UK debt has cost every Scottish household almost £80,000

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by a Newsnet Scotland reporter 

UK Chancellor George Osborne has claimed that Labour’s mismanagement of the UK economy has left every householder in Britain with a bill of almost £80,000.

The total debt caused by Gordon Brown’s disastrous stewardship of the economy is now estimated to be as much as £2.049 trillion.

A figure of £2 trillion was being touted by many a far back as 2008 with some analysts even suggesting a figure as high as £4.5 trillion.

The new total includes £1.1trillion (£1,100billion) of previously ‘hidden’ figures including future pension payments to retired teachers, police officers and NHS staff as well as the controversial Private Finance Initiative building projects for schools and hospitals; all loading an extra £40 billion on to the UK’s mountainous debt.

This £1.1trillion plus the £40billion, when added to the official debt figure of £909billion, gives a total of £2.049trillion, equivalent to £78,807 bill for every one of the 26million households in the UK.

This breath-taking figure is equal to 80 per cent of UK output and is three times the combined national debts of Greece, Spain, Portugal and Ireland.

In 2008, Labour officially estimated public sector pension liabilities at £770billion – £330billion less than today and last March Labour costed PFI projects at £5.1billion – well below the £40billion figure presented today.

The debt adds fire to the debate over the cost and sustainability of public sector pensions following the recent strikes by unions which closed thousands of schools.

Chancellor of the Exchequer George Osborne published the figures claiming he wants the taxpayer to have a more realistic view of the huge burden of debt built up during Gordon Brown’s time in office.  However, critics of the UK government say these figures are released to justify the coalition’s plans for future more severe cuts.

The cuts are sure to hit Scotland particularly hard and the Scottish government yesterday repeated calls for more economic powers following figures that showed Scotland’s employment rate now better than the UK.

Commenting First Minister Alex Salmond said: “We now have lower unemployment, higher employment, and a lower rate of economic inactivity in Scotland than the UK as a whole – and the lowest joblessness rate in Scotland for 18 months, with the eighth consecutive reported fall.  And this week’s PMI survey showed Scotland’s private sector expanding for the sixth consecutive month in June.”

Mr Salmond added:
“With greater access to the key levers of economic growth, such as corporation tax and borrowing powers, we could do more to enhance investment and jobs in the Scottish economy, and give Scotland a major competitive advantage.”

These UK debt figures will throw the economic viability of the Union into the spotlight given that for all but one of the last five years Scotland has actually ran a surplus.

The economy is sure to be the main battleground as the debate over Scotland’s constitutional future is heard.  Viability of the economy and the ability to create and sustain wealth and jobs will determine the outcome of the referendum debate.

Recent claims from three independent professors have cast doubt over Unionist arguments that the economy of an independent Scotland could not have survived the recent banking crisis.  Ninety per cent of the cost of the bailout of RBS and HBOS, say the professors, would have fallen on the rest of the UK had Scotland been independent at the time of the collapse.