Reality Check: Does debt interest cost more than NHS pay?

From BBC - September 8, 2017

The claim: We pay more on debt interest than on NHS pay.

Reality Check verdict: If you use the Office for Budget Responsibility's headline figure for debt interest then we actually spend more on NHS pay.

With nurses demonstrating in Parliament Square against the pay cap this week, Prime Minister Theresa May was asked by Labour leader Jeremy Corbyn about whether public sector workers could be paid more.

She replied by blaming the last Labour government for the amount of debt the country has, saying: "As a result of the decisions the Labour Party took in government we now have to pay more on debt interest than on NHS pay."

Reality Check asked Downing Street for the figures to back this up and were told that in 2016-17 debt interest costs were expected to have been 49.1bn while NHS staff costs the same year were 48.1bn.

Let's look at those figures in turn.

The debt interest costs figure comes from the Office for Budget Responsibility's (OBR) economic and fiscal outlook from the time of the Budget in March.

The tricky thing with this figure is that the OBR comes up with two numbers depending on whether or not you count what's known as the Asset Purchase Facility (APF).

As part of its attempts to stimulate the economy, the Bank of England has bought a large amount of UK government bonds.

The government has to pay interest on those bonds, so it makes interest payments to the Bank of England.

But once a quarter, the Bank of England returns those interest payments to the government.

The OBR's headline figure does not count the money which has been returned as part of government spending. In 2016-17 it was 36.0bn.


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