Letter: Debt we all owe

It is amazing that Andrew Anderson (Letters, 29 March) thinks that a total public sector net debt of 60.3 per cent of GDP is "not especially high". Apart from the fact that there is more latent debt which is off the balance sheet, all debt has to be serviced.

Thanks to Gordon Brown continuing to run deficit annual budgets from around 2001 we now have to pay service costs of 43 billion per year, larger than the defence budget.

In real terms if we did not have to service this debt our situation after the recent banking crisis and recession would be much better. Bill Jamieson, like most responsible financial journalists, was pointing out the problems with excessive debt in his comment article.

Mr Anderson might consider having borrowings that high not to be significant, but before 2008 Gordon Brown announced his "Golden Rule" of keeping debt below 40 per cent of GDP and of only borrowing to invest and not to finance current revenue spending.

At the moment, and for most if not all of this parliament, it is not going to be possible to satisfy either of these rules.

There is a political conclusion connected with this year's deficit being nearly 10 per cent of GDP and that is the previous administration spent too much.

As far as the argument between cutting public spending or increasing taxes goes, with personal working taxation sitting at nearly 46 per cent (income tax, NI and employer's NI) and VAT at 20 per cent on most things that can be bought with the remaining 54 per cent, it is difficult to see how there is any option to increase tax further without ruining the economy.

The fact is we have a public sector cost which we cannot afford (ironically partly due to the high levels of debt interest); pointing this out is neither misleading nor economic illiteracy.

Bruce D Skivington

Strath

Gairloch, Wester Ross

Bill Jamieson's columns are always worth reading, both for pleasure and for profit. But his piece about the national debts (28 March) should be set in neon and permanently illuminated.

Why have politicians got us into such a mess? It is not that they are ill-intentioned or corrupt - very few of them are - but that they harbour an understandable desire to get elected.

And it is our fault that we measure their worth by the blandishments they put before us.

Peter Schwarz

Kirk Brae

Edinburgh