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),’
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.
The Independent Blogs