State set to spend 50% of UK GDP
GOVERNMENT spending is set to account for half of Britain’s GDP by next year, up from 41.1 per cent last year.
While the South East has relatively low public spending, forecast to rise from 32.4 per cent of regional GDP in 2007-08 to 40 per cent next year, Northern Ireland and Wales’ state spending is expected to jump from 59.4 per cent and 57.5 per cent of GDP respectively to more than 69 per cent.
To put those figures into context, government spending as a share of GDP in Cuba – a communist country – is set to fall to 60 per cent next year.
The startling figures come from analysis of HM Treasury spending plans by the Centre for Economics and Business Research. In evidence submitted to the House of Lords, the consultancy calls for high-spending parts of the UK to reduce their levels of public spending as a share of GDP by around five per cent, to offset the amount they are being subsidised by lower spending parts of the country.
“Parts of the United Kingdom have become so dependent on the state that it is crowding out private enterprise making a private sector-led recovery even more difficult to achieve,” says the report.
The report follows a warning that Britain’s national debt will quadruple from its current level of just over 50 per cent over the next four decades.