BLACK HOLE COSTS YOU £25,000
Mar 22 2009 By Nigel Nelson Political Editor
EXCLUSIVE Here's how they might claw it back
Every British taxpayer faces a debt of £25,000 to pay for Alistair Darling's borrowing binge.
New forecasts say the Chancellor needs to splash out £704billion on the nation's credit card over the next five years.
That will leave each taxpayer with a bill equal to the current UK average wage, say economists Ernst & Young.
And it will be FIVE times the amount of debt run up over the last five years, which worked out at just £5,000 per taxpayer.
The predictions from forecasting group the Item Club say Mr Darling will need £180billion this year alone, exceeding his own estimate by £62billion.
They are so significant because the Item Club uses the same forecasting model as the Treasury.
Shadow Chancellor George Osborne said: "This is the worst fiscal mess any British government has created in peacetime.
"Tax receipts have collapsed but there is a great deal of scope for spending restraint."
Lib Dem Treasury spokesman Vince Cable added: "Spending will rise sharply over the coming months as unemployment surges.
"And the steep fall in output will continue to reduce tax revenues."
Last week the International Monetary Fund said the UK will have to borrow 11 per cent of national income this year, the most of all the world's top G7 industrialised nations. Ernst & Young say it will be 1.6 per cent WORSE.
Item Club chief economist Peter Spencer said: "The outlook is bleak. The Chancellor must present an unambiguous plan for restoring the public finances to health.
"We are all going to find ourselves paying a lot more tax once the recovery begins and our children will be paying that tax for a very long time to come."
The researchers say Mr Darling must now pump more cash into manufacturing to save jobs.
In April's Budget he is expected to cut taxes to encourage spending, as The People said last week.
But once the recession is over the Government will have to claw the money back. And we have some suggestions, see right, for doing it.
For instance Mr Darling could RAISE tax by 5p, SCRAP the Crossrail plan for new London train links or SUPPLY school meals free to cut obesity in kids.
Total £704 billion
Raise income tax by 5p £100 billion
Put VAT up to 25 per cent £240 billion
Cancel Trident missile defence £25 billion
Nationalise the banks £44 billion
Health screening for over 20s £75 billion
Trim Government waste £170 billion
Abandon Crossrail project £16 billion
Free school meals to save on obesity £18 billion
Cut civil service pay 1 per cent £7 billion
Scrap widening of M25 £5 billion
Cancel our new aircraft carrier order £4 billion