Monday, December 28, 2009

UK Spends 58% Of GDP in 2009. Well Done Darling!


How big are British Government spending and borrowing? The Government claimed in the Pre-Budget Report in November that its borrowing was GBP 178 billion, which was a forecast figure made six months previously, adjusted by GBP 3 billion. Despite falling revenues, which make this figure impossible, the Government clung to it like a drowning sailor holding onto flotsam.

The revenue figures were released a month later in December, which enabled Darling to play the fiction that he didn't know that revenues were tumbling, when he announced the PBR in November.

My figures, after reading various reputable sources, are that government borrowing is not the GBP 178 billion that Darling claimed in November, but at least GBP 232.

The size of the UK economy's GDP is GBP 1.26 trillion. Government borrowing in Britain at the end of 2009 is not the 12% of GDP claimed by Darling in November, which was whitewash, but is at least 18% of GDP.
As borrowing is rising, so is the size of the economy shrinking.

Borrowing might in reality be higher than that, depending on spending levels not yet reported for November/December. They can hardly have gone down.


Government revenues (income) I found in an accountant's web page (BDO) given at GBP 496 billion for 2009, down from GBP 606 billion in 2008. This Press release states that government revenues declared by the Treasury five weeks after the PBR were GBP 50 billion below projections given in the PBR five weeks earlier. See statistics here. That means that borrowing is at least GBP 50 billion higher than the figure given in the PBR.

(I was initially confused by this sentence in the undated BDO Press Release -

The dramatic deterioration of the public finances was laid bare by Treasury figures showing that the total Government tax receipts in 2008/09 were over 9 per cent below the Chancellor's forecast made only five months (sic) ago in the November 2009 Pre-Budget Report. The outturn of £496 billion for 2008/09 fell £50 billion below target - a shortfall exceeding the combined government spending on transport, housing and the environment.

They must mean five weeks ago, not five months ago. The 2008/09 dates must mean as from 2008 PBR up to 2009 PBR.)

UPDATE - 2nd January 2010

My assumption about the error made by BDO is wrong. The error is that the Press release should have said the PBR in question was November 2008, not 2009. It seems pretty obvious in retrospect! So most of my thoughts in this piece are also in error. However further reading of the Treasury reports and realising the correct nature of the BDO error have thrown up the fact that the government's income is falling by even more than the 2008/2009 financial year figures show.

I'll leave this piece as it is, as it shows how my thinking has progressed step by step, and includes the errors I have made to date. That would assist anyone seriously trying to track the figures back to sources. Otherwise my apologies for not realising earlier the nature of the BDO error, and for misinterpreting it.


These revenue figures need comparing to expenditure, the difference being the current year's borrowing requirement.

What is the correct expenditure figure?

That information is cloaked in a sea of barely comprehensible terms, and needs quite a little teasing out from the HM Treasury report, which gave the position at the time of the PBR.

On this HM Treasury site which claims to tell you what the expenditure figure is, and how the numbers are to be interpreted, they have not one but three separate numbers to report, and the relationship between the figures is not immediately clear.

The first is TME which stands for Total Main Expenditure. This figure is the sum of AME, which is the Aggregate of departmental Main Expenditure, and DEL which is not explained in words, for some daft reason, and which seems to be partly related to Capital Expenditure. DEL splits into two figures, Resource and Capital.

Taking the figures given for each of the two categories of expenditure, AME and DEL, and adding them together, presumably provides the total TME. That would be the first hypothesis to test, at least, to see how the figures look, when related together in this way.

The sum is as follows.


Resource - 321 billion
Capital - 48 billion
Combined - 369 billion

Add Departmental AME - 359 billion

TOTAL - 728 billion

The Grand Total for 2009/2009 UK Government Expenditure, TME (The Total Main Expenditure Figure) calculates out at GBP 728 billion (369 + 359), it appears.

The odd thing is that the TME figure in the report's summary is given otherwise, not at GBP 728 billion, but at GBP 628 billion, exactly GBP 100 billion lower.

Is that a slip of the pen, or a little bit of obfuscation? It's the biggest slip I've ever come across, if it is, the mere matter of GBP 100 billion. If you are going to put a 'mistake' into a set of accounts, you should always make it a big one, we are always told by government spinners.

If the GBP 728 billion figure is right, and it checks out to the totals given in the PBR according to BDO, Britain's government is spending no less than 58% of the country's GDP in 2009. The highest figure I had ever heard previously was that it was approaching 50%.

What is going on? Even with all 'capital' spending, viz. GBP 48 billion removed from the sum, which would be spurious, government spending is still 54.4% of GDP. Where is that information being mentioned and discussed? Nowhere.

Moving on,

The Revenues from Taxation figure (GBP 496 billion) should be deducted from the TME to give the current year's borrowing requirement.

The Revenues we know to be - 496 billion from BDO.

The borrowing requirement is therefore GBP 232 billion (728-496), which is, with the size of the UK economy at GBP 1.26 trillion, spot on 18% of GDP, which is considerably bigger than the government's claimed level in November of near 12%.

For the latest GDP figures see HERE. Quarterly GDP is given as GBP 315 billion. To get the annual figure, I multiplied this by 4.

SEE ALSO - Marketwatch from August 2009,HERE, which explains that the GBP 178 billion current year borrowing figure is a Government forecast, which was obviously too optimistic even in August, let alone by the time of the PBR in November 2009, when Darling repeated the GBP 178 billion figure.

Extract (August 2009) - As British politicians debate how to cut future spending to bring the nation's public finances into line, data released Friday showed borrowing by Britain's public sector soared in August as tax receipts plummeted in response to the economic downturn.

Net borrowing by the British public sector rose to 16.1 billion pounds ($26.6 billion) in August, up from 9.9 billion pounds in the same month last year, the Office for National Statistics said.

Economists said the rise was less than anticipated by the market but still pointed to a worse outcome than currently forecast by Britain's Labour government. The Treasury has forecast a total borrowing requirement of more than 175 billion pounds for the current financial year, exceeding 12% of gross domestic product.

It seems that the true current borrowing and spending figures are being kept well out of sight as politically inconvenient by Brown. How long can he keep the truth from spilling out? That is the question.

UPDATE - The BBC is continuing with the GBP 178 billion figure into the New Year, claiming Britain's borrowing % of GDP is similar to other countries (in capital terms it is for now, the gross total but this year's figure is the fastest deterioration of any other country in the world), and that this target will be hit! Even when most other publications have adjusted the figure higher - such as The Economist - and when November has just reported in with a GBP 20 billion deficit (2008 November GBP 15 billion deficit).

See the slavish BBC reporting HERE . The words are carefully chosen, but they are basically whitewash.

The BDO report, higher up, states that government borrowing was targeted for 2009 based on a 10% fall in revenue from GBP 606 billion in 2008 to GBP 550 billion in 2009. What the BBC and the government are not mentioning is that revenues have fallen nearer 20% to GBP 496 billion, up to the end of October. They avoid mentioning the totals, and just keep repeating the target, claiming it will be met.

The only way Brown will hit the borrowing target that's been set is if there is a massive turnaround with revenues surging (the opposite of what is happening). And yet Brown is announcing the end of the recession and convincing himself like an addicted gambler that the dice will roll his way, in time for the election.

How soon will Brown be engulfed by his deceptions, as his debts overwhelm the creditworthiness of the country? If revenues fall to GBP 450 billion, and spending is needed at GBP 750 billion plus next year, and the GDP continues to fall, the government's borrowing in 2010 could be over 25% of GDP.

You might say that at last Britain under Brown truly leads the government spending and state debt. As no MSM carries any figures such as the ones I have found by a little digging around, no one in the world seems to realise what an incredible mess Britain is in.

And just one more thing, Darling knew the figures he was giving to Parliament in the PBR were fictitious. Look at his face heavy with regret. And look at Brown's face, pleased as punch to be lying to Parliament and the British people as he has been doing all along. Surely it is time that these people were voted out of power.


For the rest of this blog post which is a long one, I examine if there are any other reasons why Brown is driving Britain into far higher levels of debt. What are the international perspectives? Who are the lenders? What is their view on all of this?

Alternatively this is not a situation where Darling and Brown are pulling the strings, but one in which they are reacting as instructed. In this video, a US journalist explains how the process of taking the regulatory powers over government finances into international bodies is the plan. But before they can justify removing power from national governments they first need to create a financial crisis. Brown's confident smile tells us that his controllers are happy with things as they are, with Britain, once one of the world's strongest economies, being reduced by massive debt into a basket case.

Brown clearly expects to pick up a nice job as part of the new world economic/government structure.

This is Part 3 of this presentation. It would make more sense to start at the beginning, but this is into the meet of the show. It takes anyone quite a while to take in and understand what is happening in the financial regulatory world. The key fact that is missing from most our world maps is that the international financial superstructure has become so wealthy and powerful, that it now controls the governments, not only of third world countries as they did in the 1960s and 1970s, initially as a way to compete with Soviet influence, but now also their puppets include people like Blair and Gordon Brown, and even Barack Obama.

To understand the untold story of our world, and how these institutions have become so powerful will take all of us a long time to take in. I would recommend reading a few books, and watching videos such as the above. It all helps.

As for Cameron and Osborne, I don't know. Someone has got to level with people as to the situation we are really in first. Blair is a goner with his hands on piles of loot. Brown yearns for a top job in the one world government hierarchy. Maybe Cameron will try to tell this story. I hope he does. It is time that the people of Britain were told what is really going on.

Here is the first video in Joan Veon's 'When Central Banks Rule The World'. I recommend taking an hour to watch these and trying to take in as much as you can. It helps to start the process of understanding.

You might find some answers to puzzles such as why did Brown and others sell off their national gold reserves, and why he has spent billions on nothing much, to ensure Britain went from a strong financial nation, to become a heavily indebted, less competitive nation.

It explains why national regulatory barriers to excessive speculation have been dismantled, making an international regulator necessary.

It shows how military intelligence has been centralised since 2001, and Iraq, for example could be seen as an action not of the US and Britain, as much as an action of a world government, manipulating the nations to its will.

If there have been bigger and bigger question marks in your mind over the last few year's events, maybe here is a start of how to develop a framework of understanding. The world government programme is a secret programme, and so many will think you and me crazy for talking about it. But the power of the world's banks is unstoppable, and you need to understand it if you want to understand the world.

The Bank Of International Settlements is the coming Global Central Bank, to which will be attached a Global Government.

Coming back to where this post started, just take the recent PBR in which the British Government gave out figures of its debts which it knew were incorrect to the tune of at least GBP 50 billion. And yet no one has said a word about it in any news medium.

Something is going on.

It doesn't make sense.

It is time to look for other explanations.

Maybe journalist Joan Veon offers some of the picture.

RECOMMENDED READING - to understand how the World Bank got in the habit of controlling countries, read Confessions Of An Economic Hit Man, by John Perkins, published by Plume, 2004. Throughout his working life, he thought he was building an American Empire to counter the Soviets, and never realised he was acting an an agent of a new World Government, and financial organisations that were becoming increasingly independent of the USA Republic, and able to manipulate their parent powers.

The aim of Perkins' work was to get the countries being invested in to get into such massive debt they could not possibly repay it. They did this by corrupting the country's leaders, and they cooperated. The same tactics seem to be being used on the world's larger countries now to acquire their cooperation with the New World Order, if they don't come quietly that is.

The financial crisis that started with sub-prime is fast becoming a major political crisis. This is becoming a story not simply of incompetence, but of a deliberate programme of financial elimination and control of once free countries. And so far it is happening in secret with the MSM part of the game. Viewing the goings-on in Britain through an understanding of the broader world perspective makes understanding of these events easier, while they are thereby, even more distressing to observe.

People could start off by observing Gordon Brown's financial declarations a lot more closely and seeing that they are fundamentally dishonest. From there, the rest of the picture slides into place. An earthquake is taking place, unreported and by the vast majority of people, unobserved. The forces of freedom are awakening but they need to awaken a lot more quickly, if Britain is not be captured in a prison of vast and unnecessary debts.


ukwebspiderdotcom said...

well researched. Do you read any of Nadeem Walayat's analysis over at Market Oracle? you should if you havn't already. I'd be interested to see how your figures compare with his

tapestry said...

No. I'll take a look. Thanks Webspider.

tapestry said...

Walayat writes -

The current financial year's deficit is projected to be £185 billion or 15% of GDP, this needs to be cut to below 5% of GDP or £60 billion, within a short period of time but WITHOUT triggering a Double Dip Recession, which would just bring Britain back to square one i.e. were we were 6 months ago.

In other words he believes the figures given in the PBR which clearly I don't. 2009 Debt is 18% of GDP. The cuts required by Walayat are not 120 billion but 170 billion per annum, to bring spending down to his suggested 5% of GDP.

His longer term projections are interesting, but he, like most commentators hasn't picked up on the deceptions being practised by Brown to hide the true level of his current borrowing.

The banking crisis is not played out yet. Government revenues are still falling. Britain might be targeting 25-30% of GDP for 2010, way more than Walayat is projecting.

The idea of the World's Central Banks is to get countries so heavily into debt that they become financially dependent and thereby politically dependent.

Britain has a strong independent streak. That's why we are being targeted for financial collapse, to eliminate all rebelliousness through debt. They used to use these techniques on third world countries. Now anyone who resists One World Government will be taken out by such methods.

This is not only a financial crisis but also a political crisis.