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The official national debt is expected to reach nearly £1.4 trillion in 2015-16. But it's only part of the real national debt. If you want to really understand our total public sector liabilities you also need to include items like PFI deals and bills for nuclear decommissioning.
But by far the biggest liabilities that are kept off balance sheet are pensions. This includes the deficit in the funded Local Government Scheme, state pensions and unfunded public sector pensions. The problem is set to get worse: people are living longer; the number of public sector employees has ballooned over the last decade; borrowing is still increasing, despite the Government's much discussed but barely enacted austerity agenda. When combined they mean that public sector pensions have to be reformed if they are to be affordable in the future.
Public sector unions disagree, of course. They have met during the last three days at the Trades Union Congress Conference in London to discuss, among other things, strikes to protest against pension reforms. The rhetoric is provocative, with Paul Kenny of the GMB said: "Let's make it clear - we will give them, any politician, the biggest campaign of civil disobedience that their tiny little minds can ever imagine." Strong stuff.
Let's look at some facts. Say a council middle manager finishes his career on £60,000 a year. The accrual rate is in the Local Government Pension Scheme is 1/60th of final pay, multiplied by the number of years on the scheme. So if he has been on the scheme for 30 years, then he would be entitled to £30,000 annually. Or a low paid council worker finishing on a 30 year career on a salary of £25,000 would get £12,500 annually.
In the NHS, a scheme which makes part of unfunded pension liabilities, if you finished a 30 year career on £40,000, you would get £15,000 annually and a lump sum of £45,000. A teacher with the same career span finishing on a salary £50,000 will get a pension of £25,000 a year.
When unions say that the average public sector pension is around £5,000, they include those who only worked for a short time in the public sector, meaning a small pension, which skews the average horribly. Public sector pensions are generous when scheme members stay on them for their entire career, which is why they are so keen to maintain the status quo, and why unions are planning to cause such disruption later in the year.
Today, the TaxPayers' Alliance has released the Trade Union Rich List, which details the salaries of union bosses fighting necessary spending reductions and pension reforms. It's a cosy club to be a part of, and disassociates them from the working classes that they love to say they represent. What working class person could expect to receive £310,000 in severance pay if they left their job? It's what Derek Simpson got from Unite, and underlines the sheer hypocrisy of their rhetoric.
Changes to pensions to make them more affordable are unavoidable. Threats from trade union bosses, made from the comfort of their well-feathered nests, should be challenged because the facts are there for reasonable people to see and debate. Restoring the UK to fiscal health was never going to be easy but these obstacles must be overcome.
Follow Emma Boon on Twitter: www.twitter.com/emmaboon
If we can pay for stupid wars and reckless banks we should be able to give old people the pensions they were promised.
I work in the private sector so there's nothing in this for me, but fair is fair!
Why are these reforms "necessary", when there seems to be an endless pot of money for unnecessary wars, which have nothing to do with us - yet repective governements are willing to squander my hard earned tax money and also young soldiers lives so they can perpetuate the so called 'war of terror' and the armaments industry. Obscene is what I call it.
Somehow I doubt if Emman Boon and her right-wing Tax Payers Alliance will take on board my views though!
The Governor of the Bank of England made a speech in which he categorically stated, the financial mess we're in now is not the fault of the people trade unions represent. So why should they suffer as a result.
Out of interest how many members does the Taxpayers' Alliance have? And why are you so worried about what the leaders of trade unions earn, yet I've never heard a peep from the Taxpayers' Alliance about the excessive bonuses & the rewarding of failure in the City of London.
Pension reforms are required to balance the government sheets. After 13 years of labour-union supported government, the government's budget deficit worsened and bloated.
the nanny-state experiment is over. It is time for people to get out of their houses and start looking for jobs. Thats how you EARN a living.
There are many hard working people in the public and private sectors, but it is a mistake to pay everyone out fo the hard work of a few.
the government already signed billions of public-private partnerships in fixing public infrastructures and economic zones. those are job creating policies.
The government is reducing its size as well as investing for the betterment of the public.
The Ultra-Left of the socialist parties never created any job. During their reign, most of the jobs were outsourced.
How is the government reducing in size when the budget deficit is STILL increasing, despite the ideological cuts the government is making?
Pensions are given to people who have already got a job so why are you talking about policies that may or may not create jobs? (They obviously have done the latter after the release of yesterdays unemployment figures!)