Britain’s national debt to cross £2 trillion | business | Hindustan Times
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Britain’s national debt to cross £2 trillion

business Updated: Feb 21, 2009 10:06 IST
Vijay Dutt
Vijay Dutt
Hindustan Times
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The national debt of Britain could pass £2 trillion or £33,000 per capita, according to the independent Office of National Statistics (ONS).

The national debt figure took a quantum leap when the ONS decided to add the debts of Lloyds and RBS, estimated at between £1 trillion and £1.5 trillion, to the public balance sheet.

ONS confirmed that it considered both Lloyds Banking Group and Royal Bank of Scotland to be public sector companies.

At £2.2 trillion, the national debt would be about 150 per cent of the gross domestic product — the worst debt total since the 1950s, when Britain was paying back its war debts.

Taxpayers are jittery as well as angry with the Labour Party’s economic management. However, the Government says that the eventual cost to the taxpayer – even in the case of a further severe financial slide – would be only a fraction of this total. Goldman Sachs, according to the Telegraph, has estimated that the taxpayer would have to foot about £120 billion on account of the banks’ bailout.

Noted economist Megnad Desai told Hindustan Times that the impact of the figure was more psychological than causing long-term danger to the economy.

He however agreed that its immediate effect could be to make recession “slightly deeper.”

“But the Government would be making a mistake if it does not nationalise these banks quickly to be able to turn them around,” he warned. “It took six months to nationalise Northern Rock, which added to the losses."