Britain’s government debt smashed through £1 trillion ($1.59 trillion) for the first time yesterday – a staggering £40,000 per household.
Campaigners branded the milestone ‘terrifying’ and warned that taxpayers will have to foot the bill for decades to come.
Debts of £1trillion – an almost unimaginable figure with 12 zeros equivalent to one million million pounds – mean Britain will pay interest of £43billion this year alone.
That is nearly £120million a day and more than the government spends on defence.
It comes after unprecedented levels of borrowing by Labour to pay for lavish state spending and the bailout of the banking system.
The national debt stood at just over £300billion a decade ago and was less than £500billion five years ago.
But it exploded while Gordon Brown was in power and boom turned to bust.
Treasury sources said it underlined how important it was to press ahead with the Chancellor’s austerity measures.
George Osborne plans to slash annual borrowing of £156billion under Labour to £35billion by 2014-15 through £81billion of spending cuts and £30billion of tax rises.
The £1trillion debt figure was recorded at 5.15pm on the UK National Debt Clock, an online British version of the billboard-sized running total of U.S. debt in New York.
But it does not include items such as the cost of public sector pensions and private finance initiatives – or people’s own mortgages, credit cards, overdrafts and personal loans.
The TaxPayers’ Alliance said the real national debt was close to £8trillion – or more than £300,000 per household.
Emma Boon, campaign director at the Alliance, said: ‘This is a terrifying new landmark in the nightmare of our national debt and it is ordinary taxpayers that will be footing the bill.
‘Every man woman and child will be paying for successive governments’ profligacy for decades to come if we don’t make spending cuts now.
‘What’s even more worrying is that the real national debt could be much higher.’
Labour claims that the pace of Mr Osborne’s spending cuts are ‘a risk to growth and jobs’ and could plunge the British economy back into recession.
The Centre for Economics and Business Research last week said the chances of a double-dip have risen from one in 10 to one in five since the Chancellor outlined his plans in October.
But other forecasters are more optimistic.
The Ernst & Young Item Club yesterday forecast growth of 2.3 per cent this year and 2.8 per cent in 2012.
Tory MP Matt Hancock, a close ally of Mr Osborne’s, said: ‘Labour maxed out the nation’s credit card and burdened our children and grandchildren with £1trillion of debt.
‘Yet Ed Miliband says he’d do it all again. Until Labour admit their mistakes they cannot be trusted with the nation’s finances.’
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