Gordon Brown last night made clear he would press ahead with his controversial plan for Britain to spend its way out of the looming recession despite a 60-year high in government borrowing.
Gordon Brown last night made clear he would press ahead with his controversial plan for Britain to spend its way out of the looming recession despite a 60-year high in government borrowing.
Official figures showed public sector net borrowing hit £37.6bn between April and September, the first half of the financial year. This was higher than the whole of the previous year and the largest six-monthly total ever recorded.
The sharp increase left Chancellor Alistair Darling's forecast of £43bn of borrowing this year in ruins and led to warnings that debt could balloon to £120bn or 7.8% of national output over the next three years - the same level racked up by the Tories in 1993-94.
One economist branded the figures "dreadful", noting how they covered a period before the banking crisis, while another warned the downturn was set to push UK borrowing to "alarmingly high levels".
In the Commons, David Cameron warned that the country was entering the global economic downturn with "the highest government deficit in the industrialised world".
In exchanges with the Prime Minister, the Conservative leader pointed to one economic forecast predicting that total debt this year could hit £64bn. "Isn't the £64bn question this: why, when business and families need more help, has he left the cupboard so bare?" he asked.
Mr Brown, pledged the UK Government's "central mission" was to do "whatever it takes" to help homeowners and businesses through the "difficult period ahead".
He insisted that, having reduced debt in previous years, the UK Government could now afford to borrow to finance a major programme of public works in a bid to stave off the worst effects of the downturn.
"It is because we cut the national debt over the last few years that we are able to do what is the right thing," said Mr Brown.
The PM told MPs that while the UK's debt was 37.6% of national wealth, America's was 46.3%, France's 55.5%, Germany's 56.1%, Japan's 94.3% and Italy's 101.3%.
However, if liabilities of the nationalised Northern Rock were included on the government books, then debt in the UK would be shown to have risen to 43.4%. This would break Mr Brown's fiscal rule of keeping borrowing under 40% of GDP.
Yet ministers insist fiscal policy allows for "exceptional" events like the temporary nationalisation of a bank to enable such borrowing to be kept off the balance sheet.
Last night, however, Tory MP Brooks Newmark produced research which showed that if all "real" debt - such as from nationalisations, the banking bailout, PFI projects, pension liabilities and Network Rail - were put on the books, then total debt would be £2.4 trillion.
In a separate development last night, an ICM poll showed the "Brown bounce" from the banking crisis appeared to have halted with the Conservatives still enjoying a 12-point lead.
The Tories were on 42%, unchanged from last month, Labour on 30%, also unchanged, and the Liberal Democrats were on 21%, up four.
This week a raft of official figures will be published that will give a snapshot of the UK's faltering economy. Today, the CBI will publish its quarterly data.
On Thursday, retail figures will be published, while on Friday the official growth figures will be announced.
