Britain’s colossal debt mountain has cost taxpayers £520 billion in interest payments alone since the country last balanced the books nearly 20 years ago.
Profligate Chancellors have embarked on a borrowing binge since Britain was last in surplus in 2000-01 – pushing the national debt up nearly six-fold from £317 billion to £1.8 trillion.
Debt interest payments have totalled £520 billion over that period – or about £21,000 per household – leeching much-needed resources away from public services.
The figures pile pressure on chancellor Philip Hammond to control the nation’s finances
The Government is due to spend another £41.5 billion servicing the debt this year – nearly as much as it spends on defence and more than the entire transport budget.
The figures pile pressure on Philip Hammond to get a grip on the nation’s finances in what is shaping up to be a crucial Budget for the Government next week.
The Chancellor is struggling to return Britain to the black by the middle of the next decade – leaving Britain facing the longest period of deficits since Napoleonic times. He is facing a barrage of demands for extra cash to increase funding for the NHS, give public sector workers a pay rise, ease the burden on students and kick-start housebuilding.
The Treasury is thought to have already rejected calls from Communities Secretary Sajid Javid to sanction a £50 billion housebuilding programme given the parlous state of the public finances.
But on current projections that money will be spent on debt interest payments in about 15 months.
Mark Littlewood, of the Institute of Economic Affairs, said: ‘These figures make for depressing reading and reveal just how ineffective the Government’s attempts to get the public finances under control have been. Ever-accumulating debt is not the way to achieve a healthy economy.
The Treasury is thought to have already rejected calls from Communities Secretary Sajid Javid to sanction a £50 billion housebuilding scheme
‘The Government must ensure that fiscal responsibility is strengthened so future generations are not saddled with a mountain of debt.’
John O’Connell, of the TaxPayers’ Alliance, said: ‘The Government’s addiction to overspending has been out of control for far too long. The scale of the debt is now so great that more than £40 billion will have to be spent on interest payments alone this year.
‘That’s money that could have gone on new hospitals, or scrapping beer duty and inheritance tax. Philip Hammond must ensure that his Budget puts Britain back on the path of sound finances.’
With the national debt spiralling towards £2 trillion, the Government is forecast to spend another £200 billion of taxpayers’ money on interest over the next five years.
But it is feared the debt bill could be even higher as high levels of inflation push up the cost of index-linked bonds and the Bank of England raises interest rates.
Mr Hammond has previously indicated he will aim to balance the books ‘by the middle of the next decade’.
But this means Britain may not run a surplus again until 2025, marking the longest period of consecutive deficits since the country was stuck in the red between 1793 and 1817.
Some fear the Chancellor could be preparing to use the Budget to give himself more time by indicating the public finances may not be back in balance before 2027.
Experts at the Institute of Economic Affairs warned earlier this year that the ‘irresponsibility cannot continue’.