Wednesday, May 06, 2009

None of the options are good

The scale of the debt that Gordon Brown is taking on to fight the economic crisis in Britain means that future governments will have to consider drastic measures to ease it.

The National Institute for Economic and Social Research says it would be almost impossible for the Government to return Britain's total public debt to 40 per cent of gross domestic product, currently equivalent to £600billion, until 2023.

The institute claims the Government have three options to bring the balance sheet back to good health.

The first is to raise the state pension age, from 60 for women and 65 for men, to 70 between 2013 and 2023.

Under existing plans, the state pension age is due to increase to 68 for both men and women between 2024 and 2046. The rise will generate additional tax revenues and reduce pension payment obligations.

The second option was to raise the basic rate of income tax by 15p in the pound. The NIESR say that taxes would have to rise by as much as 8p in the pound even if the retirement age was increased.

The final option was to cut government spending by a tenth, which would hit the NHS, education and other front-line services.

Thinking of my own situation: it wasn't uncommon to find yourself teaching alongside ex pupils. However, under these proposals, you could be teaching alongside your grandchildren. Now that is scary.

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