| Topic: | Public Sector Pensions Defecit of £1.2 trillion adds to Britain's Debt Crisis | |
| Posted by: | David Giles | |
| Date/Time: | 29/10/09 16:01:00 |
| Thanks Ed, This is a very alarming article welll worth reading in full. It commences "Public Sector Pensions Deficit of £1.2 trillion Adds to Britain's Debt Crisis Jun 29, 2009 - 02:20 AM By: Nadeem Walayat " The mainstream press is widely reporting that the public sector pensions deficit has now grown to £1.2 trillion, standing at 85% of GDP which is more than triple that of the United States as stated in a report by the British-North American Committee : "The Governments of the UK, US and Canada are understating significantly the true cost of their employees’ pension costs in terms of both the liabilities already incurred and the annual cost of running their public sector schemes. In the UK, where unfunded schemes predominate, public sector pension liabilities are £1,177 billion, about £20,000 for every person in the UK, equivalent to 85% of GDP, a percentage three times as high as in North America. "These findings are in a study "The need for transparency in public sector pensions", published today by the influential British- North American Committee (BNAC). In the US and Canada, where the majority of public sector schemes are now funded (i.e. a ‘real’ fund is being built up to meet all or some of the cost of anticipated future pension liabilities), the position is somewhat better. In the US, whilst the net liabilities of public sector schemes are higher at around £2,700 billion, this equates to ‘just’ 28% of GDP. In Canada, liabilities are under £250 billion, equating to around 27% of GDP. "Leaving aside that there is an apparent error in the figures in that £1,177 billion is now nearer to 95% of GDP than the stated 85%, given the fact that the UK Economy has by now contracted by more than 5%. The public sector pensions deficit of £1,177 billion for 2009 is considerably higher than my own estimate of £810 billion as of November 2008, which adds nearly £400 billion to Britain's debt mountain that threatens a decade of economic stagnation as a consequence of high inflation and interest rates under the weight of servicing a huge growing debt mountain. " And it goes on and on. What a horrible mess Tony Blair and Gordon Brown has got us into. |