Real national debt over five times higher than latest ONS figures
The IEA proposes a solution that would simplify the benefits system much further
Mark Littlewood says there is truth behind Lord Young's comments
Mark Littlewood comments on latest official figures
Responding to the latest borrowing figures from the ONS, Mark Littlewood, Director General of the Institute of Economic Affairs, expressed grave concern that these figures disguise the gravity of Britain’s financial situation.
“The latest official national debt figure of £845bn underestimates the true national debt figure by a factor of over five. Substantial pension liabilities are excluded from these official figures – they should be moved to the forefront. In reality, Britain finds itself saddled with a national debt of around £5 trillion.
“It is worrying enough to see official figures show a jump in national debt over the last year from the equivalent of 49% of GDP to over 57%, but the reality is that our real national debt stands at 333% of GDP.
“An aggressive approach to getting spending under control and the deficit eliminated must be the government’s top priority. The Comprehensive Spending Review went a small step towards doing that, but a huge leap is needed.”
Notes to editors
To arrange an interview with Mark Littlewood, IEA Director General, please contact Stephanie Lis, Communications Manager, 077 5171 7781, 020 7799 8900, [email protected].
In June this year the IEA published A Bankruptcy Foretold 2010: Post-Financial-Crisis Update, this report uses standard accounting practices to estimate the true level of UK government debt. The research calculates the real national debt at £4.8 trillion, a staggering 333% of GDP or £78,000 per person. The study’s calculation includes liabilities such as public sector pensions and state pensions, as well as an allowance for the bailed-out banks.
The report also advocates a series of measures to tackle the debt problem, including the reform of public sector pensions and an increase in the retirement age.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.