Given the number of times that George Osborne has talked about eradicating the deficit, you could be forgiven for thinking that the country's borrowing is under control. You might even think we're about to break even. However, if that's your belief, then you're in for a nasty surprise, because last year the UK ran the third highest deficit in Europe - and the national debt has risen to a jaw-dropping 89.4% of national income (GDP).
The scale of the debt
The figures were revealed by Eurostat, which showed that as a percentage of GDP, Britain is borrowing more than anywhere else in Europe - apart from Cyprus and Spain (and equaling Croatia). It borrowed 5.7% of GDP last year - compared to Greece which borrowed 3.5% and Germany which ran a 0.7% surplus.
The size of the debt has now hit £1.5 trillion. It's a sum so large that it's difficult to imagine, but it looks less horrifying than elsewhere in Europe, because Greece has borrowed 177.1% of GDP, Italy 132.1%, Spain 97.7% and France 95%. In fact Britain's total debt measured this way is the ninth largest in Europe.
The TUC has pointed out that despite all the austerity measures so far, the deficit this year will be £87.3 billion - which is £50 billion larger than Osborne planned in 2010. The Office of Budget Responsibility has estimated that the UK's deficit will be under control by 2020, but the IMF has suggested that at that stage, the deficit will still be £7 billion.
The solution also depends on the side of the political spectrum you lie. The Conservatives and Liberals have committed to ending the deficit in the next two years - although they differ in that the Liberals plan to use more taxes alongside cuts, and the Conservatives have pledged to do it through cuts alone.
Labour has also committed to cutting the deficit - although it aims to reduce it to zero over a longer term, committing only to cutting the deficit every year and getting to a surplus 'as soon as possible'. Others, including the TUC, argue that the government needs to invest in skills, infrastructure and innovation to get the economy booming and naturally increase the tax take.
At the far end of the spectrum, the SNP, Welsh Nationalists and the Green Party want an end to austerity, using growth to bring an end to the deficit. Mark Littlewood, Director General at the Institute of Economic Affairs expressed concern at this idea, saying: "Proposals to end austerity and increase departmental spending are wholly misguided given that the UK is still running a deficit of £90 billion a year and the government is spending nearly half of national income. Small steps to reduce the deficit have been made over this Parliament and the SNP manifesto would eradicate this progress."
But what do you think? Do you find this level of debt concerning? Do you think the government should be cutting back or taxing us more? Or do you think the focus on the deficit is a red herring? Let us know in the comments.
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