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Thedelldays
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Not defending Labours overspending in the past few years, but all industrialised nations are going to be screwed for about 10 years according to the FT.

Stop going off script.

Remember the mantra "Labour bad - Tory good, Labour bad - Tory good,....", repeat ad nauseum ( literally )

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tonights episode are just scratching the surface on the cuts we will see in the local areas

 

this is going to be bad..I fear labours legacy will be horrific

 

Is it Labours fault that there will be spending cuts in Spain, Italy, France, Ireland,Greece and countless other countries? Get a grip you´re beginning to sound like a broken record.I´m sure someone is pulling your strings because at the beginning of the election campaign you came across as quite naive and suddenly you sound like Conservative Party election broadcast.

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Is it Labours fault that there will be spending cuts in Spain, Italy, France, Ireland,Greece and countless other countries?

 

What's the debt of each of those countries as a percentage of their GDP? And how does that compare to the UK?

 

(genuine question)

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What's the debt of each of those countries as a percentage of their GDP? And how does that compare to the UK?

 

(genuine question)

 

 

Based on the 2009 CIA 'World Factbook', debt as percentage of GDP

 

Spain 50%

Italy 115.20%

France 79.70%

Ireland 63.70%

Greece 108.10%

 

UK 68.50% *

 

 

* Meaning that all of the following countries have a larger percentage debt vs GDP than the UK (based on the latest data): Canada, Portugal, Germany, Hungary, Israel, France, Iceland, Belgium, Greece, Italy, Singapore, Japan

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Based on the 2009 CIA 'World Factbook', debt as percentage of GDP

 

Spain 50%

Italy 115.20%

France 79.70%

Ireland 63.70%

Greece 108.10%

 

UK 68.50% *

 

 

* Meaning that all of the following countries have a larger percentage debt vs GDP than the UK (based on the latest data): Canada, Portugal, Germany, Hungary, Israel, France, Iceland, Belgium, Greece, Italy, Singapore, Japan

 

I read that US debt is at around 90% of GDP. The CIA wont publicise that. Furthermore, the US don't appear to be able to stop this increasing

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Based on the 2009 CIA 'World Factbook', debt as percentage of GDP

 

Spain 50%

Italy 115.20%

France 79.70%

Ireland 63.70%

Greece 108.10%

 

UK 68.50% *

 

 

* Meaning that all of the following countries have a larger percentage debt vs GDP than the UK (based on the latest data): Canada, Portugal, Germany, Hungary, Israel, France, Iceland, Belgium, Greece, Italy, Singapore, Japan

 

Hmm, but most of the £1.2 trillion UK public sector pensions deficit is not included in these numbers, which on their own are 85% of GDP. If you include them, we're bust!

 

 

The mainstream press is widely reporting that the public sector pensions deficit has now grown to £1.2 trillion, standing at 85% of GDP which is more than triple that of the United States as stated in a report by the British-North American Committee :

 

The Governments of the UK, US and Canada are understating significantly the true cost of their employees’ pension costs in terms of both the liabilities already incurred and the annual cost of running their public sector schemes. In the UK, where unfunded schemes predominate, public sector pension liabilities are £1,177 billion, about £20,000 for every person in the UK, equivalent to 85% of GDP, a percentage three times as high as in North America.

 

These findings are in a study The need for transparency in public sector pensions, published today by the influential British- North American Committee (BNAC)1. In the US and Canada, where the majority of public sector schemes are now funded (i.e. a ‘real’ fund is being built up to meet all or some of the cost of anticipated future pension liabilities), the position is somewhat better. In the US, whilst the net liabilities of public sector schemes are higher at around £2,700 billion2, this equates to ‘just’ 28% of GDP. In Canada, liabilities are under £250 billion, equating to around 27% of GDP.

 

 

 

So our position is going to look 'favourable' (stretching it a bit, I know) if you don't include all the liabilities.

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With all these countries in debt there must be one or two bloody rich countries out there.....

 

Can't the c.98% of countries in debt all join forces and say to the c.2% of countries in credit that we're all going to write-off our debts together and start again from scratch?

 

Sorted, surely?

 

What would happen then?

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With all these countries in debt there must be one or two bloody rich countries out there.....

 

Can't the c.98% of countries in debt all join forces and say to the c.2% of countries in credit that we're all going to write-off our debts together and start again from scratch?

 

Sorted, surely?

 

What would happen then?

 

I'm not sure there are any countries without a debt... I wish I knew how that works...

 

Even China owes 18.2% annual GDP...

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Hmm, but most of the £1.2 trillion UK public sector pensions deficit is not included in these numbers, which on their own are 85% of GDP. If you include them, we're bust!

 

So our position is going to look 'favourable' (stretching it a bit, I know) if you don't include all the liabilities.

 

I don't know how the CIA calculates the figures, but can't see them including pension liabilities for some countries, but not for others.

 

Somebody is going to have to shatter a few of the public sector retirement dreams. It won't be pretty to watch, but will be essential. Will it even be legal? Anyhow, Social Services has the biggest budget of any government office (at c. £120 billion pa, it is bigger than the NHS and MOD combined... as such, the axe should fall hardest upon welfare and pensions).

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The problem is bad enough now. The trouble is that at current rates we shall overtake all of them in a few years.

 

That depends how whether income exceeds outgoings. If we continue without cutting anything then you are correct. However, I don't recall any of the three parties arguing that we should put our fingers in our ears an defy the need for cuts.

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The figures dont include PFI which committed the British taxpayer to future spending of £215bn over the length of the contracts.

 

Our Pension provisions will be higher than other Country's as our Public sector pensions are gold plated.

 

George Osbourne is setting up an independent audit of last Govt's spending and I dread to think what that will look like. Like all Labour Govt's the last one ran out of money, our money, and it'll take a generation to sort it out.

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That depends how whether income exceeds outgoings. If we continue without cutting anything then you are correct. However, I don't recall any of the three parties arguing that we should put our fingers in our ears an defy the need for cuts.

From the cash flow p0int of view, at the moment it's something like £150,000,000,000 excess spending over receipts per year. Our interest payments at the moment are £43,000,000,000 per year. I don't think anybody has been proposing cuts of that order.

 

From the balance sheet, there are also the PFI liabilities that should be included.

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From the cash flow p0int of view, at the moment it's something like £150,000,000,000 excess spending over receipts per year. Our interest payments at the moment are £43,000,000,000 per year. I don't think anybody has been proposing cuts of that order.

 

From the balance sheet, there are also the PFI liabilities that should be included.

 

I thought PFI was 'off balance'? It certainly was at its inception in 1995.

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From the cash flow p0int of view, at the moment it's something like £150,000,000,000 excess spending over receipts per year. Our interest payments at the moment are £43,000,000,000 per year. I don't think anybody has been proposing cuts of that order.

 

From the balance sheet, there are also the PFI liabilities that should be included.

 

WG, I'm in full agreement with you that we need to cut more than is currently being discussed. Obviously we can't do this in the next few years, but we can't leave it too long. We need to reduce government spending, so that we can begin reducing our debt. I'm worried that the Government's solution to this is to artificially stimulate inflation, while keeping interest rates low - thereby erroding a large amount of the debt owed. I am a firm believer in living within your means, and though Blair and Brown were doing a superb job until 2000 when they both seemed to lose the plot and start spending stupid amounts. PFI was a ridculous idea, and should never have got through parliament (if only we'd had a hung parliament back then eh? Might have prevented the silly excesses).

 

Question is, where do you reduce government spending? The biggest spending departments are (all figures in Billions!):

 

£135.7 - Department for Works & Pensions (inc £62.7 State Pensions; £17.2 Housing Benefit; £16.2 Disability Benefit)

 

£109.5 - HM Treasury (inc £85.5 Bank bailouts, which will probably be largely recooped)

 

£109.4 - Dept of Health (inc £94.5 NHS; £13.4 NHS pensions)

 

£63.2 - Dept Children, Schools & Families (£42.8 Schools; £10.9 Teachers pensions)

 

£44.6 - MOD (£10 Army; £7.7 RAF; £7.3 Navy; £6.2 Equipment; £5.6 Pay & pensions)

 

£36.8 - Dept Commuities & Local Govt (£25.4 Local Govt; £7.3 Housing)

 

£34.1 - HMRC (£23.7 Tax Credits; £11.2 Child benefit)

 

£33 - Devolved Scotland (£11.5 Health)

 

£24.1 - Debt interest

 

£23 - Dept Innov Uni Skills

 

£16.3 - Devolved NI

 

£15 - Devolved Wales

 

£10 - Home Office

 

£9.7 - MoJ

 

£7.5 - Cabinet Office

 

£6.8 - Culture Media & Sport

 

£5.2 - International Development

 

£3 - DEFRA

 

£2.1 - Energy & Climate Change

 

£1.9 - Foreign & Commonwealth Office

 

£1.4 - NI Office

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you could lob a little off MoD pay and pensions..

 

pensions will come down in time as they changed the scheme in 2005..

 

some of the top brass get pensions and pay that is beyond belief

Yep the way they are given promotion a year or so before they leave is a disgrace. I see a lot of retired majors and colonels living a great life on big pensions
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Based on the 2009 CIA 'World Factbook', debt as percentage of GDP

 

Spain 50%

Italy 115.20%

France 79.70%

Ireland 63.70%

Greece 108.10%

 

UK 68.50% *

 

 

* Meaning that all of the following countries have a larger percentage debt vs GDP than the UK (based on the latest data): Canada, Portugal, Germany, Hungary, Israel, France, Iceland, Belgium, Greece, Italy, Singapore, Japan

How many of those are governed by socialists?
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Whitey Grandad is correct, we need to cut £150 billion. Trimming MoD pensions (£5.6 billion) isn't going to do it. I can't see how the cuts can be made without making radical changes to either Welfare or Health*

 

*NB, Health budgets ringfenced by Cameron.

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PFI was a ridculous idea, and should never have got through parliament (if only we'd had a hung parliament back then eh? Might have prevented the silly excesses).

 

 

Quite right but please don't lose sight of the fact that the last government didn't introduce the idea of PFI. OK they ran with it once elected in 1997 but it was actually implemented in about 1995 by the Major government.

 

I know this to be so because in 1993 I started to work on a (conventionally funded) hospital scheme. Half way through the design stage, we had to stop and then start again with a PFI partner. The process was halted in 1997, when parliament dissolved, and a moratorium was imposed by the Treasury until the new government was in place.

 

I was always against PFI as a matter of principle but I could see the advantages it delivered:

 

1)A plethora of new hospitals and schools etc.

 

2)Transference of risk to the private developer (because most PFI buildings are 'leased' for 25-30 years and then handed back to the developer who is then stuck with a bit of a white elephant. In 25-30 years' time, advances in medicine could mean that large hospitals will become largely irrelevant - think back to medicine in the 1970s and how we've advanced).

 

The bits I didn't like were the soft and hard maintenance contracts. We've all seen what's happened because, for example, hospital cleaning has been contracted out.

 

The other issue was the huge profit being made by the developer. At the design stage the developer had to fund the project at a high rate of interest (because of the risk). Once the building was up and running, the developer renegotiated the risk rate, saving substantial money. Initially this 'gain' wasn't shared with the NHS but it is now.

 

Here endeth the lesson :D

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I'm not sure there are any countries without a debt... I wish I knew how that works...

 

Even China owes 18.2% annual GDP...

So, if everyone owes everyone else why doesn't everyone say: "whoa there....enough is enough....right, everyone put down their toys...step away....deep breath...right....everyone's now on zero...start the world again....Ready, steady....GO". Hey presto, world debt wiped put at a stroke.

 

It's only a planet FFS

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So, if everyone owes everyone else why doesn't everyone say: "whoa there....enough is enough....right, everyone put down their toys...step away....deep breath...right....everyone's now on zero...start the world again....Ready, steady....GO". Hey presto, world debt wiped put at a stroke.

 

It's only a planet FFS

 

So all the little and large investors would lose their investments overnight?

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Yeah, but everyone in the world would then start again on the same square. Socialist heaven n'est pas?

 

With respect, you misunderstand Socialism. Understandable - we haven't seen it yet.

 

Socialists don't want everyone to be the same, as you well know. They just believe that if everyone is given every chance in life to be reasonably housed, well educated, and healthy then they have a resonable chance to develop to their full potentials.

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How many of those are governed by socialists?

 

Spain - Socialist

Italy - Conservative

France - Centre Right

Ireland - Centre Left

Greece - Socialist

Canada - Conservative

Portugal - Socialist (Centre Right President)

Germany - Centre Right

Hungary - Socialist

Israel - Centre Right

Iceland - Centre Right (2007-2009) Centre Left (post Iceland crisis)

Belgium - Liberal

Singapore - Conservative

Japan - Centre Right (2005-2009) Liberal (2009 onwards)

 

So I make that:

5 Left wing

8 Right wing

1 Liberal

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Whitey Grandad is correct, we need to cut £150 billion. Trimming MoD pensions (£5.6 billion) isn't going to do it. I can't see how the cuts can be made without making radical changes to either Welfare or Health*

 

*NB, Health budgets ringfenced by Cameron.

As a wise man once said, 'if I were you I wouldn't start from here'.

I don't pretend to have the answers, but if we carry on like this we shall be spending all our income on interest payments before very long. Inflation is the obvious answer, but that wipes out savings.

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Oops, I almost forgot. There's one other big target and that is Public Sector pensions. Enormous sums have been taken from the private sector and maybe it's time to make the Public Sector employees start to contribute something towards theirs.

 

They do - usually about 6%

 

HTH

 

Have a look at page 5 of this document - employee contribution rates vary between about 3% and 11%

 

http://www.tuc.org.uk/extras/publicsectorpensions.pdf

Edited by bridge too far
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The Public sector employees have to be brought in line with the Private sector. There are hardly any Final salary pensions in the private sector (cheers Gordon), the retirement age should be the same, and sickness/holidays should be brought into line as well.The days of generous pension provisions to compensate for lower wages in the public sector are over, we need a complete revolution where public sector workers are concerned. There are fantstic people dedicating their life to the public service, but there should not be two classes of employees in this Country.

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If you work in the public sector, you cannot receive your pension until you are 60 (if female) or 65 (if male). This is changing and the age at which you can receive your pension will increase. The exception to this is that nurses can retire earlier in recognition of the damage they inevitably suffer to their backs. Female nurses currently can receive their pensions at 55, I think.

 

A public sector employee can 'retire' at any age. But they won't receive any pension until they reach the pensionable age I referenced above. And their reckonable pension (which reflects years of service) will obviously be less.

 

If you read the link I've just posted, you'll see the myths about public sector pensions explained in some detail. It might be worth looking at it for your own edification.

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They do - usually about 6%

 

They do. My wife and I both pay 6.5% gross.

 

Are these contributions matched by the employer?

 

I've been urging my employer to up their contributions for several years now, to no joy. Still it gives me a lovely warm feeling that if I stay on my current salary for the next 35 years, I might just get to retire on £7-10k pa. I know of at least one local government employee whose salary is a bit less than mine, but whose pension is already estimated to be c. £20-25k pa. I just wish I could look forward to his retirement (but of course, that's an argument for increasing private pensions, not decreasing public ones).

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In the NHS, the 'employer' contributes 14%.

 

Again, I refer you to the link wherein it says that the average public sector pension is £7K pa but the majority of public sector pensioners receive £5K pa. Half of all women who receive NHS pensions get less than £3,500 pa.

 

My daughter, who works for a Housing Association (they operate in much the same way) has effectively taken a pay cut this year as her employer is not increasing salaries but her pension contribution % is rising.

 

I've worked with many people in the NHS who cannot afford to contribute to the pension scheme and who have contracted out.

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In the NHS, the 'employer' contributes 14%.

 

6% Employee + 14% Employer = 20% contribution. I'm not aware of many private employers who are willing to pay more than 5% (let alone more than 10%).

 

My private employer offers 4% employee + 4% employer. To get a pension as generous as yours I would need to increase my contribution from 4% to 16% of my wage... ouch.

 

Oh well, bang goes any chance of me getting a comfortable retirement, wonder if there are any public sector jobs going...

 

Again, I refer you to the link wherein it says that the average public sector pension is £7K pa but the majority of public sector pensioners receive £5K pa. Half of all women who receive NHS pensions get less than £3,500 pa.

 

Is that an average pension for all public sector workers or for an average pension for all full time public sector workers? Many people in the public sector work part time, and as such should only expect to receive a significantly reduced pension.

Edited by Joensuu
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6% Employee + 14% Employer = 20% contribution. I'm not aware of many private employers who are willing to pay more than 5% (let alone more than 10%).

 

My private employer offers 4% employee + 4% employer. To get a pension as generous as yours I would need to increase my contribution from 4% to 16% of my wage... ouch.

 

Oh well, bang goes any chance of me getting a comfortable retirement, wonder if there are any public sector jobs going...

 

 

 

Is that an average pension for all public sector workers or for an average pension for all full time public sector workers? Many people in the public sector work part time, and as such should only expect to receive a significantly reduced pension.

 

I guess there are two points.

 

Firstly, MOST public sector employees earn less than comparable private sector employees. Two examples don't prove a point but I can tell you that my daughter (again) earns about half of what she should could earn in the private sector as an IT project manager. I earned a lot less than my equivalents as a construction project manager.

 

I don't know how those 'average' figures are worked out - whether on all employees or on full-time only. As a rule of thumb, public sector pensions work on this formula:

1/80th final salary x years of service. The average NHS wage is around £16K so if you earned the average wage and worked for 20 years, your pension would be about £4K pa. However, new employees' pensions are based on average rather than final salaries. Obviously, if you worked part-time, your reckonable wage would be lower.

 

Perhaps an argument should be held with private sector employers about how they could help their employees more. After all, their directors get huge, non-contributory pensions. At least the public sector scheme, for all its faults, treats people on an equal basis.

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I should have added that public sector employees, like private sector employees, can make Addititional Voluntary Contributions to boost their pension. I think, but don't know for sure, that these are used to buy an addition to the pension pot (not matched by the employer).

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I should have added that public sector employees, like private sector employees, can make Addititional Voluntary Contributions to boost their pension. I think, but don't know for sure, that these are used to buy an addition to the pension pot (not matched by the employer).

 

Correct. Both my wife and I have AVCs.

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I guess there are two points.

 

Firstly, MOST public sector employees earn less than comparable private sector employees. Two examples don't prove a point but I can tell you that my daughter (again) earns about half of what she should could earn in the private sector as an IT project manager. I earned a lot less than my equivalents as a construction project manager.

 

Not according to the 2009 'Annual Survey of Hours and Earnings' published by the Office of National Statistics. This shows the average wages of public verses private sector to be:

 

Full Time Private: £24,970

Full Time Public: £27,686

Part Time Private: £7,645

Part Time Public: £10,550

 

Having worked as a contractor in various public departments, I have learnt that broadly speaking colleagues working at a similar level to me, get either a similar wage, or perhaps a little bit more than I do. They do, however, have 50% more annual leave, and approximately 3x the pension.

 

 

Perhaps an argument should be held with private sector employers about how they could help their employees more. After all, their directors get huge, non-contributory pensions. At least the public sector scheme, for all its faults, treats people on an equal basis.

Agreed. That is usually the angle I take. The ideal outcome would be for the private sector to improve the pensions it offers. Unfortuantely, 15 years ago many companies realised that their pension schemes were unsustainable, and acted swiftly to protect their future. There is no way the private sector will return to large pensions - they simply can't afford it.

 

Like it or not, the public sector is paying an exeptionally large contribution towards it's employees pensions. At the same time the public sector is spending vastly more than its income, and there is concensus across all the parties that significant cuts will need to be made. Pensions must surely be high on the list to be trimmed. And unfortuately, until the field is levelled, there will be growing resent (justifiably) coming from the private sector.

Edited by Joensuu
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Joe

 

Please read this link fully: http://www.tuc.org.uk/extras/publicsectorpensions.pdf

 

It argues the case against the commonly held views about public sector pensions far more succinctly than I ever could!

 

The whole question of public sector pensions started to be addressed some time ago (as this document shows).

 

The document also explains very well how, to a great extent, public sector pensions are funded by members' current contributions rather than from another public purse. It suggests that, to change to a system similar to private pension schemes, would require a significantly high input from government to pay for these contributions which would no longer be forthcoming. I'm no accountant so I can't think through the argument very well.

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