Tuesday, March 23, 2010

U.K. Government Spending Rise Above 50% Of GDP

For the first time ever, at least during the absence of a major war, U.K. government spending rose above 50% of GDP in 2009. During the reign of so-called "New Labour" since 1997, government spending is up from 40% of GDP to 52% in 2009, and a projected 53% in 2010. This means that the ratio has on average risen by one percentage point per year during "New Labour". The increase has been fastest during the last two years, but it has risen ever since 2001.

The increase has in part been financed by tax increases, but mostly through a soaring budget deficit.

Though most other countries have seen their burden of government increase during the recent slump (Israel is one of very fex exceptions), the U.K. has seen a bigger increase than elsewhere, and unlike most others (the U.S. being and additional example) the burden of government spending was rising even during the boom.

As a result, government spending is now higher than in Germany and most other continental European countries, after previously having been much lower.

While I can't say I trust David Cameron, these numbers provides a very strong case for voting Gordon Brown out of office during the election that will come later this year.