The calculator is attached to a report which goes through area after area showing that Gordon Brown's economic record has been utterly dismal. It should illustrate the context to the economic gloom and the OECD's prediction that Britain is the only major economy that will experience a recession this year. Brown hasn't been the unlucky victim of international conditions but the author of his own demise.
5 comments:
I think the British politician-based internet tools are much more interesting than ours... we just have the Sarah Palin Baby Name Generator.
I'm not sure whether that pays attention to the name you give it, and generates something based on that, or just gives you a random name.
Hi Matthew
Good TPA report by the way!
However, is there any reason why state pension liabilities have been excluded from your estimate of the national debt? The back of my envelope tells me that this could add comfortably over £4 trillion, plus possibly £150 billion per year for extra benefits! Plus maybe £50 billion per year undisclosed extra cost of public sector pensions.
I've found it very difficult (unsurprisingly?!?) to find proper data though and it does need some proper analysis by someone as it always seems to be overlooked.
Sam
Sam,
Public sector pensions are left in there.
The state pension is an interesting question. I think it should be in a complete account of the state's liabilities. However, as the promise to pay them in future is purely political, rather than contractual as in the case of public sector pension, I think they would strike many people as very different to a debt, in conventional terms. We've erred on the side of caution and left them about but I agree that there is a good case they should be included.
Matthew
Thanks - my view too would be that the default position should have state pensions included as they are a promise by govt to pay a certain amount of money in the future. The fact that the govt could (partially) default, or devalue through high inflation, (as it could also do on gilts for example, or even public sector pensions if push came to very hard shove) is a separate (but also important) argument.
Anyway, hopefully one of your future analyses will cover this issue, particularly as it seems very hard to pin a number down.
On the public sector pensions, I struggled through some budget reports etc, and as far as I can tell your analysis includes an estimate of the cost of benefits accrued (table 2.1.1) but doesn't include the cost of further accrual. Further accrual would add around £34.5 bn for 2007/8, according to the IEA's January 2008 Sir Humphrey's Legacy update paper. More if you add in interest and knock off benefit payments.
Hope this helps - I'm sure you are more used to interpreting figures from Budget reports etc than I am!
I would like to add that I think your report is very good and I just wanted to help ensure the full and true (diabolical) picture of reckless govt spending is shown and those spendthrift politicians are not let off the hook.
Sam
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