28/09/2011 20:00 BST | Updated 28/11/2011 05:12 GMT

Can Charity pay off the National Debt?

Britain's colossal National Debt looms large over the Labour conference in Liverpool, with the party seeking to harden its credibility on bringing the public finances under control.

As far as the Liberal Democrat and Conservative plan to cut the deficit goes, it's a cocktail of tax rises (like VAT) and spending cuts (take your pick). For Labour, even the cut-sceptic Ed Balls now reminds us about Labour's pre-election plans to cut welfare, education and the Home Office budget and speaks of getting debt onto "a downward path."

But is there another way? Is there an alternative to cutting spending or raising taxes, or both? Could charity be the answer?

Sounds crazy, doesn't it? Well, you'd be surprised. In recent years hundreds of thousands of pounds have been donated by members of the public into a bank account run by a group with the rather grand sounding title of the 'Commissioners for the Reduction of the National Debt'.

That's not all. There is in fact a charity, the National Fund, set up in the 1920s to raise the money needed to pay off the National Debt. As of April last year the value of the fund was a not inconsiderable £319 million. They're doing well; the value was up £74m on the previous year.

It may strike some, me included, as surprising that people would donate to pay down the National Debt rather than give to help find a cure for cancer or feed a starving child in some wretched, God-forsaken corner of the World, but it's their money... well, it's ours now.

Before George Osborne and Danny Alexander get too excited that the seas of red ink in which they and Treasury officials swim will shortly dry up, there's something they need to realise. Whilst the National Fund's £319 million value sounds like a lot of money, at least to me, it is dwarfed by the size of the National Debt. The very latest official estimate, from the end of last month, puts the debt at more than £944 billion - almost 3,000 times larger than the fund, and remember it's taken the fund more than 80 years to get up to £319m.

Maybe the debt-sceptics are right. Maybe debt doesn't matter. Perhaps so long as you can keep it ticking over, getting enough out of Peter to keep Paul happy then you're fine. But then again, maybe not. The way the markets are pummelling Greece and threatening Italy and Spain is frightening; being free of the debt that gives the markets their power means being free of the fear.

And it's not Cloud Cuckoo Land stuff to imagine that we could be free of debt, eventually. According to official figures from the OECD, there are several European countries that have no national debt at all: Estonia, Finland, Luxembourg, Norway, and Sweden. It is possible, and the appearance of Sweden on that list tells me that running sound public finances does not also mean you have to resign yourself to a small, night watchman state.

So, eliminating the National Debt is a prize worth trying for. All we now have to do is convince some contestants on the next series of Celebrity Big Brother or I'm a Celebrity Get Me Out of Here! to make the National Fund their chosen charity. Hmm, as someone once said, difficult, difficult, lemon difficult.