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EU Economics

Britain ‘set for BANKRUPTCY amid £1.85trillion of hidden debt’

FUTURE generations will inherit a bankrupt country, as the Government hides a staggering £1.85trillion of debt, a think tank has warned.

a smashed piggy bank
GETTY   Future generations are at risk of going bankrupt, a think tank has warned


Public sector pensions are a ticking debt bomb with around £1.3trillion needed to cover 93 per cent of the benefits that are currently unfunded, according to a report by the Adam Smith Institute.

The state is taking on new liabilities, while disguising the huge debt that could implode for future generations, the think tank claimed after analysis of the Whole of Government Accounts.

It said the actions are both immoral and reckless with crippling liabilities on top of the national debt, two thirds of which is made up of “unsustainable” public sector retirement monies.

Furthermore, the Department of Business, Innovation and Skills expects to write off 45 per cent of student loans, according to the report.

money

GETTY    Britain’s liability for public sector pensions is huge


Eamonn Butler, Adam Smith Institute director, said: “Homeowners worry about their mortgages and cut back when they are overstretched, but governments don’t.

“Instead they keep taking on new liabilities, with schemes that buy votes today but mortgage the future of our children and grandchildren.

“This is not just wildly reckless, it is deeply immoral too.

“Every law going through Parliament should have a price tag showing not just what it costs us today, but what it will cost us far into the future. Then, like the rest of us, politicians will have to live within their means.”

Overall, the real cost of debt to every man, woman and child in the UK is £53,822 each, according to the Institute.

Report author Nigel Hawkins said: “Successive Governments have failed to tackle the relentless increase in public sector pension liabilities, primarily for political reasons.

“Indeed, had leading PLCs, such as British Telecom, acted similarly in letting their already massive liabilities accumulate further, they would have been pilloried.

“As a matter of real urgency the Government must vigorously cut these excessive public sector liabilities or condemn future generations to staggering financial turmoil.”

A Treasury spokesman said: “Our first duty to the next generation is to put the public finances on a sustainable footing.

“That is exactly why we delivered a series of ambitious reforms to public sector pensions in the last parliament which will save over £430 billion by 2060”

http://www.express.co.uk/finance/city/662052/Britain-set-for-BANKRUPTCY-amid-1-85-TRILLION-of-HIDDEN-debt

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