On Monday we heard from the Chancellor about Northern Rock. He gave us no figures, but it appears they have already lent ??25 billion of our money to the mortgage bank, and have guaranteed maybe a further ??25 billion. This money is either borrowed, or will have to be borrowed if the guarantees trigger.
Later that day the hapless Chief Secretary to the Treasury came to push through a Bill to give away part of the UK’s rebate on EU contributions – one of Tony Blair’s EU poison pills for Gordon on takeover.
As we have come to expect, the very short Explanatory Memorandum supplied with the even shorter Bill cotained at least three errors, along with an errata sheet. Once again a Labour Minister had failed to supervise papers coming to the House properly.
Andy Burnham wanted to disguise the extent of the giveaway, but had to admit that the gross cost of the EU to the UK over the next seven years, after allowing for the remaining rebate, will be a massive ??70 billion. He and Kitty Ussher, the Economic Secretary to the Treasury, seemed to be find it difficult to grasp that it is the gross amount of our contribution (after rebate) that taxpayers have to pay. The fact that some of the money is subsequently spent in the UK does not mean that money is “free”. It either has to be borrowed and repaid with interest by taxpayers, or paid for from higher taxes in the first place.
So on the same day we saw the governemnt announce ??95 billion of extra borrowing – and more possible for Northern Rock – on just two spending items, the EU and a mortgage bank. They will argue that the EU money is already in their spending figures, but it is a sobering thought that they want to commit ??95 billion of money they do not have to these two causes. If we borrow the ??95 billion at 5% for 20 years that means UK taxpayers will pay ??180 billion, assuming we do not have to borrow the interest payments as well! Let’s hope if they get the money back from Northern Rock they use it to repay some debt.
How dare Mr Darling complain that the odd Conservative tax cut would create a “black hole” when he has two such massive black holes in his own figures.
(If you are interested in the EU contribution debate see the link to my speech in the debate )