The Institute for Economic Affairs (IEA) has published an updated report on the true state of British public finances. This is always a relative calculation as it really depends upon what one includes.
However, this time round they appear to have done a pretty good job and whichever way you look at them they do not make pretty reading.
The differences between the figures are caused by a disagreement about what should be included, not by the actual calculation of the numbers. I therefore set out below the different liability figures, along with the major items they include.
Office National Statistics: £2,252bn (official debt, bank liabilities)
IEA: £4,771bn (official debt, public sector pensions, state pensions)
Tax Payers Alliance: £7,873bn (official debt, bank liabilities, public sector pensions, state pensions)
Centre for Policy Studies: £3,617bn (official debt, bank liabilities, public sector pensions)
There are further differences, including the treatment of PFI and Network Rail, but these are relatively minor so I am ignoring them for simplicity.
I think it is safe to say that the median is around £4 Trillion, or 4000 Billion, or 4000, million, million, or to add a few zeros to it
£ 4,000,000,000,000
The interest payable on this debt is currently 3.5%, and will rise significantly.
I also disagree that Private Finance Initiatives (PFI) projects are not included. Although through the Enron style accounting Gordon Brown used to hide these numbers, most estimate them to be around £200 Billion.
Not an insignificant sum of money by any standards. Worse yet is the fact, as repeatedly reported in Private Eye, these debts are crippling our National Health Service that is closing wards and laying off nurses in order to cover interest payments.
According to the latest issue, the NHS will need to repay some £65 Billion over the next thirty years, on construction projects that cost just a few billion.
