Fund is crucial

In his excellent review of Shetland’s sensible use of its oil wealth to build a £210 million trust fund (18 August), Gavin McCrone advocates such a fund for the whole UK should “probably still be considered when circumstances get easier”, despite necessitating higher taxes and/or reduced public expenditure.

While I would replace his “probably” with “definitely”, it is unlikely his proviso will ever occur, at least in our politicians’ minds. Such a fund should have been set up in the apparent boom years from 1992 to 2007, as in Norway.

What he and other policy makers have ignored are two other areas where we have kept tax levels artificially low, for taxpayers’ benefit but at the expense of our children and grandchildren.

Nye Bevan was happy to boast that the great thing about our national insurance “fund” is that there is no fund; ie, our contributions have paid for ongoing government expenditure rather than into a fund for the purpose of paying the benefits that most taxpayers thought they were contributing to. So our liability of £1.5 trillion or more for state pension commitments is entirely unfunded.

In addition, the pension contributions made in good faith by many public sector employees have likewise been raided, while their numbers and remuneration have greatly increased, leading to their schemes’ massive unfunded liabilities of £1.1 trillion.

Terrifying figures indeed, on top of our official national debt growing to £1.5 trillion by 2015. This is not just borrowing from the next generations; it is theft.

Business Secretary Vince Cable and others who point out that the UK population does not yet realise the scale of our challenges are quite right, but do they have the nerve to tell us?

John Birkett

Horseleys Park

St Andrews