British Party: Britain's Future Prosperity
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: