Public Sector Net Debt now stands at £1.3 Trillion.
That means the government has borrowd £1.3 Trillion from the taxpayers. Over £20,500 is now owed to every single citizen in the UK. If we include the liabilities for unfunded public sector pension schemes that debt actually stands at an eye-watering £1.7 trillion. No funds are saved to meet the expected pension payments when they become due. The bill is simply left for future taxpayers to pay.
Politicians must urgently confront the enormous debt mountain that has built up thanks to overly-generous but completely unfunded public sector pensions. Failure to give taxpayers a better deal will leave our children and grandchildren with a frightening bill to pay for today’s public sector staff.
The Government’s estimate of the size of this shortfall is also not calculated in the same way as the private sector must calculate its liabilities. Both the Government and the private sector reduce the expected payments in future years by a discount rate, to account for the fact that money held now to pay for a commitment in the future should grow.
But these discount rates are not the same. Instead of using the market discount rates, the Government uses a more generous rate determined by a committee. We need the government to wake up and deal with the size of their debt instead of waiting for future generations to pick up the bill.