So, it seems that British national indebtedness is a wee bit bigger than we thought that it was going to be.
Actually, according to the Office for National Statistics (ONS) it is almost £4,000,000,000,000: about four times higher than anyone has actually admitted.
The figures show that there is likely to be a massive "intergenerational transfer”. In short today’s generation will leave a huge burden for younger people and future generations.
The debt consists among other things of the cost of public sector and state pensions, and of payments promised to private contractors under Labour’s idiotic private finance initiatives where vast amounts of money have been wasted on buildings paid for by the public that the public can't even use.
If today’s taxpayers wanted to remove the higher bills facing their children and grandchildren, they would have to pay around 30% more in tax and that's not likely to happen.
The ONS itemised the public sector's main liabilities as:
* State Retirement Pension: £1.1trn to £1.4trn
* Public sector pensions: £770bn to £1.2trn
* Private Finance Initiative contracts: £200bn
* Contingent liabilities (eg bank deposit guarantees): £500bn
* Nuclear power plant decommissioning: £45bn
* Impact of financial sector interventions: £1trn to £1.5trn
The figures propose that a realistic estimate of the public sector’s liabilities might be around four trillion pounds
According to the ONS failure to cut back now or raise taxes will leave our children with an tax burden of £200,000 each just to pay for public services which we are currently using and, to be fair, have been used by past generations.
It appears that such things such as free university education; mortgage interest relief at the highest marginal rate of income tax; property inflation with transfer of wealth from the young to the old, and free long-term care for the elderly are no longer affordable. And of course the proceeds of privatizations and demutualization and distribution of reserves of building societies are things that will never happen again.
Huge increases in the state pension and state subsidized public service pensions liability has come about because of massive increases in the number of people eligible and of course longer retirements, even if the extra years are not always spent in good health or fitness.
Life, in short, is going to get a lot harder because the baby boomers and their parents had it soft. So it looks like we can get used to more of what Camerclegg is throwing our way.
My question is why did no one see this coming? Why did the Labour Government not know that this was round the corner, and the opposition can't escape blame. Is it not their job to be holding the government to account? And what of all the senior statesmen in the House of Lords? Nothing there either?
How badly we are served by our politicians.
Actually, according to the Office for National Statistics (ONS) it is almost £4,000,000,000,000: about four times higher than anyone has actually admitted.
The figures show that there is likely to be a massive "intergenerational transfer”. In short today’s generation will leave a huge burden for younger people and future generations.
The debt consists among other things of the cost of public sector and state pensions, and of payments promised to private contractors under Labour’s idiotic private finance initiatives where vast amounts of money have been wasted on buildings paid for by the public that the public can't even use.
If today’s taxpayers wanted to remove the higher bills facing their children and grandchildren, they would have to pay around 30% more in tax and that's not likely to happen.
The ONS itemised the public sector's main liabilities as:
* State Retirement Pension: £1.1trn to £1.4trn
* Public sector pensions: £770bn to £1.2trn
* Private Finance Initiative contracts: £200bn
* Contingent liabilities (eg bank deposit guarantees): £500bn
* Nuclear power plant decommissioning: £45bn
* Impact of financial sector interventions: £1trn to £1.5trn
The figures propose that a realistic estimate of the public sector’s liabilities might be around four trillion pounds
According to the ONS failure to cut back now or raise taxes will leave our children with an tax burden of £200,000 each just to pay for public services which we are currently using and, to be fair, have been used by past generations.
It appears that such things such as free university education; mortgage interest relief at the highest marginal rate of income tax; property inflation with transfer of wealth from the young to the old, and free long-term care for the elderly are no longer affordable. And of course the proceeds of privatizations and demutualization and distribution of reserves of building societies are things that will never happen again.
Huge increases in the state pension and state subsidized public service pensions liability has come about because of massive increases in the number of people eligible and of course longer retirements, even if the extra years are not always spent in good health or fitness.
Life, in short, is going to get a lot harder because the baby boomers and their parents had it soft. So it looks like we can get used to more of what Camerclegg is throwing our way.
My question is why did no one see this coming? Why did the Labour Government not know that this was round the corner, and the opposition can't escape blame. Is it not their job to be holding the government to account? And what of all the senior statesmen in the House of Lords? Nothing there either?
How badly we are served by our politicians.
Well, the opposition can only hold the government to account over what they know. Labour deliberately hid a lot of the "fine" details behind various finance initiatives as well as delaying any reports on the finances until after the election. Also, the opposition do not get a chance to look at the real books until just before an election, again Labour deliberately delayed this till the last minute, even then only because they were forced too by the civil service. Don't forget when Labour took over in 1997 the balance books were actually in surplus too, in 13 years they've destroyed the economy from being in the black to £4 trillion in debt, plus still overspending at the end of their term by over 30% more than they were taking in.
ReplyDeleteBe interesting for you Scots if you ever get independence with your West coast Labour voters. Republic of East Scotland and the Democratic Peoples Republic of West Scotland split within 10 years I reckon ;-)
QM: With respect, I know that no one ever knows the exact state of the finances until they actually pick up the books, (and get a message from the lovely Liam Byrne) but they can get a reasonable idea from the time they spend with the very top civil servants some time before the election.
ReplyDeletePlus the people of the shadow Treasury team should be working on something. They have economists. What party do you think the members of boards of directors of banks vote for? Lord this and Lord that, Sir this and Sir that, the Hon and Rt Hon this and that, are on balance, likely to be Tories (on the basis that they are inordinately wealthy and don’t want to have any of that wealth redistributed to lesser people).
I know there are exceptions, but the bulk of your City board members will vote Tory, be in the Tory party and possibly even be Tory MPs or Lords. I wonder that over long lunches of the type that cost more than I earn for the whole week, no one in the banks thought to mention to the Tory member they were sitting opposite just what a complete cock up they were making of everything; just how incredibly greedy they had been and at least warning them to get their massive wealth the hell out of England before the whatsit hit the fan.... hum....
Yeah... you know, I think I understand what you’re saying about the aftermath of independence.
It won’t be easy. The Weegies will pose a problem I’ve no doubt. But you know, being ruled from our own capital by our own people instead of from somewhere way down near France and on an economic model based on the South East of England......... oh I can smell the fresh air.
We’ll be free...we’ll be us. Well fly our flag. And we will need to deal with our problems. (Labour councillors being the first.)
I’ve never felt freedom and independence. I don’t know what it’s like.
Anyway....I mean, England will have its own problems... There’ll still be “all t’socialists oop North wither flat caps, whippets and black pudding butties” to content with!!! :¬).....
Four Trillion, why don't we just sell the entire country to Donald Trump and he could make it into a golf course we all ready play second fiddle to the US anyway, and QM that means Englandshire as well!
ReplyDeleteWould he want it?
ReplyDeleteWe could re-name the country Cameronland a wholly owned subsidiary of Disneyland where people can work for their benefits doing tricks for fat Americans
ReplyDeleteThese debt figures have been well known long before BlueLabour took power. There are dozens of blogs and books and newspapers that showed the full details with links to ONS figures years ago of what was coming. The house price crash and banking sector collapse has been similarly foretold.
ReplyDeleteThe public pension liabilities didn't just build up during Labour's watch but have been ignored for decades. Same with nuclear decommissioning, lack of investment in power distribution and the housing crisis etc.
In truth we've had a steady slide into depression since the early 70's. North Sea Oil initially kept the wolves from the door and helped Maggie defeat the miners and flood the mines for 1,000 years. Then the 80's City revolution of loadsamoney traders and electronic share trading helped us. Then utility and other crown jewels were sold off. Then once they were all gone it was the imported money and low interest rates boosting house prices and causing a credit fuelled boom. That's gone aswell now and we're left with crashing house prices, collapsed manufacturing ( 33% to 12% of GDP in 30 years) , borrowing of £150Bn a year, rising unemployment and a debt forecast of £4tr.
Oh and to cap it all we're fighting wars abroad, building 2,500 useless windmills and wasting billions on a corrupt EU.
I think we might be finished now.
Eeeeek R.......
ReplyDeleteI guess that passage I booked to Norway was a good idea.
Adjø: Farvel, på gjensyn. Vi snakkes, ha det fint.
Great post by the way..... you summed it up far better than I did.