CrunchTimes

The Policy Exchange says most people are aware that Britain has a huge national debt which is growing during the current fiscal crisis. But what many people do not know is that we have a second national debt – one that is kept out of government figures and hidden from view. This is the public sector pension debt, which has grown as successive governments have continued to promise public sector workers defined benefit pensions, often worth two thirds of final salary, index-linked for life. It is now equivalent to 78% of GDP (£1.1trillion) with the cost of servicing the debt each year to pay for these unfunded schemes now at £45.2 billion.

There were 5.8 million working age benefit claimants at February 2009. This is an increase of 628,000 (13%) in the year.

UK base rate fell to a 315 year low when the official bank rate was reduced to 0.5% on 5th March 2009.

There were 5,055 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the second quarter of 2009 (on a seasonally adjusted basis). This was an increase of 2.9% on the previous quarter and an increase of 39.1% on the same period a year ago. In the twelve months ending Q2 2009, approximately 1 in 120 active companies (or 0.8%) went into liquidation. Additionally, there were 1,529 other corporate insolvencies in the second quarter of 2009 (not seasonally adjusted) comprising 345 receiverships, 1,027 administrations and 157 company voluntary arrangements. In total these represented an increase of 22.7% on the same period a year ago.

In August 2009 the public sector net debt (PSND) increased to £804.8bn, equivalent to 57.5% of gross domestic product and equivalent to ~ £32,192 per household. PSND has increased £172bn in 12 months (equivalent to £5,454 per second). The interest paid on this debt by the Government in April to August was £11.2bn which is equivalent to ~ £1,075 per household / annum.

According to the UK 2009 Budget report the public sector net debt (PSND), including unrealised losses from financial sector interventions, increases over the period to 2013-14 to £1,446bn (equivalent to £57,840 per household) and then stabilises at around 79% of GDP.

Real GDP in the UK economy during 2009 Q2 declined by 0.7% which means that Britain has officially been in recession for 15 months. GDP is now 5.5 per cent lower than the second quarter of 2008.

The number of unemployed people in the three months to July 2009 was 2.47 million (7.9%), up 210,000 (2,301 a day) from the previous three months and up 743,000 over the year. This is the highest figure in 14.5 years since April 1995. 246,000 people (2,696 a day) reported they had become redundant in the three months down 55,000 from the previous three months and up 107,000 from a year earlier.