At the end of 2012-13, the Government’s borrowing stood at £1.18 trillion. In 1997 when Gordon Brown took over the nation’s finances, the national debt stood at £352 billion. In the next 12 years he doubled the national debt mainly through the poorly designed Tax Credit system sayHarris & Co accountants Northampton who specialise in providing innovative accountancy services to ambitious small and medium sized owner managed businesses in Northampton.
Most economists agree that current debt levels at not sustainable and need to be reduced by a programme of the Government spending less than it raises in taxes.
Despite all the talk of “the cuts” by the Coalition, in 2012-13 the Government still managed to spend £121 billion more than it received and so this had to be borrowed.
On Wednesday we have the spending review, and you’d expect departments to savaging their expenditure plans. However, according to PWC’s analysis of the figures provided by the Office for Budget Responsibility, public spending will barely fall over the next seven years under the Government’s “austerity” plans.
The analysis reveals that total public spending will fall by only 0.3% in real terms in the seven years to 2017-18.
Cuts? What cuts? Looks like we are in for high levels of taxations for years to come, instead of reduced Government spending!