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  • The Deficit Mountain

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    SimonRogersGuardian
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    The UK government's annual deficit has increased significantly as the economy has collapsed into recession. The deficit is what the government must borrow each year to cover spending, as opposed to the national debt which is the total accumulated amount owed. Alistair Darling's plans are aimed at reducing the deficit gradually by lowering spending and raising some taxes. His targets are to reduce the deficit to £96 billion by 2013/14 and £82 billion by 2014/15 through fiscal tightening measures estimated to total £45.1 billion.

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    How do you reduce Britain's deficit mountain?

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    The deficit mountain

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    The UK government's annual deficit has increased significantly as the economy has collapsed into recession. The deficit is what the government must borrow each year to cover spending, as opposed to the national debt which is the total accumulated amount owed. Alistair Darling's plans are aimed at reducing the deficit gradually by lowering spending and raising some taxes. His targets are to reduce the deficit to £96 billion by 2013/14 and £82 billion by 2014/15 through fiscal tightening measures estimated to total £45.1 billion.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    2K views1 page

    The Deficit Mountain

    Uploaded by

    SimonRogersGuardian
    The UK government's annual deficit has increased significantly as the economy has collapsed into recession. The deficit is what the government must borrow each year to cover spending, as opposed to the national debt which is the total accumulated amount owed. Alistair Darling's plans are aimed at reducing the deficit gradually by lowering spending and raising some taxes. His targets are to reduce the deficit to £96 billion by 2013/14 and £82 billion by 2014/15 through fiscal tightening measures estimated to total £45.1 billion.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    of 1

    Building the deficit mountain Chipping away National debts 106.

    6%
    2009/10 102.1%
    at the mountain As a % of GDP, 2010
    What is the deficit? This is what the
    government has to borrow each year to cover
    £178bn
    spending. This is different to its net debt,
    deficit 69.3%
    which is the accumulated total amount £3.5bn Increase in National Insurance
    65.0%
    Britain owes. The annual deficit has shot up
    56.9% 57.0%
    as the economy has collapsed into recession. £0.6bn Bank payroll tax
    This shows how it has built up - and how 32.6%
    Alistair Darling’s plans could bring it down
    £29.6bn Decline in
    borrowing as economy Canada Germany France UK US Italy Japan
    recovers
    How Treasury predictions have changed
    Projections of GDP growth for 2009
    2007 PBR 2008 Budget

    +2.75% +2.5%
    £4.2bn Do not renew temporary
    current spending policies
    £4.2bn Do not renew temporary 2008 PBR
    stimulus to investment spending
    £8.5bn Reverse temporary VAT cut -1.0%
    2009 Budget
    £2.8bn Reverse other temporary tax changes
    -3.5% 2009 PBR
    £5.6bn Revenues from new taxes on high income individuals
    £1.4bn Revenues from higher rates of fuel duties -4.75%
    £2.8bn Revenues from higher NICs charged to above-average earners

    £21.2bn Proposed reduction in current spending

    £14.1bn Proposed reduction in investment spending

    2013/14
    £96bn
    target deficit
    2008/09 £14.1bn Further decline in borrowing
    £88.1bn as economy returns to trend level of activity

    deficit 2014/15
    £82bn
    target deficit

    £45.1bn Additional fiscal tightening


    (higher taxes or lower current spending)
    Numbers are based on estimates of the effect of each
    measure on the deficit. Totals do not take account
    of other measures which may increase the deficit

    2007/08
    2006/07 £34.5bn
    £30.9bn deficit
    2017/18
    deficit
    The amount Including Including £42bn Including £3.2bn in
    £26.8bn
    target deficit
    added to the £25bn bailout of nationalisation of tax changes, £4.9bn
    national debt in Northern rock Bradford and Bingley, in one-off payments
    the financial £20bn and £25.5bn to pensioners and
    year bailouts of RBS and families with
    £17bn bailout of children, £4.8bn
    Lloyds/HBOS investment in public
    services, £6bn bailout
    of Lloyds and £32bn
    bailout of RBS

    2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18
    SOURCE: IFS, OECD, PRE-BUDGET REPORT

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