Where has the Today programme been for the last year? This morning I awoke to hear them asking someone if the UK government was borrowing too much and if it could find it difficult to raise all the money, as if this were a new question. The interviewer then rushed to retail the government’s misleading figures, reassuring us that the UK is lightly borrowed. That was scarcely true even before the government bought one of the largest banks in the world. You needed to add PFI, PPP, Northern Rock and Network Rail into the figures for starters. Since buying RBS the opposite is true. The UK is now a large bank with a medium sized government attached. Did they not hear me warn in Parliament that RBS was too big for the state to handle easily? Do they not follow the arguments about how much of the £2 trillion we need to add to the stock of UK government borrowing annd liability?
When they started buying RBS shares I offered a cheaper and better way of keeping it going and forcing it to cut risk and slim down. I urged them to protect the taxpayer and not buy shares with taxpayers money. I pointed out that it could lose them a year’s defence budget quite easily. So far RBS has lost £24 billion since the government bought shares. We now learn that it could lose much of the next £19.5 billion taxpayers are being asked to tip in. In other words the official view is that RBS is now likely to lose us a year’s defence budget, and could go on to do worse than that.
It would not be not responsible of the BBC to raise the issue of national financial overstretch in a sensational way. They do, however, have a duty to report what people in the debt markets think, as they control our futures. They should do a better job balancing the voices from Parliament, where some of us have been warning for months that the government is taking too much financial risk and overcommitting the taxpayer. That was why I voted both against the VAT reduction, and against the banking support Money Resolution. We cannot afford either easily. Neither provide taxpayers with value for money.There are better and much cheaper ways of getting us out of this hole.
This is blind folly. No-one sensible predicts national bankruptcy, but any sensible analyst would conclude the UK is trying to borrow too much. You cannot cure a crisis of overborrwing by borrowing more. You cannot solve the bad debt problem by simply transferring it to the long suffering taxpayer.