In these austere days, some of us have belatedly learnt how to tell a ‘debt’ from a ‘deficit’.
Debts are something we all run up; a deficit is not something we think about in everyday life, though perhaps we should: it is the measure of how much the money going out exceeds the money coming in.
The latest person who has had to be given this basic lesson is David Cameron.
The Prime Minister made a false claim – not in an unguarded moment but during a scripted political broadcast – that the government is “paying down Britain’s debts”.
This provoked Labour’s shadow treasury minister, Rachel Reeves, to complain to Andrew Dilnot, head of the National Statistics Authority.
He has now replied saying, in effect, that she is right to complain.
‘Public sector net debt at the end of the second quarter of 2010 (June) was estimated to be £811.3 billion, representing 55.3 per cent of Gross Domestic Product, rising to £1,111.4 billion at the end of the fourth quarter of 2012 (December) (70.7 per cent of GDP),’
he wrote.
So public debt will have gone up by £300 billion in two and a half years of the coalition government.
What the government has achieved is to bring down the deficit, which means they are not running into debt as far as under Gordon Brown.
“It is hugely embarrassing for David Cameron that he has had to have the difference between borrowing and debt explained to him by the Chair of the UK Statistics Authority,”
Rachel Reeves said.
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Debt or deficit it does not matter. Both are unimportant to our economy.All you have to worry about is Unemployment. If the gov’t runs with unemployment we are damaging our National Wealth(real wealth) and keeping wages lower than they should be
Well surprise effin surprise!
Cameron certainly knows the difference he was in the Treasury under Major and was one of his advisers
Just because he was in the Treasury under Major doesn’t mean that he knows the difference. You only have to watch the cabinet reshuffles where they all swap from one department to another without any training whatsoever to realise that none of them know anything at all about any of the jobs they attempt to do.
he know how to spend money though!!! he spent over 600k doing his place up for the obama visit
well done dave i have been saying that for years it took 2 years to train in my job .. jeff ..
Watch this video to see Rachel Reeves making exactly the same mistake:
http://youtu.be/iOsqBf5hDjI?t=7m17s
(Have patience. It is after the adverts and takes a while to start.)