Don't mention it!

Election time looms and once again our intelligence is insulted by the level of debate from the three main parties. Everyone is talking about trifling differences in spending plans; when to remove the fiscal stimulus, when to increase interest rates etc. This completely ignores the elephant in the room.

Official statistics state that Government debt at the end of 2008 was £848bn. This is a hefty number; approximately 60% of GDP and its much higher than it was 13 years ago when New Labour inherited the stewardship of the country.

What’s not included in this figure is any provision for future pension obligations, which are to the surprise of many, funded from annual revenues and not from some ‘ring-fenced’ pension pot. The deficit is estimated to be in excess of £500bn and this figure will only rise as the balance between tax-payers and pensioners shift to the detriment of the Exchequer’s coffers.

To not include any provision for future pension figures is at best naive; at worst downright deceptive. It’s a deception that is perpetrated by all of the main political parties, for a very simple reason: long-term planning will not win any election, especially where this requires fiscal prudence.

Calculation of our national debt must include provision for future liabilities. In this way, the government should be forced to use accounting rules applicable to companies. It’s only when the true extent of our position is known by the public and proposals for long-term planning can be reviewed that we will be able to make informed decisions about which party offers the best course for our country.

Maybe if we can bring this issue out into the open we can have a debate about whether we want to extend the current plans into the future. It could be that we decide that our debts are out of control under the current regime and we need to change course. This could include something as radical, at least in today’s political arena, as curtailing rights to pensions and healthcare for all.

This debate cannot happen unless the powers-that-be change the way they report on debt, or at the very least acknowledge the truth. The decision made in 2006 not to change the basis for reporting debt would indicate that political will to remain in power trumps the will to run the country in the best interests of its population.

Without meaningful change we remain on course for the inevitable debt and currency crisis. Do the politicians really care? Or are they happy to kick the can down the street, hoping that someone else will clear up?