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Britain’s Trillion Pound Horror Story

November 11th, 2010 Posted in Uncategorized by

Britain’s Trillion Pound Horror Story airs tonight at 9pm on Channel 4.

The film explains the full extent of the financial mess this country is in – an estimated £4.8 trillion of national debt and counting. It argues that the recent spending review hasn’t gone far enough, and to put Britain back on track we need to radically rethink the role of the state, stop politicians spending money in our name and drastically lower taxes to make Britain’s economy boom again.

The programme includes interviews with academics, economic experts, entrepreneurs and four ex-Chancellors of the Exchequer.

With its prescient message and offer of a bold solution to get the nation’s finances back on track, we trust you will find it stimulating and informative viewing.

Read more about the size of the debt in A Bankruptcy Foretold 2010: Post-Financial-Crisis Update.

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34 Responses to “Britain’s Trillion Pound Horror Story”

  1. Joe Otten Says:

    I’ll be watching. I was pleased to see Durkin had been given this week’s docublurb instead of last week’s “What the Green movement got wrong” which was very good as a result.


  2. Barry Stocker Says:

    Looks great, I hope it goes up on YouTube, because I won’t be able to watch it ‘live’ or on the C4 media player from Istanbul.


  3. Keith Grimley Says:

    “Britain’s Trillion Pound Horror Story” is the most direct, frank and downright refreshing account of ‘the state we’re in’ that I have seen – simply brilliant; terrifying and inspiring all at once.

    Let’s go forth and conquer. The crisis we find ourselves in might yet turn out to be a once in a generation opportunity to reinvent ourselves.

    Thank you!


  4. Jamie B Says:

    An interesting programme if a little narrow-minded. There was no real exploration of how jobs would actually be created in order to create the conditions to reduce the public sector and state. If there were a strict protectionist agenda to protect British industries coupled with a ban on private companies becoming too large or from making excessive profits and thereby energising small and medium companies/industries which employ a higher ratio of people then I would be all for it. After all, lest we forget it was the enormous size of the banks that meant they were not allowed to fail and caused a large increase in the UK debt.

    Unfortunately capitalism doesn’t work like this – it is dependent on being as ‘efficient’ as possible (not compatible with creating jobs), as cheap as possible (thereby being global and not protectionist) and to make as much profit for its shareholders as possible. I feel that ‘Small is Beautiful’ in the private sector really is the way to create jobs, reduce the public sector and state, and start reducing the massive UK debt mountain. Unfortunately the programme didn’t look at these aspects. Nonetheless it was a programme worth watching (even though I was have a one-way argument with the presenter on several occasions!).

    I missed the firs t10 minutes so I would be interested to know whether they explained where the £48 trillion figure actually comes from. Did they explain this? Does anyone know?

    PS: It is also interesting to note that the country that regularly appear at the top of the Human Development Index table – Norway – also has one of the highest rates of personal and corporation tax in Europe.


  5. Pat Noble Says:

    Don’t know if it was in the first 10 minutes but the cost of bailing out banks was a mere £90 million, which the government will possibly make a profit on.

    The deficit From from wild overspending by chancellors, especially G Brown, with money the government does not have


  6. Jamie B Says:

    Pat – I think it may be a bit more than that! Reports suggest it was more like £850 billion

    http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6722123/Bailing-out-the-banks-cost-5500-per-family.html

    http://www.independent.co.uk/news/uk/politics/163850bn-official-cost-of-the-bank-bailout-1833830.html

    I wouldn’t call £850 bn a mere sum. But I agree with you that successive Governments have widly overspent moeny they didn’t have


  7. Robert Says:

    So … who’s telling the truth?
    At the end of March 2010 general government debt was £1000.4 billion, equivalent to 71.3 per cent of GDP. http://www.statistics.gov.uk/cci/nugget.asp?id=277


  8. DavidNcl Says:

    It’s much worse than that.

    “At the end of 2009-10 the real national debt stood at £7.9 trillion, over £300,000 for every single household in Britain …

    Official national debt (quoted by the Chancellor in his budget) hugely underestimates taxpayer liabilities

    •The official public sector debt quoted in the budget – £890 billion (£0.89 trillion)
    •Unfunded public sector pensions – estimated at £1,283 billion (£1.28 trillion)
    •Unfunded state pensions – estimated at £2,717 billion (£2.7 trillion)
    •RBS/Lloyds debt – £2,585 billion (£2.6 trillion)
    •Other – including the Local Government Pension deficit, PFI, and nuclear decommissioning – £398 billion (£0.4 trillion)

    At March 2010, we calculate the total debt stood at £7,873 billion (£7.9 trillion)”

    Taxpayer alliance


  9. Dan Says:

    I run an SME business in the UK.

    Myself and my business partner have to pay the following in taxes:
    *Approx £30k per 1/4 in VAT
    *£145k coropration tax (per year)
    *£45k personal income tax (each)
    *12% employers contributions on every salary we pay to our staff.

    Total Tax per annum approx: £370k
    Our company turns over around £1 million.

    Why do we have to pay 37% of all our income to the governmernt – what right have they got over the money we are making? We came up with a good business venture which is profitiable, and we are being punished for doing so – we see no reason to exapnd the business further as the taxation gets progressively worse. This is an incredibly sad FACT.

    What we need is lower taxes so that companies in other countries see the benefit in moving their operations to the UK. That would have a number of effects:
    1. More businesses moving to the uk so more private sector workers.
    2. Less tax to pay, so more money in your pocket to spend – which will boost retail, construction etc etc.
    3. As there are more businesses entering the UK for better tax than other countries, there would be more tax being received by the inland revenue.

    It may take a year or two for things to straighten out, but this would go someway to helping us get out of this ridiculous situation.


  10. Terry Dactyl Says:


  11. Bob the Scaff Says:

    Get rid of the overwhelming bureaucratic Governments,change the tax to a flat rate let and the people decided their own futures. Scrap the NHS for an Insurance based health system. Get rid of the current wealthfare system to a points based system, the more points you earn the more money you get. Points being earned by Working for the elderly and local based clean up projects.

    If we keep the present systems we are all going to suffer for generations to come :-(.


  12. PaulUK Says:

    This programme was by the same guy who did The Great Global Warming Swindle, which argued that the whole of climate science is a huge scam! Scientist Dr Carl Wunsch said that film was “masquerading as a science documentary when it should be regarded as a political polemic” and was “as close to pure propaganda as anything since world war two”. Ofcom upheld complaints against that one.

    Contributors to last night’s film included Philip Booth and James Bartholomew, both of the Institute of Economic Affairs (a free market think tank), Eamonn Butler of the Adam Smith Institute (a free market think tank), some guy from the Taxpayer’s Alliance (a free market think tank) and some guy from Goldman Sachs (the bank which schooled the Greeks on how to keep their debts off balance sheet!). Impartial and fair? Erm, no.

    Little or no mention of the fact that much of our debt is due to a string of bank bail-outs after the financial crisis (that’s taxpayers being held to ransom by a failing *private* sector!) and much of the rest comes from the collapse in revenue which occurs during any recession.

    Durkin prescribes deregulation as a cure-all for our economic ills, but doesn’t mention that most experts believe that light-touch regulation was partly what got us into this mess! No airing given to the views of award-festooned economists like Paul Krugman, who have argued that austerity measures may be self-defeating (i.e. the government WILL NOT save by slashing spending) and may even bring on a third Depression.

    Did Labour spend too much? Undoubtedly. But this shrill anti-State polemic does nothing to advance the debate on what to do about it.


  13. libertarian Says:

    @Jamie B

    No the £850 billion figure was what the Brown government spent on everything including printing money via QE

    The UK banks cost the taxpayer in total £20 billion, this was in the form of buying part of the equity, bail outs/provision for toxic assets and depositor guarantees.
    As well as legal, accounting, consulting and banking fees.

    I am a great believer in small is beautiful but have no problem what so ever with large companies existing ( I think a lot of them are rubbish, like BT, but so what)

    I’m an entrepreneur, small business owner, business angel/dragon and also represent my local SME community.

    Between 2000 and 2007 SME’s created 87% of all new jobs. If our payroll taxes and business rates were reduced then business expansion would take off. If the huge weight of regulations, especially the EU stuff on working time, agency worker and 20 weeks fully paid maternity leave were removed for smaller businesses ( or in fact scrapped for all) and if there was some fairness in the tribunal process then job creation would explode. If we removed the insane IR35 regulation and encourage new micro and home based businesses we would create hundreds of thousands of new businesses.

    Whilst I agree that capitalism is about efficiency and creating value for money it is also about creating work. I had a great discussion yesterday and have agreed in principle to part fund a pure research establishment. We will pay people to come and play with technology and ideas and see what happens. We have no income, no product brief and no constraints. True we may one day make a load of money, or not. This is part of the real capitalist world too.


  14. Aron Says:

    what happens if the state owned companies make a profit? does that not help the economy AND generate more money for the government? or have i got the wrong end of the stick>


  15. libertarian Says:

    @Dan

    I totally and utterly agree

    @PaulUK

    Sorry friend you are just plain wrong.

    There was no “light touch regulation” the banking regulations are very strict and onerous. Gordon Brown and the EU set ASIDE the regulations to allow RBS to purchase ABN AMRO. Lloyds Bank was a highly profitable organisation UNTIL G Brown persuaded them to purchase HBoS without due diligence.

    No expert reckons that light touch regulation was the problem, the ONLY people saying that are NON EXPERT EU politicians. You see Paul the problem was quite strait forward. In order to create a spending frenzy, the Labour government artificially held interest rates at an all time low and encourage banks to lend sub prime creating the biggest housing bubble in history, which burst as do all bubbles.

    The debt and the deficit that this country faces is as a result of profligate borrowing and spending despite increasing stealth taxes every year. Public sector borrowing does NOT create expansion, job creation, wealth creation or sound fiscal policy.

    We have had 13 years of doing it your way. Now is the time to stand aside and let the business community save you all from this socialist nightmare

    Paul Krugman is discredited and ALL of his early scare stories ALL proved to be 100% wrong. ( This is the man who predicted that the world would have collapsed by now due to the vast increase in the population to over 20 billion…oops wrong again) Award winning, the nobel prize, like those other world renowned expert laureates Gore and Obarma you mean..

    The guy is the Eric Von Daniken of economics. Scare story writer


  16. Ryan Says:

    This was one of the most ridiculous documentaries of recent times. Whilst I don’t agree with the film’s politics, mainly due to its view that the pursuit of wealth is the only worthwhile duty of the individual and society, the style was very tasteless and ridiculously one sided. Having MacKenzie as a political or economic expert was the final nail in the coffin, but the other low was the view that Britain should replicate Hong Kong, where equality is (even) worse.


  17. CmdrTobs Says:

    Hilarious, 71mins of puerile sketches of economic half-truths and bad examples that were riddled with caveats.

    The programme makers seem to think proof by repetition and vox pop is proof at all. The amount of times they cut rapidly to various shills repeating the same thing as if that proves it a little more was HILARIOUS.

    I particularly loved the bad explanation for inflation and the hocus-pocus explanation for de-industrialisation with the government ‘bogey man’

    This program made me laugh throughout. The only thing that worries me is I know this has ‘informed’ a load of now ‘know it all’ far right types. Who like to call paygo retirement schemes ‘debt’ or a ‘ponzi’

    P.S the ‘hongkong is awesome’ section cracked me up. Continently ignored the best waged and highest GINI countries that are our HIGHER taxed neighbours and that’s counted as a whole county rather than as a small rich city ‘del la Hongkong’


  18. Dom McArdle Says:

    Wholeheartedly agree with the last post. If you think this was informative you need to begin worrying about what else you believe on the basis of what you’ve been told. Chances are you’ve confused your emotions with your intelligence.


  19. Stevo Says:

    A convincing populist argument. Who isn’t going to vote for lower taxes? A benefit dependent population, except that many claimants don’t actually realise that it is our taxes paying for their beenefits! Turkeys and Christmas.
    But hey, where were all these right-wing economic experts in the middle of the decade? I don’t recall hearing any of them predicting the impending global economic collapse in 2001, 2002, . . . . 2007. Like the governors of the Bank of England and all these other useless and uninformed or negligent, this oxymoron of economists. Siberia would be too good for them. Send them all to Haiti where they could hardly make the situation worse.
    One thing they were right about is that no economy can survive on service only industries. We have to take something, add value and sell it on to make a profit.
    The promos and plugs for health don’t seem so convincing when viewed against the USofA experience where millions can afford no health care ~ and that in one of the richest countries on the planet.


  20. allan burns Says:

    the debt figure used includes all future pension liabilities. But these pension liabilities are not things the government is actually spending now. Therefore, there is no need to borrow for them yet. It is more of a guide to future public sector debt. I don’t accept the fact that future pension liabilities should be counted as public sector debt.

    The Deficit is now about 11%/12% of GDP. At the end of 2008 it was 3% (of which 2% was for investment spending). So the cause of the ballooning debt is the bank bailout, the collapse of tax revenue, and the continued government spending to prevent complete financial collapse (because all you entrepreneurs and consumers where refusing to invest and spend). Yes, Labour did spend more in the latter half of it’s term, but this was to correct many years of underspending by the previous government (do you remember crumbling schools and hospitals). Also, until the end of 2008, the conservatives pledged to match every £ of labour spend – so how can they say that spend prior to that was reckless ?


  21. lorraine wilson Says:

    I was seriously freaked by this programme and I think CH 4 should develop the arguments further with alternative but equally well illustrated points. Are we doomed??!!


  22. Psi Says:

    @PaulUK

    I can’t be bothered to read beyond the first sentence of your comment as I assume your arguments must be very limited, you felt the need to play the man rather than the ball.

    He could believe in worshiping a pink goldfish, but as long as his arguments are valid that is irrelevant.

    If you have to start by attacking his views on other topics I assume that you are too ignorant to understand the issue other people are discussing here.


  23. Angela Harbutt Says:

    Thank goodness we have at last seen a documentary that puts an alternative view to the leftist socialist tripe we so often hear on the BBC .. the idea that government spending will somehow solve this issue by taking more from the wealth generators is preposterous.

    We need imaginative radical thinking – some new ideas – not the continued conspiracy of silence.

    Full marks to Channel 4 for daring to challenge the statist view. If it gets the debate going then its done its job.


  24. Psi Says:

    It shows how behind the curve the BBC is they haven’t even started to look at the pro cuts side of the arguent.


  25. Mark Haines Says:

    I’m sure all of the people trying to discredit the program are probably on the government pay roll, just like over half the population. The problem with the public sector is they are over paid, unaccountable mostly boring idiots who have not got the nouse to work in the private sector and never will have because red tape keeps them in thier jobs. How many appauling teachers are there how many jobs worth’s are there, hundreds and thousands and until they can be truly judged on what they contribute sack the lot of them.

    REMEMBER ANYONE WHO WORKS IN THE PRIVATE SECTOR KNOWS YOU ARE ONLY AS GOOD AS THE NEXT JOB YOU DO, WHERE AS THOSE IN THE PUBLIC SECTOR CAN BE AS APPAULING AS SOME OF THEM ARE AND THE SAME JOB STILL AWAITS THE NEXT DAY. Wake up all of you go on the Tories break the unions once and for all and then privatise everything, that way we bring accountability to the table something no one in the public knows exits!!!!fo


  26. Bolebroke Says:

    What was the music that played as George Osborne waved his bag around…? Something along the lines of “I’ve got ninety thousand pounds in my trousre..!” Sounded very Flanders & Swann.


  27. Dan Says:

    The situation in Britain is simply impossible. Keep it simple, lower taxes, trim down the “chocolate teapot” public sector, and let the people work.
    Poverty is relative, for every family bemoaning the fact that they cant afford to take a winter skiing break there are a hundred families having to decide weather to feed their kids or pay the rent. How many more jobs are going to be lost when VAT hits 20%?
    If the British people are not given the opportunity to work for themselves and not for the tax man then whats the point of working. Its simple.


  28. David Says:

    Funniest programme on TV for ages. It was annoying me until I realised that it was a Spinal Tap style spoof documentary when the Newcastle segment stated the success of the British Empire in the 19th century was down to small goverment. More please.


  29. AP SME OWNER Says:

    For me, this at least was something to consider and contained some extremely valid points however I can’t help but think the people expressing negative comments are currently ‘working’ in the public sector!


  30. Lets talk about it Says:

    OK fella, I can’t help but think the people expressing positive comments are currently ‘working’ in the private sector! It’s obvious, private sector workers want a smaller state so they can pay less taxes and increase their personal wealth. Public sector workers don’t want to lose their jobs. And yes the programme was interesting on many levels, and certainly made me think, and undoubtedly a streamlining of the tax system has to be welcomed. But it was, without doubt, a very one-sided look, with no real heavyweight back-up, and was very flawed in some respects. I haven’t got all day to pick holes but lets start with the fact that the 4.9 trillion debt is probably more like 3 trillion (agreed, it’s still a lot of money, but if you were looking for facts in this documentary you will have been disappointed, they couldn’t even get the it’s name right!). And for the avoidance of any doubt; I work in the private sector, I think we pay too much tax through an overcomplicated system, I think the public sector is too big. But I do not think demonising the poor or public sector workers is constructive.


  31. gez winstanley Says:

    This documentary dogmatically peddled a number of dangerous and highly selective half-truths.

    Firstly, it failed to place the UK debt in its current historical context. Seen as a proportion of GDP current UK debt levels are far from being unprecedented (see http://econ.economicshelp.org/2010/03/national-debt-facts.html). Nor is the trend continuously upward: for example, the last government reduced the national debt for the first five years it was in power. There are reasons for concern (mainly the deficit), but not for panic.

    Mr Durkin seriously under-played the role of the banking crisis in all of this. This is the true cause of the crisis that has affected most nations in the Western world many of whom, for years before, were ruled by right-wing parties sympathetic to the documentary’s laissez-faire views. In fact, there is a very strong case for arguing that it was economically neo-liberal views, and consequent financial deregulation, that directly caused the issue with the banks. The £73 billion figure quoted for the cost of the UK bank’s bailout is way under other sources (see http://www.independent.co.uk/news/uk/politics/163850bn-official-cost-of-the-bank-bailout-1833830.html ). The most pessimistic estimates of the UK national debt (at around £4 trillion: http://www.thisismoney.co.uk/news/article.html?in_article_id=509002&in_page_id=2), lower than the figure quoted in the programme) include between £1 trillion and £1.5 trillion for the bailout of the Royal Bank of Scotland and the Lloyds Banking Group. This figure also obviously excludes the effect on government revenues, in terms of falling tax receipts and increased welfare costs, of the recession that was triggered by the banking crisis.

    Bizarrely, Mr Durkin also seems to argue that any task performed by the public sector has no value, and that the only source of value is activity by the private sector, as if a doctor saving a life is adding less value than a speculator in sub-prime mortgages, or as if investing in education doesn’t improve a nation’s wealth-generating capacity. If this is truly Mr Durkin’s economics it isn’t so much social science as an ideology legitimising the rule of a global corporate ruling class, a sort of Great Chain of Being or a Mandate of Heaven for the 21st Century. Mr Durkin’s heroic “private sector” is constantly talked about in terms of “manufacturing”, ignoring the fact that most individuals currently working in the UK private sector have lives that feel about as meaningful in terms of “making a difference” as characters in an episode of “The Office.” He also requires us to forget that it was the economic neo-liberals who allowed the massive contraction of UK manufacturing in the eighties (weren’t we all supposed to get those “service sector jobs”, about which Mr Durkin now has so many doubts?).

    The documentary was correct in identifying Hong Kong as an economic success story in terms of raw GDP growth, but Hong Kong is now the most unequal society in Asia. Perhaps more people would prefer to live in the Scandinavian countries that have followed a left of centre path for decades, with their world-leading happiness indices (see http://en.wikipedia.org/wiki/Satisfaction_with_Life_Index for example) and their solvent economies despite the banking crisis (see http://www.guardian.co.uk/news/datablog/2010/may/27/debt-deficit-oecd-countries-data#data).

    We have to give Mr Durkin the benefit of the doubt and assume that he is merely dangerously delusional (just as he is about anthropogenic climate change, as the producer of the “Great Global Warning Swindle”) rather than a servant of the vested interests that brought the global banking system to the point of collapse and promise to do the same with the global environment.

    Shame on Channel Four for broadcasting this without staging a debate after the programme (as had happened with the documentary on the Green movement in the same slot the previous week) or scheduling a counter-balancing programme in the same slot in another week. A somewhat sinister conclusion would be that they are themselves running scared of right wing elements that are currently in control of the UK Government and seeking to delude the world into failing to notice that the corporate capitalist system that they stand for has just failed as completely as Stalinism. And now the UK is to help out the Irish banks…


  32. dussman Says:

    Obviously the people who fined fault or cannot understand the message that was conveyed in this documentary are public servants. And are just part of the problem .I thought that the program was a bit to long and drawn out.but only because they went over the same info 5 times but from a slightly different view point.
    anyway the argument now should not be with each other focussing on wether someone got the amount of GDP right whilst watching a program that a children can get their head round. the argument is what are we going to do about it?. i don’t think that debate will do anything because its like letting a crack head decide wether they want more crack or not the answer is going to be yes . the government are addicted to tax and we need to do something .debate is what the government specialize in and costs us thousands every day and it’s a waste of time we know what needs to be don i don’t see what the big deal is .if you are on the motor-way and you get a puncture you need not debate weather or not to change the tire or fix it in sum way if you don’t fix it you are stuck .i know this may seem like a massive generalization but most of the questions that we need to address have a simple yes or no answer and the answer can be made by anyone with a normal decent set of morals .clearly not a politician


  33. Mike Says:

    I just watched the documentary, and enjoyed it. Possibly the widely refuted “lack of hard facts” in the analysis was more of an attempt by the makers not to bore or lose those who are not as “into” economics as the previous “experts” on this page. Take the credit crunch for example. How many diluted attempts have there been on tv to explain “what the **** went wrong”. This program delivered a viewpoint that could be understood by the masses. I could, obviously, be picked up on here for some form of intellectual elitism, but I think that this approach by the makers was not to patronise, but just simply get the masses watching and understanding a view. The program, as another writer above me already mentioned, was long enough. To counterbalance any arguments would have lost many. The whole point of this was NOT to come to a balanced conclusion.

    As for the content. I am in favor of a heavy stripping down of layers of Government. Also I would welcome tax reductions (and abolishment in some cases). We cannot afford to lose large businesses at present, HSBC relocating to HK for example. This will downsize ever more the size of our private sector. I just hope our pathetic-soft-touch government has not immunised our nanny state from reform in the other direction.


  34. CmdrTobs Says:

    Mike?! I’m not quite sure how some follow up comments come to my email and some do not…. but I recently read “Mikes” and a few other newer ones.

    Many people have made the argument that this program although biased ‘gets the facts or point across’

    Also since I posted months ago people have said tripe like this: “but most of the questions that we need to address have a simple yes or no answer and the answer can be made by anyone with a normal decent set of morals” (yes and no, 1 or 0, is the fallacy of the small mind. Morals?! No, I would rather get my economic analysis from charts and analysis if numbers not mystic meg)

    Firstly, the program was not bulshi*t just because it was biasd or right wing. It was just demonstrably wrong. It pointed a dangerous half-truth path to prosperity with scape goats along the way.

    For one it tried to pin de-industrialsation on socialist government, which is not true at all. If you look at 1st world countries that do significant manufacturing including Germany and Japan you will see they are a result of massive subsidy and protectionism in crisis to prevent their liquidation. The truth is in Right wing Britain we would have let our “BMW” fail in the 70/80’s or would have let cow boys take it over and run it into the ground for paper profit(MG for example) all under the laissez faire guise.

    Note that I do not necessarily support the anti-free market protection countries like Germany, Fr etc.. and even the type US engages in to an extent. But it is dangerous to claim the left wing social/public is why every other major economic power has arguably not de-industrialise as fast as us, its the truth ON IT’S HEAD.