WE MUST EXPLAIN THE SCALE OF THE PUBLIC DEFICIT SAYS LUFF
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WE MUST EXPLAIN THE SCALE OF THE PUBLIC DEFICIT SAYS LUFF

Speaking at the Annual Dinner of the Finance and Leasing Association, Mid Worcestershire MP Peter Luff last night (Tuesday) said that the one big issue in the coming election was the need to mend the public finances.
Even communicating the scale of the problem is a challenge. Can voters ever be expected to begin to understand the size of the numbers we are talking about?

They engaged with the Parliamentary expenses disaster in part because the numbers were on a scale they could understand – and often the biggest rows were over the smallest items – things like bath plugs and dog food.

But the annual deficit and the stock of debt are both on a scale so huge that it probably defies the imagination of even the most financially aware.

So will we be able to explain to the British people that a debt stock of a trillion pounds and an annual deficit of £178 billion really do mean some tough choices over the next five years?

Perhaps some context would help. Taking an idea from the West End hit “Enron”:

A billion seconds ago it was 1978.

A little over a billion minutes ago, Jesus was alive.

A billion hours ago our ancestors were living in the middle of the Stone Age.

A billion days ago nothing walked on the earth on two feet – we had another two hundred thousand years to wait for the first Homo Sapiens to emerge.

And 178 billion seconds takes us back to roughly 3,700BC - the beginning of Minoan civilisation on Crete!

To put it another way, a trillion seconds is around 32,000 years - and woolly mammoths had another 20,000 years left roaming the planet before their extinction.

But sometime next year total government debt will top a trillion pounds – and by 2015 it will be one and a half trillion pounds.

The challenge is urgent – and it’s even harder because the deficit is largely structural.

A few weeks ago, at a committee meeting in the Commons, I tried to get the Prime Minister to face up to this.

I reminded him that his own Treasury’s chief economic adviser says that around 70 per cent of the deficit is structural and that the IMF says that Ireland, Spain and the UK are the three countries with the worst underlying structural problem.

But he said,

“I do not agree with the structural problem that you detail.”

If he denies this truth, he makes the political challenge of dealing with it much harder.


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