|Brown debt crisis gets bigger by the day Posted by Ian at 8 50 PM on Saturday, February 14|
THE Government will this week be warned they have a massive £65 billion black hole in their finances—and it is growing by the day.
The Office for National Statistics will reveal on Thursday how Gordon Brown has managed to spend £65 billion more than he has collected in tax since April last year.
And that national debt is costing every person in the UK £4.16 A DAY.
Citibank experts predict that by the end of April the deficit figure will rise to a staggering £90 billion—the largest in British history and way above the Government’s forecast of £78 billion. Citibank’s chief economist warned: “The economy is in freefall.”
To illustrate the scale of the problem, if Chancellor Alistair Darling wanted to balance his books in the April Budget he would need to:
SCRAP the Army, Royal Navy and RAF to save £27.7 billion a year.
AXE the police, saving £17.6 billion.
CLOSE all universities, saving £11.5 billion.
FREE every prisoner, saving the £4.6 billion a year it costs to run our jails.
END unemployment benefit, saving £3.9 billion.
In reality, it means every part of government can expect massive spending cuts from the end of next year.
Things will be even worse in 2009-10 when the overspend will be up to £140 BILLION. This means the Government would have to borrow £1 of every £5 it spends.
In the current financial year, the Government’s tax haul was seven per cent down in November and 5.5 per cent in December, making the black hole bigger.
The only way the Government can raise this is by printing IOU notes and borrowing —mainly from Arab and Chinese banks, which are still buying government debt.
Shadow Chancellor George Osborne warned: “This is the multi-billion pound bill of Labour’s debt crisis, but it is the taxpayer who will pick up the bill. Now we can all see the true cost of Labour’s age of irresponsibility.
“It will take a new Conservative government to introduce discipline and responsibility, when it comes to spending taxpayers’ money, so we don’t keep adding to the debt mountain our children will have to pay off.”
The massive year-after-year overspend shows Brown’s refusal to cut state spending, even though tax revenues are collapsing, is now seriously damaging the economy. His plan is to double the national debt to an historic £1.08 trillion by 2012-13—and this will be paid off by higher taxes that are expected to last for a generation.
The Conservatives have criticised the PM over debt, but David Cameron has said he will copy Brown’s plans to increase state spending every year. While the Tories stress they would increase it by a smaller amount, there would be little difference, and they would be unable to avoid the trillion-pound debt.
Senior Tories fear that a Tory government will have no choice but to make the swingeing cuts that Brown has so far refused to implement.
Thanks to tax returns from individuals and companies, January is expected to be a freak month where the state receives more than it spends.
But the surplus is expected to be just £6 billion—half of January last year and the lowest of any January since 2004.
The cumulative deficit, from April 08 to January 09, will break the £65 billion barrier.
Michael Saunders, chief economist at Citigroup, said “More of the same looks likely as the recession and the VAT cut bite.”