David Martin's EU Tribune

Don’t fall for the old Tory Con/Dem trick – they haven’t!

On returning from election monitoring in Tanzania I read that the UK Chancellor has been under attack from Andrew Tyrie MP, the Tory chairman of the Treasury Select Committee, for ‘misleading the public’ with his claim that the UK was near bankruptcy in the weeks after the Con/Dems took power.

Mr Osborne was further accused of ‘using inflammatory language’ to justify massive public spending cuts which will impact more severely on the poor in UK society. The claim that Britain was ‘on the brink of bankruptcy’ was ‘a bit over the top’.

This is borne out by the figures we have from Europe and further afield. How could Britain be on the ‘verge of bankruptcy’ when other major economies such as France, Germany, Italy, Japan and the US have higher debts? The UK has the lowest debt as proportion of GDP amongst the G7 countries.

Furthermore the UK is in a better position to deal with the aftermath of the banker’s crisis than many EU member states. The vast majority of UK Government debt (70-80%) is held within the UK whereas in countries like Greece the vast majority of debt is external. Debt maturity for Greece, Ireland and Portugal etc is between 6-8 years on average whereas the UK’s is well over 12 years. The UK is less vulnerable to short term speculation than many of our partners.

As for the need to reduce public spending to pay for bankers mistakes, public spending in the UK, as a proportion of our economy, is lower than France, Italy, Austria, Belgium and the Scandinavian countries.

If we look at debt historically, we will see that the current level of UK debt is not unprecedented: debt never fell below 100% of GDP between1920-1960. In fact, UK debt reached 250% of GDP after World War II and we still managed to create the NHS, the welfare system, comprehensive schooling and a massive investment in council housing.

It is not Britain that is bankrupt it is old capitalist ideas of George Osborne – ‘make the poor pay’ – and his Liberal democrat cronies that are bankrupt