FAQs

What is the national debt?

The national debt is the total amount that the public sector owes, including central government, local government and public corporations. It is mainly made up of past borrowing to pay for deficits (see below). The specific measure of the national debt is public sector net debt, excluding public sector banks and the Bank of England. This is the definition used in the government's fiscal target, which is for debt to be falling as a percentage of GDP in the fifth year of official forecasts.

What is the deficit?

When government spending is higher than what it receives in taxes and other revenue, it borrows to cover the difference. The gap between spending and receipts is known as the 'budget deficit' or 'public sector net borrowing'. The deficit is incurred every year that spending exceeds revenue, and adds to the total amount of debt the government owes. For example, if the government has a debt of £2.5 trillion at the start of the year and incurs a deficit of £100 billion within the year, debt will increase to £2.6 trillion at the end of the year.

How is the current debt calculated?

Public sector net debt figures are updated monthly by the Office for National Statistics (ONS). This provides the baseline for the debt in any given month. The rate of increase is calculated separately using the Office for Budget Responsibility's (OBR) forecasted annual increase in debt from the end of the previous financial year to the end of the present financial year. These figures are also updated monthly.

Don't all countries have debt?

Many governments across the world borrow money and debt isn't inherently wrong. The problem is when governments have too much debt. The UK's public sector debt is at an alarmingly high level and long-term projections show it getting worse. Money spent on debt interest payments cannot be spent on public services and must be taxed, after all.

Why a debt clock?

The national debt can be difficult to comprehend. But by representing it as a clock, ticking up ever higher by over £4,000 per second, it's possible to get an idea of just how serious the situation is.

Why does the debt go up and down?

The economy is cyclical and goes through periods of growth and periods of recession. When the economy is growing, tax receipts are buoyant and spending on automatically counter-cyclical items like unemployment benefits are reduced. So while debt in cash terms rarely goes down, if it is stable and the economy is growing then it becomes a lot more manageable and can be said to be falling as a share of GDP. When a government is running a deficit, the debt will grow. The last time the UK public sector ran a surplus was 2000-01.

What can I do about it?

Share this tool with your friends, family and colleagues. The more people know about the scale of the problem, the more politicians will have to take note. That means sending to WhatsApp groups, posting on social media accounts, showing people at the pub. Alternatively, email your MP directly to ask them to take the issue seriously. And of course sign up to our mailing list at taxpayersalliance.com/join