Osborne: Brown is increasingly becoming a stranger from the truth

Prime Minister Gordon Brown claimed on the Andrew Marr programme yesterday morning that the national debt is now lower than the level he inherited.

But shadow chancellor George Osborne has hit back, claiming that based on the PM’s own official figures, net debt is higher than on the day he became Chancellor.

Osborne says: “Gordon Brown’s interview shows he is increasingly becoming a stranger from the political and economic truth.

“The Prime Minister is increasingly living in a fantasy land, where his leadership is only under challenge because of the economic problems, where Britain is well prepared for a downturn, and where he bears no responsibility for the debt boom that he allowed to develop in his ten years as Chancellor.

“No one remembers Gordon Brown complaining about City bonuses or short selling when he was living off the proceeds of the Brown bubble.

“Back in the real world, borrowing is up, unemployment is rising, and Britain is ill prepared because Gordon Brown set nothing aside for a rainy day.”

On the BBC programme Brown claimed: “We’ve reduced the share of the national debt. We’ve reduced it from, I think, 44 per cent to 37 per cent.”

But official figures from the Office of National Statistics shows net debt is 43.3% of GDP compared to 43.2% in May 1997.

Brown also claimed: “We are in a position to borrow, because of our good housekeeping, to take us through difficult times. Now other countries are not in such a privileged position.”

Yet on September 19 respected financial magazine The Economist says Britain entered the downturn with the worst budget deficit in the industrial world, apart from Pakistan, Hungary, and Egypt (The Economist, 19 September 2008).

And according to the Institute of Fiscal Studies and its Green Budget paper 2008, most other countries are in a much more privileged position: “Out of the other 21 OECD countries for which we have comparable data on a wide range of indicators, 16 reduced their debt and 19 improved their structural budget balances by more than the UK between 1996 and 2007.”