Britain's Five Trillion Pound Nightmare
03:10 - Tuesday 16 November 2010 - In Categories UK News, Money, UK Videos
Did you know: if you collected a fifty pound note every second it would take 3,000 years to accumulate 4.8 trillion pounds – the amount British taxpayers owe in debt?
Channel 4’s documentary, Britain’s Trillion Pound Horror Story, investigates how the debt got so large and looks at practical ways to reduce it.
Watch it here
This documentary dogmatically peddled a number of dangerous and highly selective half-truths.
Firstly, it failed to place the UK debt in its current historical context. Seen as a proportion of GDP current UK debt levels are far from being unprecedented (see http://econ.economicshelp.org/2010/03/national-debt-facts.html). Nor is the trend continuously upward: for example, the last government reduced the national debt for the first five years it was in power. There are reasons for concern (mainly the deficit), but not for panic.
Mr Durkin seriously under-played the role of the banking crisis in all of this. This is the true cause of the crisis that has affected most nations in the Western world many of whom, for years before, were ruled by right-wing parties sympathetic to the documentary’s laissez-faire views. In fact, there is a very strong case for arguing that it was economically neo-liberal views, and consequent financial deregulation, that directly caused the issue with the banks. The £73 billion figure quoted for the cost of the UK bank’s bailout is way under other sources (see http://www.independent.co.uk/news/uk/politics/163850bn-official-cost-of-the-bank-bailout-1833830.html ). The most pessimistic estimates of the UK national debt (at around £4 trillion: http://www.thisismoney.co.uk/news/article.html?in_article_id=509002&in_page_id=2), lower than the figure quoted in the programme) include between £1 trillion and £1.5 trillion for the bailout of the Royal Bank of Scotland and the Lloyds Banking Group. This figure also obviously excludes the effect on government revenues, in terms of falling tax receipts and increased welfare costs, of the recession that was triggered by the banking crisis.
Bizarrely, Mr Durkin also seems to argue that any task performed by the public sector has no value, and that the only source of value is activity by the private sector, as if a doctor saving a life is adding less value than a speculator in sub-prime mortgages, or as if investing in education doesn’t improve a nation’s wealth-generating capacity. If this is truly Mr Durkin’s economics it isn’t so much social science as an ideology legitimising the rule of a global corporate ruling class, a sort of Great Chain of Being or a Mandate of Heaven for the 21st Century. Mr Durkin’s heroic “private sector” is constantly talked about in terms of “manufacturing”, ignoring the fact that most individuals currently working in the UK private sector have lives that feel about as meaningful in terms of “making a difference” as characters in an episode of “The Office.” He also requires us to forget that it was the economic neo-liberals who allowed the massive contraction of UK manufacturing in the eighties (weren’t we all supposed to get those “service sector jobs”, about which Mr Durkin now has so many doubts?).
The documentary was correct in identifying Hong Kong as an economic success story in terms of raw GDP growth, but Hong Kong is now the most unequal society in Asia. Perhaps more people would prefer to live in the Scandinavian countries that have followed a left of centre path for decades, with their world-leading happiness indices (see http://en.wikipedia.org/wiki/Satisfaction_with_Life_Index for example) and their solvent economies despite the banking crisis (see http://www.guardian.co.uk/news/datablog/2010/may/27/debt-deficit-oecd-countries-data#data).
We have to give Mr Durkin the benefit of the doubt and assume that he is merely dangerously delusional (just as he is about anthropogenic climate change, as the producer of the “Great Global Warning Swindle”) rather than a servant of the vested interests that brought the global banking system to the point of collapse and promise to do the same with the global environment.
Shame on Channel Four for broadcasting this without staging a debate after the programme (as had happened with the documentary on the Green movement in the same slot the previous week) or scheduling a counter-balancing programme in the same slot in another week. A somewhat sinister conclusion would be that they are themselves running scared of right wing elements that are currently in control of the UK Government and seeking to delude the world into failing to notice that the corporate capitalist system that they stand for has just failed as completely as Stalinism. And now the UK is to help out the Irish banks…
