Bernard Ingham: Chancellor must get tough as debt grows every second

Sadly, he has since relapsed by claiming that ex-president Barack Obama tapped his phones.

Nor do I expect anything transformational today when Chancellor Philip Hammond presents his first Budget. This is not because he has made a career out of being dull, but because he is in a fix.

“In a fix?” I can hear you say incredulously. “Isn’t the UK economy growing faster than most? Isn’t employment at a record level and inflation still low? Hasn’t the Chancellor had such a January tax haul that it looks as if he might exceed his target for deficit reduction by about £10bn?

“And surely the Brexit vote so far seems to have helped rather than hindered the economy – just as we prospered when we quit the European Union’s predecessor of the single currency, the Exchange Rate Mechanism?”

All this is true, though Brexit is not risk-free.

Chancellor Hammond is in a fix because he has no money to throw around and the NHS, social care, education, the police, housing and transport infrastructure are crying out for more.

It is true that he has eased his position, mistakenly in my view, by reneging on the Tory promise to balance the books by 2020, though he was reported to be trying to prune departmental budgets by £3.5bn.

Sadly, spending on overseas aid did not seem to be a target even though the history of wasted money and the financing of despots is utterly 
depressing.

On the other hand, the Chancellor has committed the Government to supporting infrastructural and housing investment on the grounds that it is now cheap to borrow money. Indeed, it is. But we are up to our necks in debt and a prudent treasurer would surely clear some of it before he branched out on roads, railways and, God save us, that bottomless pit that is opening up called nuclear power development.

I doubt therefore whether I shall sleep easily tonight after Hammond’s handiwork even if he counsels caution and tinkers, for example, to make the business rate fairer. I am afraid that Prudence is not the girl of the century.

Since 2010 the Tories, though handicapped for five years in coalition with the Liberal Democrats, have commendably eliminated nearly two-thirds of the £153bn budget deficit unforgivably left by Gordon Brown. But it still leaves borrowing in the next financial year at £55-60bn at best if the Chancellor’s forecast deficit falls below £69.5bn.

Worse still, the Government has borrowed £777bn over the past seven years. Put another way, it has spent that mind-boggling amount more than it has raised in taxation. We are living on tick and, as credit card holders know, it comes at a price.

That price is roughly £63bn a year in interest payments. It is far more than 
our outlay on defence (£43bn) and represents more than half our outlay on welfare. It is also dead money, doing nothing for all kinds of services that are under pressure.

That is not all. Our national debt is now well over £1.8 trillion (one thousand billion) and is rising at the rate of £5,170 per second – repeat second. It represents a rising debt of £29,300 per citizen and £50,400 per taxpayer.

I am surprised Tory politicians do not draw attention to this when the idea of new taxes creates uproar. Nor do they point out that Margaret Thatcher and John Major (with Kenneth Clarke’s help) both bequeathed budget surpluses and that Theresa May now intends to do the same.

Altogether, I do not expect much from the Chancellor today, but my respect for him will soar if he gets tough about how we get out of this financial abyss. He must know that no amount of money he throws at the NHS, welfare, education and the police will do a blind bit of good unless their organisation, management and attitudes improve.

The message from the Chancellor should be that the Government can only do so much. The crucial effort must come from all of us – and especially those who pay themselves handsomely to mismanage public services and the blockheaded tycoons who simultaneously demand incentives and tax cuts.

Meanwhile, I pity my grandchildren and their children over the debt rising around them. It is almost endemic. Trump, for example, has a national 
debt nearly eight times ours. It does 
not look good.