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UK Public Sector Debt Around £2 Trillion
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TOPIC: UK Public Sector Debt Around £2 Trillion

UK Public Sector Debt Around £2 Trillion 9 years ago #567

  • interceptor
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UK Public Sector Debt Around £2 Trillion

Daily Telegraph, 12 Jul 2010

A study by the Institute of Chartered Accountants in England and Wales (ICAEW) and the Centre for Economics and Business Research (CEBR) has revealed that there could be a further £1.13 trillion of liabilities above the current estimate that puts public sector net debt at £932bn.

Researchers said their figure incorporated liabilities that are currently considered to be "off-balance sheet" or not covered in the official national debt measure, such as public private partnerships or private finance initiatives and public sector pensions.

The researchers said that their report illustrated the need for transparency in the public finances and called on the Office for Budget Responsibility to raise awareness of why contingent liabilities are currently not considered part of public sector debt assessments.

Michael Izza, ICAEW chief executive, said: "While there are important debates to be had about specific spending cuts, I believe that meaningful reform is necessary to underpin sustainable public finances over the long term and create a culture of fiscal responsibility."

Charles Davis, managing economist for CEBR, said that public sector pension liabilities were by far the biggest consideration. The Treasury has estimated the public sector pension liabilities to be £770bn.

"Our research draws upon existing publicly available data and previously undertaken analysis to illustrate that the liabilities that are not included in the official public sector net debt figure are large but, in many cases, uncertain," he added.

Britain's Public Debt Doubled to Now £4 Trillion 9 years ago #569

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Excuse Me Again But Britain's Public Debt Doubled Again Overnight to Now £4 TRILLION

Prudent Investor - July 14, 2010

And you still count?
It was only yesterday that Britain's societies of accountants and economists disturbed 5 o'clock tea, saying that - according to their calculations - the Empire's public net debts of £2 Trillion were more than double the official figure.
This was a bad guess. It is £4 Trillion or again double that overnight, at least to this story in the Independent:

The true scale of Britain's national indebtedness was laid bare by the Office for National Statistics (ONS) yesterday: almost £4 trillion, or £4,000bn, about four times higher than previously acknowledged.

It quantifies the burden that will be placed on future generations, and it is the ONS's first attempt to draw together the "off-balance-sheet" liabilities that have been accumulated by the state. The figures imply a huge "intergenerational transfer" - broadly in favour of today's "baby boomer" generation at the expense of younger people and future generations.

The debt primarily consists of the cost of public sector and state pensions, and of payments promised to private contractors under private finance initiatives. It far exceeds any of the figures so far published for the national debt, the largest current estimate for which is £903bn...

It appears Dagong's "AA-" rating is closer to the reality than the "AAA" given by Western rating agencies, who have so far only cautioned a downgrade in the distant future for the UK.
But it still escapes my understanding how 3 major bodies can differ so widely on the key figure of these times: total government debt.
We have seen it before earlier this year, when debt figures of Greece and Ireland multiplied within a few days/hours, leading to massive loss of confidence in the troubled Euro.
This is understandable. Can we trust official figures anymore when they exponentially mushroom overnight?
I have searched the reported figures on the ONS website with a blank result for the staggering £4 Trillion number, this being the latest on public net debt. Note the steeper curve due to bank rescues, though.
The Independent exclusively has these details and a sobering perspective for future generations:

If the current generation of taxpayers wanted to remove the higher bills facing their children and grandchildren, they would now be paying around 30 per cent more in tax.

The ONS data strengthens the Government's hand in its attempt to pull down state spending.

The ONS itemised the public sector's main liabilities as:

* Future payments for the state old age pension: £1.1 to £1.4 Trillion
* Unfunded public sector pensions for teachers, NHS staff and civil servants: £770 billion to £1.2 Trillion
* Payments under private finance initiative contracts: £200 billion
* Contingent liabilities (eg bank deposit guarantees): £500 billion
* Nuclear power plant decommissioning: £45 billion
* Impact of financial sector interventions: £1to £1.5 Trillion

Given the wide estimates, would you be surprised if another Trillion gets tacked on?
If you still count find the exact figure of global debts from 2009, that figure still stands unchanged and unchallenged.

Re:UK National Debt Around £4.8 Trillion 8 years, 11 months ago #678

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UK Government urged to reveal 'true' national debt of £4.8 trillion

Daily Telegraph, 20 Aug 2010

The Institute of Economic Affairs (IEA) has calculated that the national debt is £4.8 trillion once state and public sector pension liabilities are included, or £78,000 for every person in the UK.

The IEA raised its concerns after the latest public finances data from the Office for National Statistics (ONS) this week, which showed that the total debt, excluding bank bail-outs, is £816bn – itself a record high. However, the figures strip out the state's pension liabilities in a contravention of standard accounting practices.

Mark Littlewood, the IEA's director-general, said: "The latest official national debt figure is seriously misleading. Looming in the background are pension liabilities. These should be moved to the forefront.

"The ONS should include these liabilities in their calculations. It is shocking enough to see official figures revealing a jump in national debt over the last year from the equivalent of 48pc of GDP to 56pc, but the grave reality is that our real national debt stands at 333pc of GDP."

Nick Silver, an IEA research fellow, said the full figure, including the £1.2 trillion public sector pension liability and £2.7 trillion state pension liability, should be published either monthly or annually alongside the net debt data for reasons of transparency.

The ONS has already begun to assemble the data, publishing the full list of Britain's debts and liabilities for the first time in July, which came to a total of between £3.68 trillion and £4.84 trillion.

Aileen Simkins, ONS director of operations on economic statistics, said the figures would be updated in September and that the ONS plans to compile and release them on an annual basis "to begin with".

"We are in no doubt that there is a bigger number that is also relevant to public data," she said. "We think it is important to have more transparency on public sector debt – looking at figures that go beyond standard monthly net debt and include state and public sector pensions."

The ONS numbers included a £1 trillion to £1.5 trillion liability for the Government's stakes in the part-nationalised banks, equivalent to the relevant portion of their total liabilities, £1.35 trillion for state pension liabilities, and £1.2 trillion for public sector pensions.

Re:UK Public Sector Debt Around £2 Trillion 8 years, 9 months ago #769

  • princess76
I can't imagine how UK sector debt came up to almost £2 Trillion? This is a very sad situation. I thought this problem is in the US only, now even London is having financial problem. I really hope and pray that this economic downfall worldwide will soon be put to an end.
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Re:UK Public Sector Debt Around £2 Trillion 8 years, 9 months ago #771

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That usually does not happen accidentally. Pushed or drawn? It doesn't matter at all
Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves.

Re:UK Public Sector Debt Around £2 Trillion 8 years, 9 months ago #788

  • akihira29
In every country, we have our own debt. But I think government has the most effort in facing such public debt. UK has a government of course, so they but should clearly outline the assumptions it used and total public-sector liabilities.
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