Chancellor Rishi Sunak’s extension of the government’s furlough scheme adds vast sums to a growing cost of the pandemic and confirms that the government will be supporting incomes for the foreseeable future. But Sunak doesn’t need to worry about the size of the debt, argues New Statesman political editor Stephen Bush.
The government will be able to pay its debts as the UK grows vastly wealthier over time, a point proved by history, he writes. “In 1835, the British government took out a loan of £20m to reimburse slaveowners when it abolished slavery, which was then a vast sum and far in excess of anything governments had ever borrowed for one-off expenditure before, equivalent to around £17bn in today’s money. The taxpayer finally finished paying off that loan in 2015.”
The bigger problem is achieving growth, he argues. You can read why in the full piece.