Published: Times Letters, 22 October 2010
Sir,
You criticise Labour's alternative policy to the deep-seated spending cuts of the coalition, saying that Labour's argument "fails to address how the interest on the public debt will be paid, or the risks of a loss of confidence by investors in sterling" (leading article, Oct 20). The Irish experience demonstrates how credit rating agencies can change tack extremely quickly on the back of draconian cuts and reduced growth.
On public debt, it is worth noting that in 2014-15 the debt burden will be reduced by £3 billion; £4 billion was cut from public expenditure by the Labour Government from 2007 onwards, by massively reducing unemployment and the outlay on welfare benefit that results from it.
A total of £3 billion is not the figure that most people have in their head when they are considering the "cost of borrowing" and the outstanding debt that this country would have to bear by lengthening the time that we took to pay off the deficit. After all, not only did Britain pay off the post-Second World War deficit in 2002 but, remarkably, the last 16 million euros of debt arising out of the Versailles settlement and reparations from the First World War were only paid off three weeks ago by the German Government.
Rt Hon DAVID BLUNKETT MP (Lab, Sheffield Brightside and Hillsborough)
Comments