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Treasury

(Not quite) the whole story

Dec 6th, 2011
by Paul Harwood.
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The Treasury has recently published the Whole of Government accounts for 2010, which provide consolidated financial information for over 1,500 public sector organisations. This is the first time that such a detailed document has been put together and is a positive step towards greater transparency in how taxpayers’ money is spent.

Perhaps the most worrying figure in the report is the UK has a liability of £2.4 trillion – the amount of money that taxpayers are currently committed to paying out if there was no change in government policy. This is a staggering sum – equal to 170 per cent of GDP. Even if the government sold off every asset it had, from the Royal Navy’s ships to the road network, we would only be able to pay off less than half this liability.

It’s a stark reminder of the challenge facing the government. The deficit is equal to 92 per cent of the public sector wage bill. The net public service pension liability (not including state pensions) is over one trillion pounds.

There are still many organisations not included in the report, perhaps most notable the banks in ‘temporary’ public ownership and various transport organisations, so the total size of the state is yet bigger than the report suggests. However, they may be included in future releases to give a more representative picture.

There is a huge amount of information presented in this report so it is well worth a look, whether you’re interested in pensions, the cost of services or simply curious to see where your money goes.

West Country MPs against rise in petrol duty

Nov 17th, 2011
by Tim Newark.
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West Country MPs are up in arms over any proposed rise in petrol duty. Speaking out in the House of Commons debate this week, Bridgwater & West Somerset MP Ian Liddell-Grainger said he would rebel against the government if they put up petrol prices by 3p in January. The debate came only days after we revealed the excessive motoring taxes that motorists are facing across the UK.

‘It is a no-brainer, there is no way the Chancellor can put it up – it is hard enough in rural areas without another 3p on a litre,’ the Somerset MP told the Western Daily Press. ‘As it is, petrol prices are too high and we need to find a way to get them down.’

‘We have a large number of haulage firms who are very concerned about the price of diesel,’ said Stroud MP Neil Carmichael in the Commons debate. ‘They are in turn passing it on to small and medium-sized firms and it is causing difficulties for them.’

Claire Perry MP drew attention to the lack of competition among filling stations in her Devizes constituency. Other MPs in the South-West demanding action against fuel taxes are Robert Buckland (North Swindon), Justin Tomlinson (South Swindon), James Gray (North Wiltshire), John Glen (Salisbury), and Tessa Munt (Wells).

It’s up to the Treasury now if they listen to the growing chorus of voices calling for a scrapping of the rise in fuel duty.

Tim Newark, Bath & South-West TaxPayers’ Alliance

Greek bond yields show their spending cuts weren’t deep and fast enough

Sep 8th, 2011
by Rory Meakin.
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Financial markets have recently lost much of the little faith they had in the Greek government’s ability to repay its debt. A bond promises to pay the bearer a fixed sum on a fixed date. One year bonds are those where the due date is one year on from now. Yields on these have rocketed to 96 per cent on Greece’s one-year government bonds, meaning investors are only prepared to pay just over half the value of the promised payment due in a year’s time.

The Greek government simply cannot borrow money at a sensible rate, because it has borrowed too much for too long and its public spending cuts are too slow and too shallow. The Treasury’s Budget 2011 forecasts predicted that the government would pay almost £50 billion on debt interest this year. British bond yields are less than one per cent. Britain’s economic position is much more stable than Greece’s, but the Greek experience does show what happens when governments which spend too much money fail to cut public spending deep and fast enough.

Take a look at our Real National Debt paper and watch the video below to find out more about how much debt the Government really owes.

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