British
Party: Britain's Future Prosperity
Page
2
The
Public Debt
Britain's public debt, also known as national debt, is
the money the State owes to purchasers of UK bonds and gilts. In
2002, Britain's national debt was equal to 29% of Gross Domestic Product (GDP). As of August
2012, the money the State owes stands at around £1.032 trillion.
That is one trillion and 32 billion pounds, equivalent to just over
65% of GDP. This is an increase of £150
billion from May 2010, when the present Coalition took office. At
that time, the public debt was £850 billion.
The Coalition's spending cuts in the economy, which
include a programme to reduce public sector employment by around
700,000 people over a period of several years and to drastically cut
council budgets, have had no effect in reducing our Country's Debt.
In fact it would appear that public spending cuts can do nothing to
change the financial ruin Britain is facing, as the roots of the
problem have not been analysed by the economists.
The economic reality is indeed worse: the official
figures for Britain's national debt do not include the Net debt,
which equals around £2.3 trillion, to be precise, two trillion and
311 billion pounds. The Net debt includes a series of factors
relating to State interventions in the financial sector, such as the
costs for the bailout of a number of British banks in 2008, and is
equivalent to 147% of GDP.
Cost
of Public Debt
The cost for servicing the national debt is the interest
the State pays to purchasers of government bonds and gilts.
Currently, the interest paid by the British State on the public debt
is between £40 billion and £50 billion a year, but as the debt is
expected to increase to 100% of GDP by 2015, the interest will
progressively go up by tens of billions of pounds a year, reaching
possibly £70 billion and more by 2015.
This means that, as things stand now, over a four year
period from the start of 2012 to the end of 2015, we will have paid
between 200 and 250 billion pounds on public debt interest. These
figures do not include any further interest which is owed by the
State on the total Net debt of £2.3 trillion.
The money to pay the interest on Britain's national debt
comes partly from taxing the Public in general, including businesses.
Further money is raised through the sale of State assets, such as
British commercial ports to give just one example. And in part the
money comes simply through the sale of more UK bonds and gilts, thus
increasing the public debt even more for future years!
A result of this debt, and the interest paid on it,
becomes manifest through increased poverty within the economy caused
by spending cuts, generally known as austerity. This involves scaling
back the number of public employees, reducing public sector pensions,
reducing benefits, cutting back on council budgets and essential
services. The general financial recession in Britain and many other
countries means that the private sector cannot offer sufficient
employment or bring in extra revenues to compensate for the financial
gap brought about through austerity.
Local
Economic Administration
Britain's future Prosperity will come about through
responsibility on the part of Local Government towards their own
community. This is an essential part of British Party policy, and it
is based on the principle that the local treasury must always be in
positive, and never in debt. Councils would enjoy a larger share in
revenues deriving from the local economy, with a smaller percentage
of revenues going to the State treasury.
Economic boards run by Local Government will have the
duty to create productive employment in their administrative areas
whenever this can be of local and national benefit: in the fields of
agriculture and industry, in the efficient running of public services
and in employment-training programmes. The days when the vast amount
of revenues were administered by Central Government will come to an
end, to be replaced by close accountability on the part of District
and County Government.
As a higher percentage of public revenue will go to
these councils, including a percentage of income tax and corporation
tax, it will be in their own interests to ensure that local
prosperity, including employment, is open to the whole community and
not out-sourced to cheap foreign labour. This will be particularly
imperative as Local Government would never be allowed to incur a
public debt of any kind, and would be responsible for paying all
unemployment-related benefits in their own area.
It will be the duty of Council Government to monitor
every instance of unemployment-related benefits, to help every
resident entitled to employment – and in need of employment – to
also gain fair access to the work market.
Britain will be free from the European Union and from
any foreign parliament or foreign legislation. Accountability in the
management of public finances will be a priority, and will start at
the smallest level of Government.
Who
Will Pay the Public Debt?
How the national debt will be paid off, and how the
interest on this debt will be paid for, is a question that needs to
be answered.
Will high interest rates on private debt pay off the
State's shortcomings? Will stamp duty on artificially high house
prices pay for it? Will the Government sell Britain's remaining
public assets to cover the costs of Public Debt?
None of these solutions would ever work, and none of
them are part of British Party policies. Speculation and greed within
the economy are unacceptable, as too is the idea of lack of accountability
in managing the State's finances.
Written by D. Alexander
Link to page 1 of Britain's Future Prosperity:
Prosperity Coming to Scotland:
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