Pre-Budget Report

Of course it is. However, I want to move on from ascribing blame to establishing how we should deal with it. To do that, we must take stock of where we are with the public finances. What is very striking from the numbers is that the profile of public borrowing on which the Government are embarking is almost identical to that of the early 1990s. I guess that both the Conservatives and Labour are embarrassed about that and do not want to draw too much attention to it. In 1992-93 and the following year, public borrowing amounted to 7.7 per cent. of GDP, and the current Government are planning 8 per cent. and 7 per cent., which is almost identical. The problem for the Government is that, for several reasons, this is almost certainly too optimistic. Their growth forecasts are optimistic, and they are assuming massive efficiency gains that no one in Government believes in, and, crucially, they are assuming severe control of public expenditure for the foreseeable future: 1.4 per cent. annual growth in public spending. If anybody believes that, they should look at a reference, buried away on page 210 of the PBR, to public sector pension costs. I am talking about not public sector pension liabilities, which is a big issue, but actual cash spending, which is, of course, a non-discretionary item—the Government cannot do anything about it unless they legislate. The reference shows an increase in public sector pensions from £1.2 billion in 2006-07 to £3 billion this year and £4 billion next year, but three years ago the Government were estimating it at only £600 million. That is completely out of control, and it will squeeze other key elements in public service delivery. Lord Oakeshott, my colleague in the other place, raised this in the Lords yesterday, and our colleagues in the Lords moved a motion recently to try to set up a public service pensions commission based on Lord Turner's recommendation that this difficult issue should be properly examined. We could not understand why not only the Government but the Conservatives voted against the proposition. They want to keep this in the long grass, but it is a crucial issue that must be addressed.