@hal
£350Bn borrowing by Labour before 2008 still has to be repaid. The cost of a debt needs to be measured against the availability of funds to repay it - so where is the money to repay it?

"The national debt is not a burden"
Are you a space cadet - what planet are you on? The £350Bn borrowed by Labour is enough to pay for 2 Japanese earth quakes or to install sustainable power in the UK so that we are a net exporter of power. However, the money was not invested but spent growing the public sector resulting in the UKs biggest peace time deficit.

Tell me what we got for the £350Bn and how it will generate the income stream to repay the interest and the capital. Then your statement "a necessary part of the economy" will be justified.

Indu Pendent, I thought you didn't believe in the " State Fairy ".

All this smacks on state intervention Indu Pendent, the government picking winners and losers.

I take it Project Ivanhoe, sorry I mean't Merlin, is now defunct? The Bankers get their bonuses without having to lend to SME's?

Have you been able to find the evidence showing Lagarde and the credit rating agencies criticising public sector pensions, or am I in for a long wait.

The government should increase borrowing. Fast. The only thing that will get us out of this recessionary mess is a large public works stimulus. Let's get the unused capacity doing something useful - how about building houses, schools and renewable energy generating capacity?

@Ivan White

The UK should have been better prepared for the credit crisis but Labour borrowed massively before 2008 and weakened the economy.

So why blame Ed (swaggers in a starched uniform)?

May be its because Ed is a close comrade of Gordon and they worked closely together on Gordon's PR message and plan for the economy? e.g. Gordon would consult Ed rather than talking to Alistair on the economy. This seems to have upset Alistair.

"is beyond comprehension " - its OK we are patient. The penny will drop eventually.

@hal

"The government borrowed very little before 2008"

Can you speak out of both sides of your mouth?

Office of National Statistics figures showing the raw government debt are useful. See the summary table M1:

http://www.ons.gov.uk/ons/rel/psa/eu-government-debt-and-def...

Government debt during Labour's term before adjusting for inflation and before the impact of the bank crisis show debt nearly doubling under the last government. To this needs to be added the increase of debt of individuals to assess the impact of the last government's effectiveness at managing the economy.

Government debt under the last government was:
1998 £410, 000, 000, 000
1999 £405 Bn
2000 £400 Bn
2001 £385 Bn
2002 £402 Bn
2003 £441 Bn
2004 £487 Bn
2005 £529 Bn
2006 £573 Bn
2007 £618 Bn
2008 £752 Bn

After 2008 government debt was boosted by the financial crisis - underwriting the accumulated liability for the government's guarenttee of the banks which steadily grew over the term of the last government. It means the above figures understate the true debt loaded on to our kids.

Its obscene of Balls to say the national debt fell under Labour or that Labour did not cause the national debt to risk massively.

Just looking at the total debt is misleading. You have to take into account the growth of the economy. If the debt doubles, and the size of the economy doubles, there is no problem!

The figure to quote is the ratio of debt to GDP. In 1997 this was around 42%, in 2007 around 36%. So as I said, the government did not overspend before 2008. It actually spent so little it didn't even keep up with growth in the economy.

Figures on www.ukpublicspending.co.uk

The national debt is not a burden. It is in fact a necessary part of the economy. Government debt is an essential part of the capital holdings of banks and pension providers. The interest payments are minimal, currently about 3% of GDP, in fact LOWER than nearly the whole of the 20th century!!!

@ Ivan White, I Don't care what job Ed Ball's did, he was still a key player and much more than that in Gordon Brown's Goverment! we are not going to let him off the hook that easily, and that has far more relevance then some people here who mention Margaret Thatcher when speaking of David Cameron, he was a teenage boy when she was Prime minister, so therefore he was not in her goverment so would not be blamed for the things she got wrong, unlike Mr Balls. would you link Ed miliband with Michael Foot, no you would not you would say that was ages ago, although Ed Miliband prehaps can be let off the hook as he was only a very junior minister at the time, Like it or not if Mr Miliband wishes for his new start then mr Ball's needs to go, and i like Ed Miliband.

I was really disappointed. I expected a lot more. Business rates need to be looked at in order to stay competitive with Ireland.

George Eaton, you have been spending too much time with Ed Ball's! The man who helped us obtain this crisis, which is a dept crisis not a growth crisis, a lack of growth that has happened because of the dept crisis but we must never forget the cause, Labour, The banks and Europe, And you can never spend your way out of a dept crisis!
Prehaps you will also be interested to know that Standard and Poor, the credit company that was going to decrease our credit rating but changed it's mind at the very beginning of this parliament has just reaffirmed our AAA rating for now but has said it would reconsider if the goverment backed away from it's commitment to fiscal austerity.
Mr Eaton please share that information with your good friend and deceiver Ed Balls who said we had money after they spent it all and who also said these tough measures were not needed, using the dept crisis to play political motivated games is very wrong and so beneath the decent,hardworking people in the Labour party, but the member's of your goverment have been that for many years And why Mr Ball's have you or Mr Miliband not bothered to mention that much about Europe last week,you cannot run this country like a large parish council forgetting the outside world! we have just heard that Greece cannot keep it's deficit requirement that was needed for more bailouts from europe, greece cannot pay it's way in the world and nor could we if we follow Mr Ball's deficit reduction plan and you cannot have growth with reducing your deficit or the growth will be on sand! Standard and poor's reaction also proves who is heading in the right direction,so how about a little truth from the Labour Party.

hal
'Just looking at the total debt is misleading. You have to take into account the growth of the economy. If the debt doubles, and the size of the economy doubles, there is no problem!'
hahahahaha...fatastic stuff Hal.
So what happens when the tax take collapses?? i.e. the economy slows- it's not all straight lines in nature. There is a cycle to life, to economies 9unless, ahem, u've managed to abolish those cycles that govern nature lol). These are inescapable laws of physics (at least in the gross world.
Very funny though, the economu doubles so twice the debt is ok... genius quote, encapsulate everything.
Hey, if get a payrise shall i go out and double my debt? oh no?
And the best one, regarding repaying debt;
' undesirable as it is an important part of the financial system.'
hahahahaha very good, genius.
Seriously though, I think might be a debt junkie. You can't see a UK without debt?
Well, that's your view, and Im entitled to mine right, it being a democracy- So hear this- I and many others don't want our kids growing up paying for bullshit vote buying programmes so clown politicians could stay in power... and there is a growing number of people who are seeing things my way, that's one thing u can bank on. You might enjoy the feeling of always being the servant of the markets, not for me pal.

When Alistair Darling was considering credit easing for SMEs in 2009, Osborne called it "the last resort of a desperate government."
Good to know he hasn't lost his self-awareness since entering government.

Were you listening to the same speech as I was. I thought the speech was vaccuous and lacked substance. The Greek people will never be able to pay the debts enforced upon them by the Germans and French. The only real bold initiative is to wipe the slate clean. Since the creditors will never accede this default request, the Euro zone, including the UK is likely to remain in recessionary mode for years to come. The debate about Britain having its own currency and therefore immune from Eurozone woes is completely besides the point. The deficit reduction programme of boy George is more likely than not to lengthen the time the UK remains in recessionary mode. The crass insistence on deficit reduction proves how limited Osbourne’s understanding is of elementary A level economics. I wager that more gloomy times lie ahead for the Uk economy. I do not anticipate any sort of recovery until at least 2020. It is cleat George Eaton that you do not understand Economics. I feel sure that were you to offer me a job I could do a btter job of dissecting the Osborne economic plan (or lack of it)!!!!!

We are trying a " Contractionary Fiscal Expension " at the moment, and it's not working.

I see Indu Pendent is ignoring the latest manufacturing data, orders for exports, are at their lowest since May 2009. Manufacturing is also shedding jobs.

@mcquade

See the link below, it is also from 2009, Osborne was going to ban " Large Bank Bonuses " and make them use the money for new lending.

http://www.guardian.co.uk/politics/2009/oct/26/george-osborne-bank-bonus...

Hold on a minute, according to neoliberal Conservative ideology the state should be stepping back and letting the private sector takeover.
With credit easing, Osborne is admitting a market failure and backing private businesses with (our) public money. Even giving the banks our money directly has not encouraged them to lend. This is nothing short of a socialist policy.

Funny how there was no similar guarantees for Sheffield Forgemasters or contracts for Bombardier. Could it be the government don't really want large manufacturing in this country as they are the backbone of union membership?

So this is it. All that he can come up with, anything rather than lose face. Come on George (Osborne) bury your pride and get round the table with Ed Balls.

Hahahah

Mrs M L Bonwick-Jones. For your information, Ed Balls was Education Secretary from 2007 to 2010. Why you should be blaming him for the global credit crisis is beyond comprehension - rather like most of the drivel that you post.

http://cuttingedgeuk.proboards.com/index.cgi

@Indu, the national debt has been with us for 350 years now. It is never repaid; this would be both practically impossible and also undesirable as it is an important part of the financial system.

The interest payments, currently at 3% of GDP are low, and sustainable indefinitely. For example, in 1985, during the Thatcher years, the interest on the national debt was 4.5% of GDP. Was that a problem then?

This is completely a non-problem. Instead we should be worrying about worryingly high levels of unemployment and the fact that the economic recovery has run out of steam. What we need is strategies to restart the recovery and use the spare capacity in the economy to good effect.