Britain’s national debt reaches four trillion poundsJuly 14th, 2010 - 2:10 pm ICT by IANS
London, July 14 (IANS) Britain’s national debt stands close to a staggering four trillion pounds, nearly four times higher than officially estimated, the Office of National Statistics (ONS) has said.
The total debt means a per capita debt of around 65,000 pounds for each of the 62 million people in the country.
This is in sharp contrast to the current estimates of 903 billion pounds, which the government said would rise to 1.4 trillion by 2015. A private think tank had estimated it at two trillion pounds. The ONS calculation, however, suggests the actual debt is around 3.8 trillion pounds.
The ONS says the debt amount was arrived at by also considering liabilities, which generally do not figure in the public sector balance sheet.
The actual debt was calculated after including the total taxpayer debts by including figures for public sector pensions, state pension scheme, payments to private contractors promised by Labour under the Private Finance Initiative system, and the amount spent bailing out banks during the recession.
The takeover of the Royal Bank of Scotland and Lloyds Banking Group is estimated to have cost between one trillion and 1.5 trillion pounds. Public sector pensions cost another 1.2 trillion pounds, although the government has previously said that of this amount, 770 billion pounds should be met by the taxpayers. State pensions stand between 1.17 trillion and 1.35 trillion pounds.
Other costs that fall on the taxpayers to cover include 200 billion pounds for Private Finance Initiative deals - under which public infrastructure projects are financed by private capital - and 40 billion pounds for decommissioning old nuclear power stations. The ONS allowed 500 billion pounds for contingencies.
The ONS, however, provided a rider saying that its current figure for the public sector net debt is “selective” as much work remains to be done in constructing an exhaustive balance sheet of the public sector’s assets and liabilities.
David Hobbs, the ONS expert on commercial accounts, says in the study that the public sector balance sheet is an open-ended concept which also considered liabilities that were considered to be off-balance sheet or not covered in official debt measures.
The Independent also quoted a report by the National Institute of Economic and Social Research which says that current taxpayers may have to pay around 30 percent more in tax to relieve their future generations of the debt burden.
The report estimates that despite the major spending cuts announced by the government to reduce the debt, the total tax payable over the life of a person born in 2011 may be as high as 150,000 pounds.
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