National debt amounts to '£138,000 per household'

A NEW book by a right-of-centre think tank claims every household in Britain owes £138,000 of national debt.

According to The Hidden Bombshell by Braintree MP Brooks Newmark and Ryan Bourne from the Centre for Policy Studies, British public debt now stands at 3.6 trillion, more than half as much again as the official government figure.

According to the Office of National Statistics, public debt is 2.25 trillion, but Mr Brooks and Mr Bourne argue that it is in fact much greater when private finance initiative (PFI) contracts worth 193 billion are brought on to the books along with public sector pensions liabilities of just over 1 trillion.

This means that official estimates that the debt is worth 85,954 to each household have to be recalculated to more than 138,000. The book also suggests that despite the austerity measures the problems are likely to get worse.

It says: "This is because the government will continue to run a budget deficit until the last year of the parliament.

"If the government had not embarked on its fiscal consolidation programme, however, the official net debt would have increased much more rapidly."

It also argues that if Labour's approach to the economy by cutting slower was taken on, the problem would be even greater.

It adds: "It is clear that the extent of UK indebtedness is such that the coalition must be relentless in its efforts to cut the deficit as quickly as possible."

Scottish Secretary Michael Moore said: "The events in Portugal are a stark reminder of why this government had to act decisively to rescue Britain's public finances from the brink of catastrophe. We are now in a much stronger position to get people into to work and to grow our economy in a sustainable manner."