Brian Gilbert has totted up all the different bits and pieces here.
I'd argue that the bulk of the bank bad debt guarantee is not at risk; that the QE figure is double counting and that it's unfair to include future Basic State Pension payment (because you can match it with future tax receipts) but never mind - that would still only get us down to three times GDP, which is one heck of a figure.
Saturday, 29 August 2009
True UK public sector debt is more than four times our GDP
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9 comments:
Also minus gbp2bn of ridiculous pension nonsense that isn't actually owed to anyone.
(if you include pensions, then you might as well include the collateralised value of future defence payments plus NHS costs for everyone who's currently alive - they're both 'likely and predictable future spending' but not 'actual debt that the government has to pay', like pensions)
JB, that's the difference between 'contractual' and 'political' obligations. Public sector workers have a contractual right to their pensions - if they don't get them, they can sue in court under the normal employee-employer relationship.
If 'we' decide that henceforth we aren't going to start wars with people or privatise the NHS, nobody can actually sue 'the state', as it is a political decision whether to do so or not. And politics means doing what the majority of voters think is a good idea and are prepared to vote for (whether it is or not is a separate debate).
Do we anywhere have a sensible tally for the state's assets? I know that the Sunday Times has over the years moaned about "the Queen's" wealth, by which it seems to mean a part of the state's assets, but what about all the rest? The state might find lots of customers for some of its acreage. But it would get less for some of that acreage than it otherwise would have done because of its recent laws that confiscate property rights. Property across which oiks may ramble is worth less than property over which you decide who may enter.
Thanks for the link Mark.
The point of the post is to highlight the difference between what is claimed and the reality.
You can probably argue some of the points (and please feel free to critique them) but overall it's basically a correct statement of present Governement liabilities, and thanks for pointing out the difference between pensions liabilities and i.e. defence spending.
Congrats on your recent post.
Is it correct then that if Parliament decided in a vote to reduce all pensions to all State pensioners (including those currently retired) on the ground we cannot afford it anymore, they could sue and demand their money? Who would enforce such a court decision? Would the State actually allow the law and police to act against itself? I doubt it.
At the end of the day the body with the power can make happen what it wants to happen. And if the State decided unilaterally to cut State pensions, that would happen, whether the pensioners liked it or not.
I'm afraid we have the illusion that 'the law' applies to govt and the State, but it is just that, an illusion.
S, "Is it correct then that if Parliament decided in a vote to reduce all pensions to all State pensioners (including those currently retired) ... they could sue and demand their money?"
My point is that pensioners wouldn't be able to sue if the law were changed so that e.g. old age pensions no longer increase with RPI, but were frozen. This is a purely statutory right up and until the law is changed, not a contractual right.
But if you are on an index linked civil service pension and they froze it, you would be able to sue because it is a contractual right.
Half the pension 'debt' in the original post is state pension obligations, rather than employer pensions.
Even for the other half, given that there's a whole industry based on helping private sector companies wriggle out of their pension obligations, I'm entirely certain the government could *substantially* reduce those payments without breaching contract law, given the political will to do so.
Sorry, my wording was bad. I meant can former State employees sue for their pensions, if Parliament decreed that they had to be reduced (for example because there wasn't enough money in the fund to pay them, and the govt didn't have the cash to top the fund up either)?
And again, if they can sue, how would such a court decision be enforced if the govt just said 'We haven't got the money'?
S, if you study this area of law closely enough, there is of course a grey area, but at one extreme we have the State qua employer (who can be sued like any other employer) and the State qua legislator (who can legislate what it likes and can't be sued).
Quite what would happen in the scenario you outline, and which side of the line it would fall, I do not know.
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