Gary's News and views

Gary Streeter MP for South West Devon

Gary writes a weekly article which appears in the Plympton Plymstock and Ivybridge News in South West Devon. The articles are published here.


Thursday, 7 February 2013


What's in a number? If you are a running your own business, or a householder juggling rising bills, or the Chancellor of the Exchequer, quite a lot.

When I had a proper job I used to be a lawyer advising companies. I loved to visit clients and discuss business (still do). I acquired the habit of dropping specific questions casually into conversation: what is your turnover, break even figure, gross profit, net profit broken down annually and monthly and so on. I usually found that those entrepreneurs with a clear set of ballpark figures in their minds would succeed, while those who didn't, might not.

What are the ballpark figures that George Osborne goes to bed thinking about every night? Here are some of them. The UK GDP last year (that is all of our economic activity added together) was £1,525 billion. The government spent £691 billion, but sadly only brought in, in taxes and other income, £570 billion. This means that after nearly three years of austerity we still borrowed £121 billion just to pay our debts. This year we expect to still borrow £110 billion.

The total amount that the UK government owes is now £1,065 billion. Obviously as we are still borrowing every year that figure is going up. This year we will be paying £46 billion in interest on that debt. Yes, that's right £46 billion – in other words £5 million per hour just in interest payments alone.

You might think that it is perfectly acceptable for a government to borrow during a recession. But unhappily (and this is the unforgiveable thing) the then government was borrowing £57 billion in the year before the 2007/08 credit crunch – borrowing even in the years of plenty.

What do we spend our £691 billion on? £106 billion is spent on healthcare, £37 billion on defence (not enough!). We spend a massive £202 billion on welfare and this is the largest budget we just have to get under control. Of that £202 billion, a staggering £23 billion is spent on housing benefit. The government is trying to reduce these figures.

Our net contribution to the EU is £7 billion. We spent £9 billion last year on foreign aid. I know that many of you are upset that we spend too much on both of these items, but as you can see they are a modest percentage of the overall spend.

I wonder if George sleeps well at night.

posted by Gary @ 13:39