Even more austerity is needed in Britain
A further austerity programme half as large again as the current package of tax hikes and public-spending cuts will be required to prevent a Greek-style debt crisis from overtaking Britain in the coming years, according to the Office for Budget Responsibility (OBR), the independent body set up by the Government last year to oversee public finances.
Britain's ageing population - and especially the demands placed on the NHS - is the biggest driver of the coming crisis, the OBR says.
In its first report on the long-term (50 year) horizon for the national debt, the OBR says that Britain's public-sector net debt, more colloquially known as the national debt, stands at £906bn, which is some 60% of national income, or £35,000 per household. But the Government's total liabilities - including future commitments for pensions, health and social care, PFI projects, the nationalised banks and nuclear decommissioning - exceed £2trn, or about £80,000 per family.
On one of the OBR's more pessimistic projections, spending cuts and tax rises of about £50bn a year would be required to return the national debt to the levels prevailing before the financial crash in 2007-08.
That compares with the £116bn fiscal squeeze the Government is planning to implement by the end of this Parliament and suggests further pain to come.
If action is not taken, it says, the national debt is predicted to rise to an unsustainable 200% of GDP and the fear of this would be sufficient to provoke a sovereign debt crisis.