Quote:
Originally Posted by OLD BOY
I know. But the deficit is nearly paid off, so we can use the money that was dedicated to that and still pay off the debt, with repayments getting lower as it comes down.
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We are reducing the deficit, which is good, but we still have a deficit (in March it was down to £40 billion from £47 billion the previous year). If we reduce our deficit by 7 billion a year, in 5 or so years we should be breaking even, and then we can start paying off the debt, which if we generously say we will pay off at £20 billion a year, it should take us 85 years (£10 billion a year makes it 170 years).
All the debt/deficit figures are here.
https://www.ons.gov.uk/economy/gover...aast/march2018
---------- Post added at 16:44 ---------- Previous post was at 16:37 ----------
Quote:
Originally Posted by Sephiroth
They’ll possibly pay down the debt by increasing VAT. That’s what Thatcher did.
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VAT receipts were £125 billion in 2017/18.
If VAT was raised by 5% (adding 25% more on), that would raise another £31 billion per year, taking around 50 years to reduce the debt.
Howe raised VAT to fund income tax cuts, not reduce debt - the basic rate was cut by 3p to 30p in the pound, while the highest rate came down from 83p to 60p. A few years later, the basic rate of tax had fallen to 25%, while the higher rate had been slashed to 40%.
VAT went from 8% to 15%.
U.K. Gross debt in 1979/80 was £107 billion - in 1992/93 it was £248 billion (as a % of GDP it went from 51% to 40%).