As we know, most public sector pensions are unfunded- ie unlike private sector pensions, they have no backing assets and must be be paid as they come due out of current taxation. According to the latest estimate from the IEA, the capitalised liability (ie the debt) amounts to £1,025 bn.
But lest we imagine that's a far off burden destined to be carried by future generations, we've just discovered the annual pay-outs are already running at £21bn pa. That's equivalent to a staggering 6 pence on the standard rate of income tax. Or getting on for £1,000 pa taken from every single British household.
Put another way, we're now paying more in tax to pay public pensions than we're contributing to our own pension funds (such contributions amounted to £15.6 billion in 2005).
According to a new report from the Commons Business and Enterprise Committee, government is seriously understimating the costs of the Nuclear Decommissioning Authority (NDA).
As BOM readers will know, the NDA is the body charged with cleaning up all those dodgy old government nuke facilities, and while it's been given some assets to fund itself, we have long been sceptical about the government's sums (eg see this blog).
Now the BERR Committee says:
"We remain to be convinced that the assets transferred to the NDA will in practice make a significant contribution to paying for nuclear decommissioning. Even if the revenue from these assets were to prove sufficient for the original estimates of the NDA’s liabilities, these have steadily increased. In June 2003 the estimated remaining lifetime costs of the NDA’s sites were £56 billion; by March 2007 this had risen to £73 billion. Moreover the NDA’s commercial income is not only volatile but will decline over time as its work is completed.
Public funding for the NDA will almost certainly have to increase significantly in the coming years over and above current plans."
Public sector pensions and nuclear decommissioning are both big liabilities for taxpayers. Both are growing. Yet neither appear as debt on the government's Enron balance sheet.
Open and honest, it isn't.