Tel. +44 (0)20 7287 4414
Tel. +44 (0)20 7287 4414
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

Bruges Group Blog

Spearheading the intellectual battle against the EU. And for new thinking in international affairs.

Debt Flies Beyond our GDP; how has Parliament Aimed so High?

consumer-47205_1280 Debt Burden

Britain's political scene is sporadic, but one constant stayed through it all: skyrocketing national debt poor judgment in allocating public spending. Since 1988, national debt has gotten out of control, and now sits beyond GDP.  

Parliament's economic judgment have faltered post-Thatcherism, with successive prime ministers failing to replicate her economic stability. It is clear, therefore, that we should look to past successes to secure a stable future.

The radical transformation of the nation's economy worked. Thatcher's Conservatives sought to manage first, then grow— curving inflation. Tax cuts across all bands encouraged buying and selling that stimulated productivity. Britain's slump from the winter of discontent came to an end.

1988 saw the nation stabilised by restrained government spending in free markets; the public sector showed this. According to the Office for National Statistics, national debt sat at a mere 31% of GDP, then shrinking to 22.9% in 1990. Government spending also focused on the people: social security and welfare' - 30% , health - 13%, education 12%. A far cry from the burdens of today's economy.

According to the International Monetary Fund, the UK is 6th in the world for the largest central government debt by percentage of GDP (2022). When comparing nations with debt recorded in the same year, this rises to 3rd, accompanying Greece (203.3%), and Japan (216.2%) on the podium. This is nothing to celebrate. This parlous state of public finances could have been mitigated were borrowing done sparingly.

Money does not grow from trees, nor does it grow from bonds, yet it seems the former government understood neither. Excessive borrowing— over £140.6 billion by the central government (2024 ONS)— leads to comically large interest payments. The Office for National Statistics reports £20.5b was borrowed in April 2024, the highest reported since 2021, drowning the nation in £4 billion in interest.  

True: More is invested into social services today than in 1988.

The Institute for Fiscal Studies (2022/23) reports an increase in social security for pensioners, working-age, and children (22.4% combined), health (18.3%), though a fall in education (9.1%, compared to 12% in 1988). Regardless, the reckless spending of the former Conservative government cancels out the sentiment:

  • £25 billion for public funds spent on the abandoned HS2
  • £202 million worth of Covid contracts lost to fraud
  • £9.9 billion wasted on faulty Covid PPE
  • £320 million spent and unrecovered from Rwanda Scheme

Were governments to not haphazardly spend borrowed funds on ambitious projects, perhaps national debt would not have risen above the 100%s.

Following Stamer's appointment on Friday, it's hard to tell whether putting "wealth creation [as] our number one priority" will dig Britain out of an ocean of debt. Though even if the GDP/debt ratio shrinks, it is a decade-long waiting game till we see it below 100 again.

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Director : Robert Oulds
Tel: 020 7287 4414
Chairman: Barry Legg
The Bruges Group
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Founder President :
The Rt Hon. the Baroness Thatcher of Kesteven LG, OM, FRS 
Vice-President : The Rt Hon. the Lord Lamont of Lerwick,
Chairman: Barry Legg
Director : Robert Oulds MA, FRSA
Washington D.C. Representative : John O'Sullivan CBE
Founder Chairman : Lord Harris of High Cross
Head of Media: Jack Soames