UK deficit bigger than Greece? Not yet it's not
The claim
“Here we sit today with a budget deficit bigger than Greece.”
David Cameron, Conservative leader, BBC Today programme, 9 April 2010
Cathy Newman checks it out
It was David Cameron’s turn in the Today programme hot seat this morning. And it wasn’t long before he was goaded by presenter Evan Davis that his plans to slash the deficit were reminiscent of the last election.
Not a bad call, the Tory leader retorted, as we have a “budget deficit bigger than Greece”. It was enough to make every hard working family choke on their collective cornflakes. But was it true? Over to the team.
The analysis
The Conservative party pointed FactCheck in the direction of a document produced at the end of last year by the OECD.
Those figures say Greece’s deficit for 2009 stood at 12.7 per cent of GDP, a number also quoted by the European Commission.
The OECD put the UK deficit at a 12.6 per cent of GDP – not bigger as Cameron alleged, but strikingly similar. It mirrors the figure the government set out in the pre-budget report in November last year.
But the Treasury revised this number for the UK deficit down in the budget last month, placing it at 11.8 per cent of GDP for 2009/10. That suggests there’s a more comfortable leeway between us and Greece.
To be fair to Mr Cameron, Oxford Economics believes it is “plausible” that the UK deficit may overtake Greece’s by the end of the year.
That’s because Greece has taken on drastic austerity measures in the last two months to drive down the deficit to 8.7 per cent of GDP in 2010, compared to the UK Treasury deficit target – outlined in the budget – of 11.1 per cent for 2010/11 and then 8.5 per cent the following year.
Cathy Newman’s verdict
The comparison to Greece is not wildly off the mark, but neither the statistics the Conservatives provided nor the current Treasury numbers put the Greek deficit above the UK’s.
He’d have been closer to the truth if he’d said our deficit was set to overtake Greece. Perhaps he was using poetic licence, but in doing so he confused voters, and strayed into the realms of fiction.
There are 14 comments on this post
I find this hard to believe, I want a properly calculated accounts which take into consideraton the off balance sheet liabilities the government are not willing to account for.
I believe the UK deficit has overtaken that of Greece.
If you want to do a fact check, do it properly quoting OECD figures is not fact checking, doing your own sums is.
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We are doomed either way!
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Surely DC is correct if he was referring to the size of the deficit in cash terms – 11.8% of the UK’s GDP is larger than 12.7% of Greece’s. This may not be the best way of comparing deficits but it is factually correct.
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David Cameron make false claims, well I never. I cant really take anything he says seriously considering ‘ Leave Northern Rock to the markets, the finanacial stimulas was wrong, and hug a hoody. He is a PR officer wanting to run the country, at least Brown has the nouse to actually do that
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Hi Cathy
Once again he has strayed but perhaps he is suffering from memory loss.
Remember May 19th 2008 when he stated with such conviction:
“The government ‘efficiency drive’ is one of the oldest tricks in the book. The trouble is, it’s nearly always just that – a trick. In fact it’s such a cliché, there was an episode of Yes Minister about it, called ‘The Economy Drive.’ ”
Has he also strayed into the realms of fiction regarding Mr Osborne’s efficiency drive. Ah but I forgot they are not tricks when practised by Boy George.
Best wishes
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Maybe he meant in actual, rather than relative terms? Our economy’s a lot bigger than Greece’s so whilst the deficit might be a smaller
proportion here, the actual amount of borrowing may well be larger.
Not a very conventional way to compare, and typically slippery for a politician, but not actually ‘wrong’?
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Of course it’s true we have a budget deficit bigger than Greece – much bigger. The entire Greek GDP is not much bigger than this year’s UK budget deficit.
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Perhaps the UK GDP is higher than the Greek GDP?
If so,then 12.6% (or a revised 11.8%) Budget Deficit of the UK economy IS larger than that of Greece in terms of the billions of pounds of money spent over and and above the UK GDP compared to that of Greek Euros spent beyond income.
Reading what Cameron actually said – did he mention percentages at all? In which case his comment, “Here we sit today with a budget deficit bigger than Greece.” may actually be correct if he was talking in terms of volume and the presumption that Cameron was talking in terms of percentages is the reader’s mistake?
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But he didn’t say it was a higher proportion, he said it was a bigger – whilst percentage wise it may be smaller, the absolute sum is clearly higher due to the fact we have a higher GDP
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David Cameron, Economical with the truth.
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The real comparison is not arguing whether Greece is bigger or smaller than the UK. What matters is that the UK is a growth economy: up last quarter and the current one. Neither Greece nor Germany nor France nor Japan is growing their national wealth as fast as we are. That’s what both the OECD and the NIESR say.
Why’s that? Because our Government wants to keep our country growing so that more jobs are kept. That means applying the lessons we learnt from the 1930s when the previous Big Contraction took place. And that is working well already.
Tories don’t geddit! They don’t understand that this is another Wall Street Crash we’ve been suffering from. Which means we need to keep money supply from shrinking and dragging businesses down too.
Poor old Greece. Locked in the 1930s because Euroland has prescribed itself the failed policies of the 1930s. The very policies that the Tories want to run again – if we let them. With all the mass unemployment and despair that’d bring to us.
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Some growth! 0.1% in Q4 2009 followed by an expected growth of 0.4% in Q1 2010 is hardly scintilating growth of GDP?
It does matter that the size of the UK Budget Deficit is larger than that of Greece as every percentage point of expenditure beyond income by the UK has to be met by the UK borrowing money which creates more debt.
The British electorate is more or less sleep walking towards as long as a decade of much higher taxes and reduced public services as a direct consequence of the Labour governments management of the UK economy over at least the past 5 years, as the government has sought to change the rules in the face of failing to meet its own fiscal and budgetary targets that have now been altogether abandoned in the wake of the bankruptcy of the financial sector.
Whether there is a hung Parliament, a Tory Parliament or, Heaven forbid, 5 more years of Labour, the British tax-payer is going to see their earned and unearned income reduced by having to pay far more tax and the public services, which are already indebted, will have less funding available. As a result the UK Public Sector will find itself very painfully squeezed, squashed and coshed and it will be the UK citizens who will suffer austerity despite the UK being a nation of growth – much of that growth dependent upon the well-being of the UK Financial Sector which was/is the largest contributing sector the UK GDP and to the national exchequer through corporate and indirect taxes.
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Got to say that I would never even think that DC was saying that the Greek deficit was bigger in percentage of GDP as most of us would have no idea of what the relative GDP’s are.
Think you got this one wrong Cathy as our deficit is considerable bigger than the Greek’s.
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