to scare people like yourself.

Which is why the graph is very relevant.

Coupon rates are fixed, true. They also don’t matter, as the long term cost of funding that debt still sits at the yield to maturity. Otherwise AAA rated countries would just issue zero coupon bonds wouldn’t they;

Sure, the cost of funding is the YTM not the coupon rate, but it still remains constant (at least for the govt) from the time of issue to the maturity date.

In 2001 debt/GDP was just over 30%…..now it is over 55%.

Err – yes, and I pointed out why that was. You still haven’t explained what the Tories would have done to prevent this. Would they have avoided nationalising and bailing out banks? Would they have stopped letting automatic stabilisers kick in?

Weren’t they also against the bank bonus tax, and 50%, which raised lots of money? How would they have plugged the deficit earlier, please enlighten me?

As for the chart – it clearly talks about interest payments as a% of GDP – which is the main thing we have to worry about. As long as we can service the debt there is no need to panic.

Amusingly, none of you Tories want to admit that…

It is a little off topic, but surely pertinent to point out that, during Labour’s period in office, it wasn’t just public debt that rocketed. Private debt, both secured and unsecured also went through the roof.

McKinsey found, earlier this year that, when private and public debt are considered together, the UK’s total debt represents 449% of GDP, a level not far behind that of Japan and ahead of Spain.

http://www.ft.com/cms/s/0/99b57662-012d-11df-8c54-00144feabdc0.html

Since the interest paid on private debt will not have fallen nearly as far as the interest on public debt, the more of the economy’s total debt burden is privately held, the higher the proportion of GDP that will be used repaying all forms of interest.

“Is that why it all went tits-up under New Labour?”

New Labour were runing tory policies. Deregulated banking, let the rich fly like a bird.

Remember the tories were saying 2 years before the shit hit the fan that the govt should deregulate banks more. Wow, what wibble that was.

BenM,

On your Cameron point, that his out of context alarmist remarks justify an out-of-context non-alarmist graph, why do two wrongs make a right?

I may not be economically literate (or functionally literate to judge by the first draft of this comment…) but I can see that the other graphs on the source page do show rather different pictures.

@63 sally

That was my sadly ironic point.

7. Ted

‘ Notably, proper Liberal Governments of earlier years knew how to run the national current account ! ‘

Is this supposed to actually mean something? The government do not run the current account. The current account captures our international trade and since we have a floating exchange rate the government have no control over it.

@ 4. Luis Enrique, it is a good point but only relevant if debt has a short-dated maturity. The wonders of inflation over time ensures there is no difficulty rolling over long-dated debt. Britain for centuries has never paid off its national debt. Inflation erodes it.

18. Tyler

OK here goes;

@5 BenM

‘ The interest/GDP chart is also VASTLY misleading a it only deals with NOMINAL interest rates, not real ones – it is not inflation adjusted. If you inflation adjust the data the results you get are very different – real affordability shows interest payments skyrocketing. You basically can’t compare interst payments when nominal rates are 0.5% and 15%, which is what this chart does. ‘

Tyler, WTF are you talking about. Nominal interest rates and the real interest rate have nothing to do with that chart. If nominal interest rates were higher because inflation was higher nominal GDP would be higher too. The chart shows the interest payments budget as a percentage of GDP. The real interest rate that the government are currently borrowing at is almost zero. We are borrowing cheaper than at any time in our history.

67. alienfromzog

@Tyler

It’s one thing to argue about economic theory but before you do you need to get your facts straight – you wrote:

“Are you serious? Can you not read a chart?

In 2001 debt/GDP was just over 30%…..now it is over 55%. Try clicking on one of the many links to ukpublcispending.co.uk which show exactly how Labour managed to double our debt/GDP ratios. Or how it has doubled in nominal terms since Labour came to power as well.

Thats before we consider that Labour/Brown were running a 3% or more budget deficit every year 2001 on, despite good growth. Prudent my ar$e.

1. Bank bailouts have added 10bn to the deficit according Darling’s treasury report.
2. By automatic stabilisers you really mean 9% of GDP structural defict/public overspend?

I don’t know if the Tories would have done anything different. I DO know they are doing the right thing now by cutting spending. Running massive deficits and building up huge long term debts definitely lowers long term growth and there is no conclusive proof that it saves economies – it hasn’t worked in Japan and isn’t working in the US. Basically all deficit spending does is kick the can of economic hurt further down the road at the cost of increasing long term problems.

I know you think Tories eat babies and Labour can do no wrong, but open your eyes – 2001 onwards Labour made a total hubristic mess of the british economy.”
=====

Ok. Try these links:
http://tinyurl.com/38wgosq
http://tinyurl.com/36cjfyh

1. UK total debt as a percentage of GDP year on year:

1996 – 41.20%
1997 – 41.92%
1998 – 40.14%
1999 – 37.86%
2000 – 35.37%
2001 – 30.57%
2002 – 29.33%
2003 – 30.45%
2004 – 31.82%
2005 – 33.81%
2006 – 34.92%
2007 – 35.74%
2008 – 36.25%
WORLD-WIDE ECONOMIC CRISIS
2009 – 44.19%
2010 – 53.15%

So up until the economic crisis, total debt as a proportion of GDP was ALWAYS lower than 1997. The explosion of the debt of that point was due to the increase of benefits payments and collapse in tax receipts that occurs in a recession. And this was the biggest economic shock since the 1930s.

2. Up until 2008, there was only two years when the deficit exceed 3%. You may wish to argue that countries should not run deficits in so-called ‘good years.’ That’s fine but three facts are necessary to note before you make that point;
a) In 2008 the UK’s national debt was one of the lowest in the developed world and now it’s in the middle
b) No UK chancellor, of EITHER party has run sustained budget surpluses
c) No other country was running sustained budget surpluses.

So what you are saying is that GB should have done something that has not been done historically, is not done internationally and was not necessary because Britain debt was totally manageable.

3. ‘Structural deficit’ actually is quite a tricky concept. Not sure where your 9% figure comes from as that’s the total fiscal deficit. This article is very helpful: http://tinyurl.com/3yksuld
To summarise, structural deficit is a mathematical construct.
In the economic cycle, at times of recession, tax receipts will fall and benefit payments will increase and hence a deficit at this time is off-set by the theoretical surplus in the upside of the economic cycle. The structural deficit is the ‘extra borrowing’ on top of this that the government has. The major problem with the calculation is that it depends on the GDP growth level and the trend GDP growth. As anyone who reads any newspaper article on economics knows the estimation of growth and the calculations of past growth change massively as more data comes. Hence the estimate of structural deficit is massively variable.

But it’s not even that simple because, the government is such a huge part of the economy, and therefore the amount of taxation and spending has a significant impact on the economy and hence can change the GDP thus changing the calculation again. If severe austerity causes a collapse in growth (see Japan 1990s and probably Ireland now) then the structural deficit gets worse.

3. If we take George Osbourne at his word then they would have done things different in 2008, and we may have had a true 1930′s-style banking crisis and that is the real nightmare, much worse than a Greece-style crisis which is as bad as it is unlikely in the UK. Not to mention the lack of fiscal stimulus.
Furthermore the idea that cutting now is the right thing is not anywhere near certain. There are Nobel prize winning economists lining up to explain why the Tory policy is wrong.

4. Oh and finally, it is true that in cash terms that the national debt doubled 1997-2009. That is a complete ridiculous statement, by the same measure the nation debt trebled between 1979 and 1997.

5. If you want to argue that the state should be smaller that’s a reasonable argument, I disagree but that’s a different debate. What the Tories are doing is supplanting economics with ideology. Some cuts/tax increases are necessary as the deficit is clearly not sustainable in the long term but there is no need to panic into a demolition of state. Unless of course that’s actually what you want to do. There is a very real danger that cutting too much, too fast will destroy growth which has two effects economically; firstly in makes us all worse off and secondly it may mean that the deficit actually gets bigger. That’s quite apart from the very strong moral argument that what Osbourne is doing is punishing the poorest and most vulnerable in society.

AFZ

@59 BenM

Cameron’s argument was slightly different – that the nominal amount was too much in comparison to other nominal spending.

I was “wittering” on about why you can’t compare interest payments to GDP on a year on year basis as a reliable measure of debt as other variables are changing.

@60 Andrew Adams

The cost of funding to the government does actually change and has to be accounted for. Essentially, despite the coupon being fixed, as interest rates change the value of the debt changes, represented in the upfront cost of the bonds.

@61 Sunny

The Tories weren’t in government though, were they? Hard to blame them for things they didn’t do. What they are doing now has been made necessary by Brown and Labour’s mess. Whilst no-one could have predicted the exact nature of this recession easily, it was irresponsible (at best) to assume that growth would continue unabated forever, and increasing levels of deficit spending in good times were justifiable. Labour has left the UK spectacularly unprepared for this recession.

Then you go on to do exactly the same thing by saying we shouldn’t worry about debt as interest rates are low. What if interest rates go up for any reason? They might not be low forever, and what look like lowish interest payments now are only so because of ultra low interest rates.

You Labour people don’t want to admit that the huge pile of debt Brown ran up actually could cause a crisis, but will definitely slow down growth and force spending cuts in other areas as spending has to be diverted to interest payments.

@62 GeorgeV

Entirely correct. Japan’s stated national debt includes most of their pension liabilities etc. The UK only has (had?) such low public debt as so many things were kept off balance sheet. Specifically pensions and PFI. Once accounted for, the Uk has roughly as much debt as Japan. Once private debt is included the UK actually has more.

@66 Richard W

“Tyler, WTF are you talking about. Nominal interest rates and the real interest rate have nothing to do with that chart. If nominal interest rates were higher because inflation was higher nominal GDP would be higher too. The chart shows the interest payments budget as a percentage of GDP. The real interest rate that the government are currently borrowing at is almost zero. We are borrowing cheaper than at any time in our history.”

You are quite wrong. Nominal GDP is not directly affected by interest rates. It is just a total value of GDP. Nominal and real interest rates DO affect interest payments though. If Interest rates doubled tomorrow, GDP wouldn’t change but your chart would. Understand?

As I say to Sunny above, the terrible state of public finances are masked by super low interest rates. People like you and Sunny can go “it’s not that bad as the interest payments are manageable”. You make the assumption that interest rates will stay super low though, which is a pretty stupid one to make. No, I take that back – it’s totally moronic.

@67 AFZ

Well argued but….

As Geroge V so correctly points out, stated national debt is not a good indicator of true liabilities as so much has been kept off balance sheet. Though it isn’t in bond form the government is still obliged to pay these things, and it comes from taxation again so it can be counted as debt. I’ll try and find figures for you (but all are approximations) but debt/GDP figures don’t look nearly so rosy in real liability terms.

PFI alone adds about 250bn to the national debt, so about 15-20% of GDP. Pensions are a massive number, in the trillions somewhere but hard to quantify.

Structural deficits are hard to quantify, as you say. What isn’t hard to see though, is that Labour were spending too much. Taking out the “automatic stabilisers” spending was still massively outstripping growth of revenues, let alone when revenue growth reversed.

Your point about Nobel prize winning economists……you mean Krugman, right? The same Krugman that wrote in the NYT in 2002 that the best solution to the post Nasdaq recession was to (and I quote) “inflate a housing bubble” so consumers can borrow against their houses to boost consumption. How did that work out? I do find it a little crazy that these guys think a greater expansion of credit is the solution to a problem created by too much credit…..

@ Alienfromzog
Thank you for answering my rhetorical question to Sunny
Darling says the “bailout” of Dunfermline Building Society and B&B adds £10 billion to PSBR – so just 7% of the total
The other 93% is down to Brown’s profligacy.

Tyler -

“the huge pile of debt Brown ran up”

This sort of talk is going to come back to haunt the Tories eventually, because plainly they’re running up a huge pile of debt themselves by borrowing huge amounts of money over the next few years. It’s not their fault of course – the depth of the recession means there’s no way around the fact that we need to borrow heavily at the minute. But then Brown ran up *his* huge pile of debt for just the same reason. (Unless, absurdly, you think allowing debt levels to reach 36.25% of GDP constitutes running up a huge pile of debt.)

As for this business about this chart and nominal interest rates etc.: can you pin this down for us please? Are you saying:

1 – this chart doesn’t show what it claims to show (i.e. the percentage of GDP spent on debt interest payments year on year), because it’s based on faulty sums. In which case could you maybe indicate, however roughly, what you think the actual percentage of GDP being spent on debt interest payments is at present, and how that compares to previous years?

2 – this chart *does* show what it claims to show, but percentage of GDP spent on debt interest payments each year is a poor measure of the affordability of debt. In which case can you explain why this is? The affordability of *other* forms of public spending, after all, clearly has to do first and foremost with the percentage of GDP we have to spend on them. I take your point on what happens if & when interest rates go up, but you seem to think there’s more to it than that?

71. alienfromzog

@Tyler,

Thank you.
I think the jump to PFI and pension liabilities is slightly feeble side-step.
1. PFI is not debt in the normal sense because a large part of the PFI deal is on-going running costs. (Whether PFI is a good deal or not is another matter)
2. All developed countries have the same pension liability issues and how bad they are is a very complicated question.

Your use of the word ‘massively’ is interesting. In which year prior to 2008 did spending massive outstrip revenues?

In terms of Nobel Prize winners, I am always nervous of arguments that appeal to authority. However, I am not an economist, just an interested amateur so I am very conscious of my limitations. To answer your question though, I prefer Jospeh Stiglitz. This article from the independent is, I think, worse a read: http://tinyurl.com/2euy2c7

@John77

WHAT?
£10bn was the direct cost of the banking bail out. So the rest of the deficit in 2008/9 and then 2009/10 is made up of the difference between revenues and spending. Spending increased during the recession and revenues collapsed, primarily the tax-take from the city but also from other sectors of the economy. A relatively small part of the spending was deliberate fiscal stimulus which was necessary to prevent a worse crisis (feel free to argue about this). The rest is the so-named automatic stabilizers.

Which bit exactly is ‘Brown’s profligacy?’

AFZ

P.S. Wow, at least this post is shorter than the last. Phew.

@70 G.O.

Chart shows the amount is spent on interest payments as a ratio to GDP in cash terms only. The interest payment on govt debt DEPENDS on interest rates. So you cannot compare the CASH interest payment (interest dependent) against GDP (not interest rate dependent) for different years. It’s simply a meaningless number.

For example, lets say interest rates double overnight. The interest rate/GDP number would double instantly. So paying 5% of GDP in interest in 1980 (when rates were 14%) is NOT comparable to paying 3% of GDP in 2010 with rates at 0.5%. See what I’m getting at?

So, the chart does show actual cash spent on interest, but the point I am trying to make is that it is unfair, simply not valid, to compare different years on that basis without adjusting for interest rates and inflation, the latter acting to reduce debt. The article aimed to show that interest payments are lower now than in other periods – I make the point that this is ONLY the case because of super low interest rates, which can easily normalise.

Roughly speaking, every 0.5% on base interest rates will increase the cost of funding UK debt by 0.5-1% of GDP. It is also worth noting that debt interest payments are set to hit about 70-80bn a year by 2015, roughly doubling current deb interest payments, so even with a total elimination of the deficit Labour’s legacy will still be us spending about 6% of GDP on interest payments…..and that assumes interest rates stay pretty static.

Then people like Sunny have the gall (or sheer stupidity) to say this isn’t a problem and we should spend more!

Japan is the ultimate example of long term low rates combined with deficit spending. They’ve had little or no growth since 1980 and they have so much debt that most income tax revenues go towards funding the interest payments on it – despite super low rates. If rates go up in Japan they are effectively insolvent just trying to pay the interest on their debt. And all thesee Krugmanite Keynesians are actually advocating this as a solution…..

@71 AFZ

1. PFI is still a liability, just not debt. Becase of that PFI avoids sitting in the “debt” column of the govt’s accounts (which just show gilts), but can be treated as the one and the same.
2. Many countries have part or fully funded public pensions, sitting as reserved income from government debt. Japan again a good example, which acocunts for much of its 250% debt/GDP ratio. Saying debt is low and ignoring vast pension liabilities is a bit of a cop out.

Ferguson and Krugman are having it out today in Seoul. Niall makes his point very well….”markets are fine today….till theyare not fine” in response to Krugman (and Sunny’s) argument that interest rates are low so more debt/stimulus should be enacted.

Brown’s profligacy was increasing spending significantly more than GDP growth(including various windfalls) whilst also increasing tax rates, and massively expanding the sie of the state and its share of GDP. This left the country unable to react fiscally by stimulating or cutting taxes whilst also shifting the burden of taxation to a smaller private sector given the inability to reduce the state sector at the same speed.

74. alienfromzog

@Tyler
“and massively expanding the size of the state and its share of GDP”

In 1997 the public sector was 38.35% of the UK GDP. In 2008 it was 39.75%. So is this the massive expansion of the public sector that you’re talking about?

AFZ

Just to be clear, the figures I cited in my previous comment were about total debt, public and private. So the figure includes mortgages and credit cards as well as the public balance sheet plus all the things which arguably ought to be on the balance sheet but aren’t, like PFI and pensions.

The point is surely that, on this measure, the UK and Japan both have about 450% of GDP in debt liabilities. But Japan’s public debt represents about 250% of GDP with the remainder being private debt. The UK’s debt, by contrast is nearer to 100% of GDP – which means that private debt equals 350% of GDP.

So, although the public finances in the UK are in better shape relative to Japan, the same may not be said of the whole UK economy because private debt will pay higher rates of interest than public debt. So the proportion of UK GDP that goes towards paying the interest on goods and services whose benefit has already been received will be greater than Japan’s. And that must be a worry.

Finally found the link to the original paper

https://www.mckinseyquarterly.com/Economic_Studies/Country_Reports/The_looming_deleveraging_challenge_2510

You’ll need to register but it’s free to do so

@74 AFZ

I think you’ll find that govt spending as a % of GDP is now 52%.

@77

?

[In case you can't see that link @78, it says that gov spending as % of GDP is at 45.22 and estimated to rise to 45.53 this year. It whooshed up from 39.75 in 2008 to 45.22 in 2009, almost as if some external macroeconomic factors were involved... :O ]

Tyler,

In relation to Krugman, oh please, you misrepresent him, like you create a straw man to counter my arguments. It was not a piece of policy prescription, it was an analysis of the scale of the problem at the time and how big a stimulus at the time was needed to get the economy going.

Since you didn’t have the courage to link to his original article, here goes.

<a href="http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html?scp=4&sq=krugman%20mcculley%20bubble&st=cse"Dubya's Double Dip"

Krugman was very early on concerned about the size of the housing boom compared to the neocon commentators who once again believed we were in a new economic paradigm and that any suggestion of a housing boom was ridiculous. Here he is in the first half of 2005.

Running out of bubbles

Kevin

Apologies for the broken link in previous

Dubya’s Double Dip”

“Ferguson and Krugman are having it out today in Seoul. Niall makes his point very well….”markets are fine today….till theyare not fine” in response to Krugman (and Sunny’s) argument that interest rates are low so more debt/stimulus should be enacted.”

That’d be the Ferguson who advocated deficit spending in the good times by Bush, but has changes his mind when it suits him politically?

http://yglesias.thinkprogress.org/2010/07/niall-ferguson-debates-himself/

You also misrepresent Krugman, as has already been pointed out.

RE: Current public debt as a percentage of current gdp.

Things have a denominator, so when GDP tanks, when debt stays the same or somewhat increases, you see a bigger shift in the debt to GDP ration.

If you look at something different, for example Govt. debt as a % of potential gdp you see a smaller increase. Lies, damn lies etc.

You’re making Japan sound more simple than it is. What is the central bank up to? No one’s really sure. Considering the fact you’ve been lambasting people on the subject of nominal/real interest rates I’m flabbergasted that you are using Japan’s low interest rates as a signal of monetary policy; perhaps you need some Scott Sumner and Milton Friedman in your life.

I realised I just ad hom’d Ferguson without taking on his substantive point. Basically, the market might change, but the market is telling us (through TIPS spreads, asset prices, stock markets) that it isn’t expecting too any time soon.

So Ferguson is essentially arguing “don’t trust the market, trust me.” Krugman, DeLong et al, are arguing, “the market says the economy is going to remain subdued unless we do something, the market is saying the government’s debt burden is okay, so lets borrow money to help boost demand and help the economy.”

So Krugman is the one being pro-market, and Ferguson is being anti-market. That is because, although a ferocious political figure, Krugman is consistent, [1] whereas Ferguson says whatever is politically advantageous in the moment.

___

[1] Bar his recent stuff on China, which really is poor.

68. Tyler

‘ You are quite wrong. Nominal GDP is not directly affected by interest rates. It is just a total value of GDP. Nominal and real interest rates DO affect interest payments though. If Interest rates doubled tomorrow, GDP wouldn’t change but your chart would. Understand? ‘

It is not a chart of interest rates. The chart is one of the interest payments budget as a ratio of GDP. If we wanted to see the interest rate governments were paying on their debt we would look at a chart of the average interest rate across the yield curve of all their issued debt. That would be a different chart but not that one. Sure in a time of high nominal interest rates that averaged number would rise and fall in a time of low nominal rates. However, what matters to us is the ratio. No matter how much blustering and talking about the gross budget in relation to other budgets that ratio is not historically high.

‘ As I say to Sunny above, the terrible state of public finances are masked by super low interest rates. People like you and Sunny can go “it’s not that bad as the interest payments are manageable”. You make the assumption that interest rates will stay super low though, which is a pretty stupid one to make. No, I take that back – it’s totally moronic. ‘

I don’t make any assumptions. Short-term interest rates will be exactly where the BoE want them. Interest rates rise? Good. That will mean the economy is recovering and when the economy is growing more tax revenue is generated and less borrowing by the government. Kinda the point. BTW I am not arguing in favour of Keynesian deficit spending. I’m biased towards monetary responses as that will stop future tax rises. However, it gets us nowhere when things are misrepresented.

‘@ 83. Left Outside

Niall Ferguson is a great contra-indicator. There are three types of people. (a) People to listen to. (b) People to listen to and then ignore. (c) The contra-indicators where you should do the exact opposite of what they predict.

@ 71 alienfromzog
“Which bit exactly is ‘Brown’s profligacy?’ ”
The difference between the cyclical deficit and the total deficit, of course. Which bit do you think it is?
Maybe in zog it is responsible behaviour to borrow money with no intention of ever repaying it, to assume that no capital investment ever wears out or becomes obsolete, to say production has increased because you have given your favourite employees a pay rise but they have produced less per head, to waste tens of £millions on a computer system that doesn’t work (4.5 million tax code requiring extra payments or repayments – and remember that anyone who had to complete a self-assessed return would have it corrected when their return was processed – mine was – so the actual number of errors was greater than the admitted 4.5 million), but there are still some honest men in England who do not think that it is. There is even a few Scots, such as Alastair Darling, who dare to say that most of the fiscal deficit is neither cyclical nor due to bankers. Maybe in zog you think that Alastair Darling is a figment of Cameron’s imagination?

87. alienfromzog

@John77

(sigh) Show me the figures.

Please provide a link to Alastair Darlings so-called confession – I can’t find any such quote.

You clearly haven’t read my link above about the issues with defining ‘Structural deficit’ However, even the most pessimistic of commentators have not said the structural part is more than half.

Borrowing money that you don’t intend to pay back is indeed irresponsible as an individual but it is the most responsible thing to do as a nation state. It is what all countries do, and what the UK has done ever since the nation debt was created (1694). This is because that governments can borrow over long periods of time and inflate away their debts to some extent.

To give that some context, 40 years ago the national debt was just under 64% of GDP (i.e. higher than it is today). In cash terms that equates to £33.08 Bn. Do you really think that paying that off is a priority? Those original bonds will have matured, the investors will have got their return and the world didn’t come to an end.

The key question in terms of national debt, is can you afford to service said debt? This is why it is wise to pay down debt when possible (£20bn from mobile phone licenses which btw the Tories opposed) but also why eliminating debt is not necessary. Not to mention that those bonds are around ~80% held in the UK, mostly by pension funds.

Oh and yes increasing pay for nurses and teachers (who remain underpaid) was clearly the wrong thing to do.

AFZ

88. alienfromzog

D’oh!

Sorry 1692, not 1694!

zog is a country where they can fool all of the people all of the time.
Read Alastair Darling’s Budget Speech on 24th March 2010 where he talks about the structural deficit being 8.4% of GDP (after his cuts and increasing income tax to 50%). Try Hansard or pay some money to ft.com.
Many of the more knowledgeable commentators viewed that as reflecting the chronic optimism of published treasury forecasts since 2001: Treasury officials estimated the 2009-10 structural deficit as 9.8% in March 2009.
If you find an article in “The Investors Chronicle” very helpful, then maybe you should actually learn some economics and finance before lecturing the rest of us. Also you should read what commentators say before claiming things like “However, even the most pessimistic of commentators have not said the structural part is more than half.” The FT is a little more erudite and accurate on economic matters than The Guardian.
It is simply not true that the UK has been continually borrowing money that it did not intend to pay back since 1694 (or 1692) nor that all countries do so.
“to say production has increased because you have given your favourite employees a pay rise but they have produced less per head” I did not say that it was wrong to give nurses a pay rise but Brown’s claim that the increase in reported GDP reflected real growth and borrowing capacity was irresponsible. Your straw man trick is childish and offensive.

90. alienfromzog

OK cheap shot, but the phrase ‘favourite employees’ is both pejorative and unhelpful.

So, please educate mate as to how 93% of the deficit is due to 93% is down to Brown’s profligacy?

Oh and I read the FT on economics much more than the Guardian.

AFZ

@ 90 alienfromzog
‘favourite employees’ is only pejorative if you have start off with certain views about Brown. When referring to approaching a million NHS workers to attribute anything pejorative to it is beyond my capabilities (even Guido would struggle).
If you want a long debate: I do not consider that teachers who can afford a foreign holiday every year and early retirement, (in some cases while supporting grown-up daughters who share one job between them), whereas I can afford neither despite longer hours for more weeks each year are underpaid.
The 93% was taken from your claim that it was all down to bailing out “the banks” (actually Dunfermline Building Society and Bradford & Bingley) and your answer that this cost £10bn out of the £140 billion deficit.
If you read the FT you should know that the only irredeemable gilts are Consols which result from the Consolidation of borrowings that were intended to be repaid and indefinite Annuities (to be distinguished from the Annuities on the life of the buyer where the instalments comprised the repayment). War Loan was scheduled in 1931, and some of it was, but some was converted into a new loan with a lower rate of interest by the Labour government. Treasury 2.5% 1961 would have been repaid in 1961 if the interest rate in 1961 had been at a similar level to that in 1946.
It is seriously irresponsible for a government to borrow money that it does not intend to repay (except in the case of forced loans from Jews at various dates in history where “irresponsible” would be an euphemism) because anyone naive enough to lend to them twice is unlikely to have any money left to lend when economic cycles or, more frequently, their own improvidence and stupidity, requires them to come back and ask for more loans.
One reason why interest/GDP was high in the ’80s and ’90s was that much of the debt issued by Healey was at 12%, 13.25%, 15% maturing in the mid-late 90s. The real interest paid on that debt was horrific. It would have been far worse had there not been a group of unwilling buyers who had no choice but to buy it because the DTI required them to do so – insurance companies who had to buy it to match money-denominated liabilities. The average inflation from 1979 to 1997 was 5% (without the distortion caused by Callaghan freezing prices of nationalised utilities ahead of the election so that when Thatcher set prices equal to cost there was a spike in *reported* inflation it would have been less) while the lowest rate of inflation under Wilson/Callaghan was 7.4%, so the Tories were saddled with paying over 10% real interest on a gilt.
So that was responsible? Are you a friend of Alastair Campbell? Affordability HAS to include the ability to repay your debts when due (unless you have a lawyer in Texas).

@ 91
War Loan was scheduled to be repaid in 1931

93. alienfromzog

@John77

I ALWAYS want a long debate. I find simplistic misleading arguments very annoying (like comparisons of the national finances to a household budget).

You make some interesting points. But what doesn’t make sense is your argument that because only ~£10bn was spent on the banking bailout directly, the rest of the deficit is prolific. The majority of the deficit is due to the collapse in tax revenues and increase in benefits payments that is inevitable when a financial shock hits. Plus the fiscal stimulus that I would argue was very important. If you check above, I never made any claims about the cost of the bailout. Hey-ho.

As I said above, I make no claims to be an economist, just an interested amateur. However, I do now how to read. It is reasonable to argue that the small fiscal deficits prior to 2008 were a problem – although I am very sceptical of people who say that now, rather than then. But the idea that the national finances prior to 2008 are really the problem just doesn’t fit with the facts of the world-wide crisis.

AFZ

For “now” read “know” for “profilic” read “profligate” for “I never made any claims about the cost of the bailout” read “£10bn was the direct cost of the banking bail out.”
NO, a *minority* “of the deficit is due to the collapse in tax revenues and increase in benefits payments that is inevitable when a financial shock hits.”
I need to know economics and I have had to take two exams in Economics (I have actually taken three but the first was optional). Yes, I did say that the fiscal deficits in 2001-5 were a problem – until my wife and colleagues and anyone else who had heard it before got totally fed up. What was more of a problem was running an inflationary fiscal policy and requiring the BoE to keep CPI inflation down to 2% pa (equivalent to RPIX of 3% pa which halves the value of savings over 25 years) because that required them to create disinflation in internationally traded goods to balance the higher rate of inflation in services by raising the £ exchange rate above PPP that resulted in mass unemployment in our manufacturing industries. Wilson and Brown have destroyed the North-East. Blair destroyed the UK textile industry – you can’t even get ONS data on employment therein any more because it is now too small for them to bother.
The 2001-7 deficits *are* the problem structurally rather than numerically. In that period Brown committed the government to a whole series of contractual payments (including but not solely the PFI which are part of New Labour’s “creative accounting”) and a lot of non-contractual payments whose termination *will* create hardship. Cameron/Clegg/Osborne will find it either difficult or expensive to get rid useless/overpaid state employees (was it £2 million for the BBC Deputy Director? – of course that was cheap compared to £15m pa paid by the BBC to Jonathan Ross whom they hired because he couldn’t get a job in the private sector). It will cost hundreds of £millions to get rid of 380 Quangos. Ridiculous pay rises to senior civil servants that justified doubling the total pay package for New Labour MPs by moving the basis for comparison. Benefits are easier to cut so Osborne’s Civil Service advisors are pushing him to cut benefits instead of overpaid civil servants.
There was NOT a world-wide crisis. The USA had a banking crisis due to the Clinton legislation on lending to those assumed to be disadvantaged, some greedy unscrupulous mortgage-brokers, some naive or greedy applicants, and a handful of greedy unscrupulous guys (very few gals) in Wall Street. Several European banks got stuffed because no-one told them that Californian mortgages were on a non-recourse basis (the worst case was one where the Risk Officer had just been lauded as one of the top three female executives in Germany). In the UK the son of a New Labour Life Peer created the first bank run since the 19th Century and Brown/Darling stole that bank from the depositor-shareholders who had been allotted shares when it demutualised. Then the Treasury told the remaining banks that they had to double their capital:loans ratio which involved raising more capital from the stock market in one month than the whole of UK industry and commerce had raised in the previous year. So far no UK bank (except Dunfermline Building Society and, on some hypotheses, B&B) has reduced its NAV below the amount that it raised from shareholders at the behest of HM Treasury. The so-called “banking bail-out” looks more like an opportunistic acquisition of assets from shareholders by HMG at a discount.
After all the fudges that he can find, including charging Northern Rock for the advice fees that the Treasury paid Goldman Sachs, Mr Caldwell ends up with Northern Rock’s NAV being £2.5 billion. Then he says that the Treasury needs pay the shareholders nothing under his terms of reference. No, I can’t give you a link because it’s not on the internet – I wonder why?
Re: simplistic. There are some benefits to simplistic. Fifty years ago some things were more civilised because anyone could say “Step outside and say that”: you didn’t to win, the possibility of the challenge was enough to make men behave in a more civilised fashion than now when any victim who said that could be arrested.

@85 Richard W – very belatedly
Some of us can actually think about what we read.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  2. Grace F-H

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  3. Matt Jeffs

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  4. Mili

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  5. Dick Smith

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  6. Douglas Boyd

    RT @msgracefh: RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  7. Melissa Nicole Harry

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  8. Shedden

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  9. unslugged

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  10. Tudor Evans

    RT @msgracefh: RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  11. Dave Howard

    The Defecit Myth: RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  12. mark wright

    RT @msgracefh: RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  13. Andrew Griffiths

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  14. Mark Koszler

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  15. Glen O'Hara

    Non-economists, have a look at this to tell you the reality of the government's supposedly 'huge debts': http://alturl.com/7fjz3

  16. Grey Murphy

    RT @markwrightuk88: RT @msgracefh: RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  17. Marjorie Smith

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  18. Nicolas Redfern

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  19. Sam Jones

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  20. Andy Sutherland

    RT @pedanticdave: The Defecit Myth: RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  21. Robert Dixon

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  22. Gareth Nicholas

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  23. Neil Partridge

    RT @pedanticdave: The Defecit Myth: RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  24. Ben Curran

    Interesting post on @libcon suggesting our debt ratio was higher during Tory years than it is now. http://bit.ly/cuqK9p

  25. If You Tolerate This

    Interesting facts on the defecit – http://liberalconspiracy.org/2010/10/12/fact-our-debt-ratio-was-higher-tory-years-than-it-is-now/

  26. James Hamilton

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  27. Lindsey Millen

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  28. Stuart Hudson

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  29. Sabcat Printing

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  30. Mike

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  31. Jackart

    Do I fisk this absolute twaddle from Libcon, or do I let it rest? http://bit.ly/bFDjaf

  32. Paul Hufton

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  33. Insurance Updates

    http://bit.ly/anJ0QO RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p #news

  34. Andy Bean

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  35. smileandsubvert

    Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/9OF4w1

  36. sunny hundal

    Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet this earlier)

  37. Alys

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  38. Neurosupport

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  39. Just Another Gooner

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  40. Cornelius Griffiths

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  41. Alison Charlton

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  42. Stewart Owadally

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet this earlier)

  43. Kevin Blanchard

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  44. Rooftop Jaxx

    Fact: our debt ratio was higher during #Tory years than it is now | Liberal Conspiracy http://t.co/UwbZyWL via @libcon

  45. tommctague

    not on principle against cuts but this is interesting: (RT sunny_hundal) debt interest higher under Tories than now http://bit.ly/cuqK9p

  46. LucaHelvetica

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  47. Peter Roberts

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  48. Who? What? Why?

    RT @sunny_hundal UK's debt interest payments were higher under Tories than now, whatever they might claim: http://bit.ly/cuqK9p

  49. Rory Hegarty

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  50. carrie JS

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  51. Danny Saxby

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p

  52. Lucy Proctor

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  53. Liat Norris

    RT @Danny_Saxby: RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p

  54. Ellen Richardson

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  55. Natacha Kennedy

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  56. Josie Long

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  57. bobthomson70

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  58. Lyndsay Vaughan

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  59. Pavitar Mann

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  60. Dylan Spicer

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  61. Andy Baker

    RT @fleetstreetfox: RT @sunny_hundal UK's debt interest payments were higher under Tories than now, whatever they might claim: http://bit.ly/cuqK9p

  62. Kieran

    RT: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (via @sunny_hundal)

  63. Alex

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  64. Carla Searle

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  65. Eddie Robson

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  66. Kate Gresswell

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  67. andychannelle

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  68. Ian

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  69. Andy Minnis

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  70. Adam White

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p < Ive been saying this for ages

  71. ally

    RT @theday2day: RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p < Ive been saying t …

  72. Kathryn Rose

    RT @theday2day: RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p < Ive been saying t …

  73. Martin Clark

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  74. Adam James O'Rourke

    RT @sunny_hundal: Fact: our debt ratio was higher during Tory years than now, finds @BickerRecord http://bit.ly/cuqK9p (forgot to tweet …

  75. Jaki Booth

    Oh look #cable – a promise is a promise! RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  76. Pucci Dellanno

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  77. Darren Burgoyne

    RT @libcon: Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p < Ive been saying this for ages

  78. Westerly21

    Fact: our debt ratio was higher during Tory years than it is now http://is.gd/g1npc

  79. Countering the Coalition cuts: a myth-busting guide | Liberal Conspiracy

    [...] This article explains that interest payments on our debt (as a % of GDP) were higher during Thatcher years. [...]

  80. sunny hundal

    @palashdave yup, see this http://bit.ly/cuqK9p

  81. Your bad news, is my bad news

    [...] whole “cut spending” approach. Firstly, there is plenty of historical data to show that our levels of indebtedness are not extraordinarily high. So is this relentless chant of “it has to be done” really just motivated by political [...]

  82. Clint David Samuel

    Fact: our debt ratio was higher during Tory years than it is now | Liberal Conspiracy http://t.co/KYtJQIr via @libcon

  83. sunny hundal

    @OliverCooper Fact: our debt ratio was higher during Tory years than it is now http://bit.ly/cuqK9p

  84. Eve

    Debt ratio higher durin Tory govt http://liberalconspiracy.org/2010/10/12/fact-our-debt-ratio-was-higher-tory-years-than-it-is-now/ #ukuncut

  85. Eve

    @lbc973 Debt ratio higher durin Tory govt http://liberalconspiracy.org/2010/10/12/fact-our-debt-ratio-was-higher-tory-years-than-it-is-now/

  86. Eve

    Debt ratio higher durin Tory govt http://liberalconspiracy.org/2010/10/12/fact-our-debt-ratio-was-higher-tory-years-than-it-is-now/ #ukuncut

  87. andy

    RT @scarycanary666: Debt ratio higher durin Tory govt http://liberalconspiracy.org/2010/10/12/fact-our-debt-ratio-was-higher-tory-years-

  88. sunny hundal

    @thegreenbenches We did that story a while back Eoin :) http://bit.ly/cuqK9p

  89. DarkestAngel

    Fact: our debt ratio was higher during Tory years than it is now | Liberal Conspiracy http://t.co/H0ogyWQ via @libcon #bbcqt #newsnight RT

  90. Paul Cotterill

    @TheGreenBenches Blimey, even Eoin's plagiarising my work now http://t.co/84M7D3sG

  91. I'malrightjack

    Fact: our debt ratio was higher during Tory years than it is now | Liberal Conspiracy http://t.co/uAQaU6B #Lab11 #Labour #Ed Balls RT

  92. CllrJuderobinson

    Fact: our debt ratio was higher during Tory years than it is now | Liberal Conspiracy http://t.co/uAQaU6B #Lab11 #Labour #Ed Balls RT

  93. Larry Gardiner

    The Emperor has got no clothes! Economic justification for austerity is a fiction. ConDem policies are driven by ideol…http://t.co/eQ3B7luz

  94. HRH The Queem

    Fact: Our debt ratio was higher during #Tory years than 1997-2007 http://t.co/wHYwRQiP #CPC11 #uneconomy #Coalition RT

  95. The Bell at Caerleon

    Fact: Our debt ratio was higher during #Tory years than 1997-2007 http://t.co/wHYwRQiP #CPC11 #uneconomy #Coalition RT

  96. Stuart Lemon

    Fact: Our debt ratio was higher during #Tory years than 1997-2007 http://t.co/wHYwRQiP #CPC11 #uneconomy #Coalition RT

  97. Britt Johnson

    Fact: Our debt ratio was higher during #Tory years than 1997-2007 http://t.co/wHYwRQiP #CPC11 #uneconomy #Coalition RT

  98. HRH The Queem

    Fact: our debt ratio was higher during #Tory years than 1997-2007 http://t.co/wHYwRQiP #CPC11 #ukeconomic #Camerob RT

  99. HRH The Queem

    Fact: UK debt ratio was higher during #Tory years than 1997-2007 http://t.co/wHYwRQiP #CPC11 #ukeconomic #cameron RT

  100. Robert Frost

    Fact: UK debt ratio was higher during #Tory years than 1997-2007 http://t.co/wHYwRQiP #CPC11 #ukeconomic #cameron RT

  101. I'malrightJack

    FACT:UK debt ratio was higher during #Tory years than it was during labour yrs of 1997-2007 http://t.co/lcNMNZaJ #Newsnight RT

  102. Thaddeus Beatlebrox

    FACT:UK debt ratio was higher during #Tory years than it was during labour yrs of 1997-2007 http://t.co/lcNMNZaJ #Newsnight RT

  103. tom cardwell

    FACT:UK debt ratio was higher during #Tory years than it was during labour yrs of 1997-2007 http://t.co/lcNMNZaJ #Newsnight RT

  104. Patrick Dennehy

    FACT:UK debt ratio was higher during #Tory years than it was during labour yrs of 1997-2007 http://t.co/lcNMNZaJ #Newsnight RT

  105. Blair Supporter

    FACT:UK debt ratio was higher during #Tory years than it was during labour yrs of 1997-2007 http://t.co/lcNMNZaJ #Newsnight RT

  106. I'malrightJack

    Fact: our debt ratio was higher during #Tory years than 1997-2007 Liberal Conspiracy http://t.co/uAQaU6B #CPC11 #bbcqt RT

  107. Daniel Cox

    Fact: our debt ratio was higher during #Tory years than 1997-2007 Liberal Conspiracy http://t.co/uAQaU6B #CPC11 #bbcqt RT

  108. Jo C

    Fact: our debt ratio was higher during #Tory years than 1997-2007 Liberal Conspiracy http://t.co/uAQaU6B #CPC11 #bbcqt RT

  109. MCMLXXVI.a.d.

    Fact: our debt ratio was higher during #Tory years than 1997-2007 Liberal Conspiracy http://t.co/uAQaU6B #CPC11 #bbcqt RT

  110. Roy Bailey

    Fact: our debt ratio was higher during #Tory years than 1997-2007 Liberal Conspiracy http://t.co/uAQaU6B #CPC11 #bbcqt RT

  111. KATE BUTLER

    Fact: our debt ratio was higher during #Tory years than 1997-2007 Liberal Conspiracy http://t.co/uAQaU6B #CPC11 #bbcqt RT

  112. pansypotter41

    Fact: our debt ratio was higher during #Tory years than 1997-2007 Liberal Conspiracy http://t.co/uAQaU6B #CPC11 #bbcqt RT

  113. Norma Curran

    FACT:UK debt ratio was higher during #Tory years than it was during labour yrs of 1997-2007 http://t.co/OQYmEAlO

  114. Norma Curran

    FACT:UK debt ratio was higher during #Tory years than it was during labour yrs of 1997-2007 http://t.co/OQYmEAlO

  115. Stephen Cruickshank

    FACT:UK debt ratio was higher during #Tory years than it was during labour yrs of 1997-2007 http://t.co/OQYmEAlO

  116. thats him!!

    Fact: our debt ratio was higher during Tory years than it is now | Liberal Conspiracy http://t.co/ch92no8K via @libcon

  117. thats him!!

    Fact: our debt ratio was higher during Tory years than it is now | Liberal Conspiracy http://t.co/L5C9OqGf via @libcon#skynews#bbcnews





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