Tony Jackson

Official figures out this morning report that last month, the UK government borrowed £24.5 billion. But the fineprint shows that almost £11 billion of that extra borrowing went on debt interest payments. That's more than £400 per household on debt service costs, in September alone. So far during this financial year, from April to September, the government's debt interest payments amount to £61 billion. Now, this number will barely feature in UK newspapers and across our airwaves. It may be mentioned in passing in out-of-the-way business sections, or on the odd business bulletin. But this huge debt interest bill won't register with the vast majority of our political and media class, or impact the national debate. Let me explain why that's so wrong and so dangerous ... £61 billion is a massive amount of money. It's equivalent to the UK's entire annual defence budget – the money we're paying, increasingly to foreign creditors, simply to service our national debt for six months, not to pay any of it back. £61 billion is equivalent to the money you'd raise over a year from adding a whopping 7 pence to the basic rate of income tax. For £61 billion, you could build around 40 large, state-of-the-art hospitals, or employ more than 100 thousand extra nurses for ten years. £61 billion would pay for free-at-the-point of use social care for everyone who needs it in the UK, for an entire year – three times over. Again, this is the debt interest bill on Britain's spiralling national debt – now more than 3 trillion pounds – over the last six months alone. The UK's public finances are close to meltdown – yet so many MPs and journalists continue blithely to view ever more public spending and borrowing as the answer to every problem. Those who highlight the dangers post by our hugely precarious national accounts are dismissed as cranks, ideologues or worse. But basic arithmetic has no ideology. And there is nothing "progressive" or "kind" or "right-on" about driving the UK ever closer to the fiscal cliff edge, provoking a crisis that will make the "austerity" years of the 2010s feel like a picnic, a crisis in which poorer households will suffer the most. Yes, Britain's national debt is lower than that of France. But because our borrowing has been rising so sharply, and because we're so prone to inflation, our debt service costs are much higher. The UK is spending a disgraceful 3.6pc of GDP on public debt interest, while France spends less than 2.5pc. Endless airtime and column inches are devoted to spurious conversations about a billion or two of additional "fiscal headroom" we may or may not have in three years' time. And, of course, any "extra headroom" is immediately pledged in new spending – which means yet more borrowing. These conversations are a waste of time – and, in fact, are deeply counterproductive. Three-year fiscal forecasts, even one- and two-year forecasts, routinely turn out to be askew by tens of billions of pounds. I'm not saying we don't need fiscal rules - we do, but we need more immediate rules, which actually bite, acting as a meaningful constraint on out-of-control borrowing and spending. Instead, political and media sages present the nation with spuriously precise discussions about fictional fiscal outcomes way into the future – using rules which are deliberately designed to kick arithmetic realities into the long grass .... An increasingly expensive, over-bearing, out of control state is not the answer to Britain problems. But unless we change course, it will certainly be our downfall. Please like/share if you think what I'm saying is important – and if fiscal realities should feature more prominently in our national debate. And for more sharp, plain-speaking economic analysis subscribe to: "When The Facts Change - economic and politics in a fast-moving world, with Liam Halligan"