MR Alan Johnson of the Green Party sends us all seasons greetings. Unfortunately, his good wishes are accompanied by some muddled thinking.
The Office of Budget Responsibility in their latest report tell us that the cost to the taxpayer of the bank bailout in 2008 was £134 billion. Some of this has already been repaid and the outstanding amount is £81 billion. The taxpayer is owed £41 billion in outstanding loans and the current value of the shareholdings in RBS and Lloyds is £48 billion. It follows, therefore, that the taxpayer is in profit to the tune of £8 billion. Mr Johnson's assessment of the cost of the bail out is thus fantasy.
He then goes on to confuse the deficit (the annual amount by which the government's expenditure exceeds its income ) with the public debt ( the total amount of government indebtedness). Again the OBR tell us that the deficit for this year is projected at £91 billion, down from £170 billion in 2009/10. Total debt is estimated at £1489 billion. This can be expressed at £ 1.489 trillion so Mr Johnson manages to get reasonably close on this one.
The Greens say they offer an alternative. It looks like an alternative to accurate arithmetic.
Douglas Summers
Castle Street,
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