How long will it take to pay back government borrowing?
The subject of excessive government borrowing to try and refloat the UK economy is never far from the headlines with literally hundreds of billions of pounds spent over the last few months. While nobody really ever talks about how this money could be repaid there is no doubt that it will take literally years and years to replenish the government budget. So how exactly can a future government repay a debt which is set to reach £1 trillion?
The main repayment method for the government is to increase the tax on UK workers and the consumer via direct and indirect taxation techniques. The ideal scenario is one which sees the UK economy recover and continue to grow which will allow the government to increase taxes and replenish the national budget. In reality the amount of money which is outstanding cannot be collected in just a couple of years and many experts are suggesting it will take nothing less than a decade to balance the UK books again.
Rather bizarrely, the UK taxpayer has already taken a massive hit due to the growing number of rescue packages but is set to take an even larger hit in the future to try and repay the debt. Future UK governments will no doubt suggest cost savings in the public sector but these will have little impact on a debt which has reached £1 trillion.
Share this..
Related stories
Diageo and Unilever sound alarm bells over UK taxes
Despite the fact that the UK government has forged very strong relations with businesses in the UK over the last decade the ongoing crusade to increase tax income for the authorities looks as though it could seriously backfire. Diageo and Unilever, both multinational companies, have today sounded the alarm bells for the UK government suggesting they would look at possibly moving overseas unless th...
Read MoreUK banking sector still under a cloud
While Royal Bank of Scotland shares increased today they were the only benefactors in the UK banking sector after a very downbeat report regarding bad debts. Amid suggestions that Royal Bank of Scotland will be able to spin off a number of overseas activities to pay down its current debt pile, other banks were not so lucky with the likes of Standard Chartered, HSBC and Barclays coming under pressu...
Read MoreWorkers contribute too little to company pensions
Workers are not paying enough money into many new company pension schemes, advisory firm Mercer has warned. According to a new report by Mercer, which looked at 400 employers, operating 600 "defined contribution" schemes, contribution rates have risen by only 0.9 per cent in the last five years - in 2002 employers and staff paid in an average 9.5 per cent of salaries, and now pay in just 10.4 per...
Read MoreWhen will UK savings rates start to improve?
Over the last few weeks we have seen signs that UK savings rates are starting to edge forward although the fine print of many of these "attractive" offers can be very different to the initial impression. The vast majority of these savings schemes, which offer upwards of 4% interest, require investors to lock in their savings for a number of years in order to access what are significantly higher sa...
Read MoreThe cost of UK education
The UK further education system is vital to the long-term success of the economy but the integration of EU education has opened the door to potential hidden costs for the UK taxpayer. Figures from the Students Loan Company show that of the 2240 EU students granted permission to study in the UK only 1580 have begun to repay their loans.
While further education in England, Wales and N...