Excuse Me to Bring Britain's STG 2 TRILLION Problem to Your Attention

Tuesday, July 13, 2010

Ladies and Gentleman,
sorry to interrupt your 5 o'clock tea for a most alarming information. Hoping it will not spoil your taste for that cucumber sandwiches you nevertheless deserve to receive the news that Great Britain's public net debt is not a manageable STG 932 billion but actually more than double, the Telegraph cites a study.
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 STG1.13 TRILLION of liabilities above the current estimate that puts public sector net debt at a total of STG 2.062 TRILLION.
I hope you did not forget to pour fresh hot water for the lady next to you, just because your mind dreams up new dark tax scenarios when confronted with such figures. Scones with clotted butter may bring back your energy.
According to the Telegraph,
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.
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 STG 770 billion.
This sounds like an invitation for a free cup of tea, ah, sorry, to go STG short.


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