UKIP Savings and the UK Debt
Leave the EU
Direct Cost
Cost of EU membership, we pay = £55 million per day, or £20 billion per year
All Grants, Subsides, etc.from EU = £22 million per day, or £8 billion per year
So SAVINGS = £33 million per day, or £12 billion per year
Indirect Cost
Regulation = £264 million per day, or £96.4 billion per year
CAP & Protectionism = £143 million per day, or £52.2 billion per year
Lost Jobs to foreigners = £16.5 million per day, or £6 billion per year
CFP/CAP/Water Stnd/Stdn.Loan = £16.5 million per day, or £6 billion per year
Benefit/Health tourism = £11 million per day, or £4 billion per year
Total Indirect cost of EU = £451 million per day, or £164.6 billion per year
So SAVINGS = £451 million per day, or £164.6 billion per year
Cut Foreign Aid
Cost of Foreign Aid = £30 million per day, or £11 billion per year
Spent on real humanitarian aid = £4.3 million per day, or £1.6 billion per year
So SAVINGS = £25.7 million per day, or £9.4 billion per year
Total savings from Leaving EU and Foreign Aid is £198 billion per year
and over lifetime of Parliament (5yr) is £990 billion
So if all of the UKIP savings were used to reduce the countries debt, that is expected to peak at about £1,600bn then it would reduce it to 600bn. And then in the next 5 year parliament it would produce a surplus of £390,bn. This is an overly simplistic view but does put the savings proposed by UKIP into perspective. All the other political parties are only hoping to stop increasing the total debt by the end of the next parliament, and after that to reduce it by perhaps a few billion each year (it's about £1,500 billion altogether). So it will take them centuries to pay back the debt. Not just a burden on your children but your grand-children and great grand-children too.
Note: £1,000,000 = £1 million= £1m £1,000,000,000 = £1000m = £1 billion = £1bnDebt
Debt simply refers to the amount of money owed by the UK government. This is the debt that has been built up over many years by many governments - i.e.the running total.
Deficit
The current budget deficit, or surplus, is the difference between the government's everyday expenses and its revenues; in other words, between what it spends and what it receives. In recent years, it has spent a lot more than it receives, so we are used to hearing about a budget deficit.
Both the government and opposition are pledging to return the current budget to surplus in the next Parliament.
And there is a direct link between the current budget and debt. If the government runs a deficit, it is effectively overspending and, therefore, in most cases adding to the overall pile of debt. By running a surplus, the government can chip away at this pile.
Structural deficit
Some politicians, particularly from the Conservative Party, talk not just of deficits, but of structural deficits.
The structural deficit is basically the current budget deficit, adjusted to strip out the cyclical nature of the economy. You would expect, for example, the budget deficit to narrow when the economy grows after a sluggish period. The structural deficit attempts to exclude the effect of this recovery.
In other words, the structural deficit is the bit of the deficit that remains even when the economy is operating at full tilt. Or put another way, it's the underlying deficit that is not directly affected by economic performance.
Borrowing
Borrowing is... well, borrowing. Strictly speaking, borrowing and deficit (current budget) are not the same thing.
The two are linked, of course, as one covers the other, but the government doesn't just borrow money to pay back the deficit. It also borrows to invest.
The current budget covers everyday expenses - welfare payments, departmental costs etc. But the government also makes big investments, such as infrastructure projects, that are not included.
If the government is running a deficit, it may make investments on top of this, and will therefore need to borrow to cover both.
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