Azara Blog: Cameron spouts nonsense about UK debt

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Date published: 2007/09/16

The BBC says:

The government is to blame for the crisis at Northern Rock, Conservative leader David Cameron has said.

Writing in the Sunday Telegraph, he accused Gordon Brown of presiding over a huge rise in public and private debt.
Ken Clarke, the last Conservative chancellor, said the problems at the bank should not lead to tough new restrictions on borrowing.

"I think the development of ready access to credit is one of the best ways of boosting a market," he told , told BBC Radio 4's Broadcasting House.

"So I do hope the reaction to the recent nonsense is not that we need a great flood of new regulation, that everybody gets hair-shirted again."

Why oh why didn't the Tories choose Ken Clarke to lead them, he at least has a scintilla of sense. In particular, Cameron is just plain lying when he says that Brown has presided over a "huge rise" in public debt. Of course the absolute value of the debt in 2007 is higher than it was in 1997, because the economy has grown so much over the same period. But what really matters is the debt per GDP. And, surprise, surprise, government statistics show that that was at 43.8% in 1997 (the highest level since the 1980s), which was the last year the Tories were in power. In July 2007 it stood at 36.4% (but going up), way lower. If Cameron wanted to make a real point he would have noted that these statistics pretty much reflect the state of the international economy, rather than the actions of the UK government. (And the Labour government has also hidden some debt via PFI.)

And as for private debt, the main problem, of course, is house prices. Prices have rocketed so of course debt has as well. And why have house prices rocketed? Because Britain is not building enough houses, because the privileged elite (led by the Tories) refuse to allow enough housing to be built. Cameron's Tories are a big part of the problem, they are not part of the solution.

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