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Brown Told Stop Cooking The Books

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ONS adds £1.25bn rail funding to public debt - Guardian

PRESSURES on Gordon Brown over the deteriorating state of the public finances were emphasised again yesterday by a ruling that £1.25 billion of privately raised funding for the Channel Tunnel Rail Link must count as public debt. ........

On its own, the £1.25 billion will not make a dramatic difference to the Government’s total debt of more than £417 billion. This remains well below the 40 per cent of GDP ceiling under Mr Brown’s “sustainable investment rule”.

But while the ONS said the decision sets no precedents, it rekindled speculation over imminent rulings from official statisticians which could add greatly to stresses on the Government’s books.

The ONS has made clear that present classification of £24 billion of private finance initiative deals do not conform to international rules. The deals affected are those where little risk has been transferred to the private companies involved. Although they are judged to be “on balance sheet”, none of the related borrowing has been counted towards the national debt.

The ONS has said that a potentially large sum will soon have to be added to government debt but it does not expect to have the complex estimates required for a year.

But with the rail link decision highlighting the issue again, there was City speculation that Mr Brown may alter his rules, and raise the 40 per cent debt limit, ahead of the ONS estimates. Such a step would add to the criticism that he faced over the reassessment of his “golden rule” last month.

“I think if there are these types of pressures, the lesson we have learnt is that the fiscal rules do not dictate policy, it will be the other way around,” said John Butler, of HSBC

And that doesn't include the provision for the £460 Billion needed to pay for Public sector pensions which he has also swept under the carpet.

The cost of the UK's public-sector pensions is sometimes described as "the elephant in the room".

The cost of the UK's public-sector pensions is sometimes described as "the elephant in the room". In fact, the rising bill for these gold-plated taxpayer-backed schemes is more frightening still. It's a stampeding herd of mammoths in the room - hairy and with over-sized tusks......

Public-sector pensions remain largely unreformed and sheltered from realities. Yet the cost to taxpayers is substantial - and growing. Government figures show an enormous hole of £460bn in public-sector pension finances - more than 30 per cent higher than in 2001. But even this is probably an under-estimate.

When Watson Wyatt, a respected actuarial consultant, performs the calculation, it uses the stricter accounting rules the Government insists the private sector employs when assessing pension deficits. On that basis, the shortfall in the public sector is an eyewatering £690bn - more than £11,000 for every man, woman and child. When pension liabilities are included, the national debt soars from 34 per cent of GDP, to a troubling 85 per cent.

That would incinerate Gordon Brown's fiscal rules if he accepted the methodology.

However, the more important point is that - unlike private-sector schemes, where contributions are invested in a fund from which pensions are paid - public-sector pensions are almost exclusively "pay-as-you-go". In other words, they're financed directly from current taxation or borrowing. And as longevity rises and the public-sector payroll expands - up 890,000 since Labour took office - the cost of pensions rises remorselessly.

Over the coming years, says Watson Wyatt, without serious reform, taxes would need to rise by 5p in the pound just to stop these liabilities growing. And reducing them would cost far more.

I also remember there is a hefty chunk associated with the demise of Railtrack hidden away somewhere, does any one have a link?

Browns chickens are coming home to roost, I suspect he may make a rush for Number 10 before the end of the year, possibly under a fake story about Blairs ill health, suffering from stress or something like that. It was reported yesterday that Blair would not want to continue as an MP after stepping down. :ph34r:

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I found this, don't know if it has been posted already  :blink:

http://portal.telegraph.co.uk/money/main.j...xfrontcity.html

Yes, it looks like the Guardian also forgot about Network Rail's £21billion of Government guaranteed debt, as that has already been classified as off the government's balance sheet. How the hell does he get away with hidding things as "off balance sheet debt !!"

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Yes, it looks like the Guardian also forgot about Network Rail's £21billion of Government guaranteed debt, as that has already been classified as off the government's balance sheet. How the hell does he get away with hidding things as "off balance sheet debt !!"

Good point.

After the recent trial brought about by Railtrack shareholders and the testimony of Steven Byers, the ONS are pushing to have this £21 billion of debt added back into the Treasury's figures.

Makes me sick how they operate. Enron Chancellor, corrupt Government and everyone knows about it!

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He's been lying about the state of the publics finances. If he were a company accountant he would be sacked. Unfortunatley ONS does not have the ability to do that.

I wonder what impact this will have on the performance of the overall economey though. Did the city base its decisions on the real deficit figures or Gordons - when this happened to Enron it collapsed, I don't expect that of the Uk economy; not yet anyway, but the city's reaction will be interesting.

It could cause a further devaluation of the pound and its associated consequences.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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