Monday 1 July 2019 11:31 pm
A generous parent steps in and acts as guarantor on the mortgage, and also lends their chastened offspring £50,000 to get by.
Over the following years, the young person covers all the mortgage payments, pays back £45,000 of the parental loan and takes back legal responsibility for the mortgage. How much has the parent spent on their child?
If you think it’s £5,000, then you find yourself at odds with Conservative leadership contender Jeremy Hunt who seemingly thinks the answer is £250,000. That’s the only explanation for Hunt’s statement, posted on Twitter yesterday, that “we spent just over £1 trillion bailing out the banks”.
He adds: “If we did it for the bankers then why wouldn’t we do it what is needed [sic] for our fishermen and our farmers now?” An honest comparison of the figures would go as follows. The government’s guarantees immediately after the crash were valued at £1 trillion.
The government did not “spend” £1 trillion on bank bailouts. It spent around £135bn. Today, that figure has fallen to roughly £27bn due to the sale of its stakes in rescued banks and other repayments.
Hunt wants so-called government support funds to back up popular industries in the event of a no-deal Brexit. His implication that these funds should exceed £1 trillion is the latest absurd spending pledge to spill out of the Tory leadership contenders.
Last night, outgoing chancellor Philip Hammond issued yet another plea to Hunt and Boris Johnson to resist the “temptation of a bidding war” as they battle for the keys to Number 10. Johnson himself is guilty of wildly talking up the UK’s degree of fiscal headroom in recent days, as he too promises billions in new projects alongside chunky tax cuts.
While the two finalists are understandably keen to instil a fresh, bold and optimistic tone around their plans for life after the EU, Brexit Britain can surely do better than rely on a vast increase in government borrowing to fund widespread subsidies and electoral bribes.
https://www.cityam.com/no-jeremy-bailouts-did-not-cost-1-trillion/
