Brian Monteith: Prudence until debts are paid

Cameron and the rest of the coalition must not take their eye off the ball when it comes to reducing the deficit. Picture: Getty

Somewhere in a London club, or maybe a cramped office, there are some Conservatives knocking back a few pink gins and slapping each others’ backs. It has been a decent week, maybe even a good week, and good weeks are rare in government when the European Parliament elections are about to kick you in the teeth.

While a YouGov poll confirmed Tory fears that the party would come third in the EU elections later this month, that outcome has already been discounted. It will be more embarrassing for Labour if the UK Independence Party pushes it into second place. The important backstory for Conservatives was how the YouGov poll continued to show David Cameron’s approval ratings among all voters (38 for to 54 against) continuing to trump those of Ed Miliband (26 for to 62 against).

For the Leader of the Opposition a year before a general election, that’s not good news. Even in Scotland, David Cameron’s approval ratings of 29 to 65 are superior to Miliband’s 23 to 67.

But it was also the week that Nigel Farage chose to give the Newark by-election a body swerve. This was a win, win – for not only does it ensure that Farage does not gain the credibility of winning a Tory seat in a by-election, it also allows him to be presented by his enemies as weak and evasive. The reality is, I suggest, those that like Farage will think he did the right thing and those that don’t will believe he didn’t – but Conservatives are cock-a-hoop nonetheless.

Then there was the first-quarter economic growth figures of 0.8 per cent that augur well for a sustained economic recovery faster than any other major advanced economy. Unemployment is falling across the UK (in every constituency but one), youth unemployment has fallen by a third, in the past year eight out of ten jobs created were full-time, and average earnings are outpacing price rises (even before tax reductions). But for all the underlying positive economic news that Conservative strategists think will give their party a good fighting chance next year, there remains a dark cloud that threatens to rain on their parade – the continued growth of the UK’s national debt. This week, just to make sure we don’t forget the magnitude of the burden we all continue to carry, the Taxpayers’ Alliance is relaunching its debt clock – ticking away on its website, running up numbers most of us struggle to comprehend.

When I started writing this column, the debt clock was at £1,280,206,153,563; by the time I had finished nearly two hours later, it had climbed by more than £20 million to £1,280,226,106,113. The national debt will be £137 billion more at the end of this year than was at the beginning.

Of course, the coalition government will point to the reduction in the deficit and the prospect of reaching a surplus by 2018, but the problem remains that until a surplus is achieved and some debt is paid off instead of being added to, it will increase at a terrifying rate because of the interest payments. To give some context, the UK spends £38bn on defence but a staggering £52bn on debt interest payments.

Nationalists might think the scale of UK debt need not concern them, but they would only be fooling themselves. To have any credibility in the international financial markets, an independent Scotland would be expected to take its share of that debt – most of it run up in living memory and with a great deal spent on Scottish needs – from industry to welfare and infrastructure to pensions.

The role of Scots politicians in creating that debt also cannot be ignored – and would not be missed by the rest of the UK, were it to be saddled with all of it. Defaulting on a debt share would also mean losing access to corresponding assets – from shares in ownership of the rail network to embassy buildings – causing further great expense and bitter divisions in the negotiations of separation. Such festering grievances would hardly become the velvet divorce that the SNP likes to suggest.

Accepting the debt share would, however, then introduce a Scottish government to the scale of the problem the debt clock points to – and the fact that, be it the UK or Scotland, we continue to live beyond our means. At least the Westminster government seeks to address this difficulty, with continued talk of having to constantly review expenditure and consider further public spending cuts into the future. It plans to reduce the deficit to then tackle the national debt. This is only right, for if we do not then we are telling our children and grandchildren to pay for the lifestyles we enjoy now.

The SNP has no intention of reducing debt, be it within the context of Holyrood as a devolved or sovereign parliament. It wants to borrow more and make uncosted commitments beyond that nominal limit.

Politicians who continue to play the old game of retail politics by offering yet more “free” public services that they know will become the debt of future generations should be condemned as morally repugnant. When Nick Clegg seeks to expand “free” school dinners beyond low-income families to include the middle classes (attempting to shore up his core vote), it should be seen as postponing the day when we can begin to pay for our consumption of the past. When Alex Salmond offers to extend “free” childcare – but is 40,000 mothers short in his calculations about how to fund it – he should be seen as guaranteeing that an independent, spendthrift Scotland would be heading for a crash.

With all of the economic good news, there is a real danger that our politicians forget how we ended up in the debt-ridden mess of their making and seek to spend the revenues of the future when we still need to pay off the nation’s debts. As we approach the general election of next year and as we approach the Holyrood election of 2016, the debt clock is a timely reminder of how we need to continue with a prudent approach to public spending.

The public should remain suspicious of any politician who denies we are living beyond our means by offering new bribes in exchange for their votes and tell them their time is up.

• http://www.debt-clock.org