Oct 2010 19

TaxPayers’ Alliance reveals the true extent of UK national debt

Click here to read the full report


£890 billion (£0.89 trillion)
Official public sector debt quoted in the Budget by the Government

£7,900 billion (£7.9 trillion)
Real national debt, according to TaxPayers’ Alliance calculations

The TaxPayers’ Alliance today reveals the true extent of national debt, with a new report entitled The Real National Debt: A Decade of Reckless Growth.

The report finds that the official Government figure for national debt is much lower than the true amount that the UK Government (and therefore UK taxpayers) currently owes and that the real national debt has mushroomed over the last decade.

Click here to read the full report

Key Findings

At the end of 2009-10 the real national debt stood at £7.9 trillion, over £300,000 for every single household in Britain

During the last decade debt has more than tripled, soaring from 230 per cent of GDP (£2.3 trillion) up to 560 per cent of GDP (£7.9 trillion)

Official national debt (quoted by the Chancellor in his budget) hugely underestimates taxpayer liabilities

Relative to GDP this is by far the biggest national debt we have ever had since records began

Click here to read the full report

Our measure of the real national debt is gross debt (total debt) valued at market prices (the market value of the debt). It includes the following items (2009-10):

  • The official public sector debt quoted in the budget – £890 billion (£0.89 trillion)
  • Unfunded public sector pensions – estimated at £1,283 billion (£1.28 trillion)
  • Unfunded state pensions – estimated at £2,717 billion (£2.7 trillion)
  • RBS/Lloyds debt – £2,585 billion (£2.6 trillion)
  • Other – including the Local Government Pension deficit, PFI, and nuclear decommissioning – £398 billion (£0.4 trillion)

At March 2010, we calculate the total debt stood at £7,873 billion (£7.9 trillion)

Click here to read the full report

Large numbers can be difficult to imagine. To help taxpayers understand the true scale of the real national debt the TaxPayers’ Alliance is releasing a video in conjunction with this report, featuring Mike Denham, the report author.

Notes to Editors

2. Large numbers can be difficult to imagine; £1 trillion = £1,000 billion; £1 billion = £1,000 million
3. The national debt is the total amount of money the UK Government currently owes. This is different to the national deficit, which is the amount of money UK Government spends in excess of income. Each year we run a deficit, the national debt grows. Britain has been running a national deficit for the past 9 years.
4. It’s not merely the huge scale of the national debt that is cause for concern, but also the rate at which it is increasing. Net borrowing this year alone will be £163 billion, and by 2014/15 the official national debt is predicted to rise to £1.4 trillion. Remember, this just the debt that the Chancellor reports in his Budget.
5. To put this frightening rate of borrowing into context, the current rate of increase in the national debt would eat up:

  • The Mayor of London’s annual budget in one month
  • Yearly spending by the devolved Welsh Government in 35 days
  • The total cost of both Afghanistan and Iraq conflicts in just 40 days
  • The Bank of England’s entire gold bullion reserves in just 7 weeks
  • Yearly spending by the devolved Scottish Government in 78 days
  • The annual Defence budget in just 80 days

  • http://www.philtaylor.org.uk Phil Taylor

    I have a lot of time for what you guys do but too often your analysis is lightweight. I think you are really being a bit rubbish when you only put one half of the nationalised banks’ balance sheets into your sums. Assuming that they will have to pay all their loans and that all their own loans will go 100% bad really is voodoo economics.
    At his last budget Alistair Darling said that the bank bailout would probably cost £6 billion net. I don’t believe everything that Labour politicians tell me but this number must have come from civil servants and I suspect it is at least half truthful. It is likely that the UK government will end up making a modest profit on the bailout.
    Your credibility would be enhanced if you focussed on pensions rather than including the bank bailout which is pretty much a red herring.

  • simon

    A figure for old age benefits which will need to be paid to ex private sector workers who cannot build up adequate provisions for their life after work should appear in the National Debt .
    This is because private sector workers are not saving the 28% of earnings needed to provide a pension of 50% of career average salary (not final) . 28% provides for redistribution to low earners who cannot save anything .

  • Jim

    Phil is entirely right about the banks- they have assets as well as liabilities and the net position is what we owe, not the gross liabilities.
    Furthermore your calculations don’t appear to include PFI- again the calculation is complex becuase of the cost of capital involved but you should at least get that in there somehow.

  • http://profile.typepad.com/jamescallaghan73 gildedtumbril

    Pawnbroking Finance Initiative should be killed off.
    Likewise EHRC because it is a waste of £70 million p.a. and we do not need to be insulted by damned aliens no matter what their colour.

  • http://profile.typepad.com/jamescallaghan73 gildedtumbril

    At the top of the column you say”…a decade of Reckless Growth”
    The only growth I see is in bebt and reckless waste is more like it and I bloody well do not like it.

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