Friday, December 04, 2009

Metro Journalists Cannot Count

The front-page story on today's Metro contains some absolutely ridiculous numbers. They try to put the £850bn total of taxpayer support to the banks in terms of other spending, saying
The figure is more than the entire NHS budget, almost three times the annual defence budget and more than five times what Britain spends every year on transport.
This is complete nonsense. £850bn is not "almost three times" the defence budget, it's closer to thirty times it!

The 2009 budget is here, on the Treasury website. Chart 1.1 on page 12 (the 18th page of the PDF, just to be annoying) shows a total budget of £671bn (against total receipts of £496bn, but what's a £175bn overspend between friends?). £850bn is nearly twice the total receipts, and a quarter more than the budget.

Of the budget, defence gets £38bn, transport £23bn and the NHS £119bn. If "the figure" were £117bn or £131bn (other numbers mentioned in the article) then the comparisons might hold - we have already spent more than it costs to run the NHS for a year or the armed forces for more than three years. Including the guarantees/liabilities adds nearly 90% of GDP to the country's balance sheet - so much for the "golden rule" of debt not to exceed 40% of GDP!

As an aside, £850bn is around 20 months' defence spending for the entire planet put together.

- KoW

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