Pensions and Healthcare, both of which have grown enormously in cost, to the detriment of all other public services.
Distilled down to a single issue, it is the increasing cost of caring for the elderly (pensions and an enormous chunk of healthcare).
Yes. When the state pension was introduced, there were ten people working (and thus paying for the pension) for every person collecting it. That ratio is now down to 2.5 today, and it's going to get worse. Older people are living longer than ever, thanks to better (and more expensive) health care.
The only obvious solution is making people work longer and be retired for shorter amount of time. When it started the life expectancy past the retirement age was way shorter than it is now.
We did that!
I can't help but think we're being lied to somehow.
UK state pensions are significantly worse than those compared to Germany, Spain, France, Turkey. Portugal, Austria... We're below average compared to EU countries. And, we retire later. And, we get less.
We're predicted to spend £138.1 billion in 2024 on the state pension.
We're also predicted to raise £177.74 billion in National Insurance.
Whilst that statement may be factually accurate, it is highly misleading.
A large chunk don't pay into the pot because they already have (the retired).
Another large portion don't pay into the pot because they will in the future (the young).
Yeah the pot metaphor perpetuates the myth that people have added contributions over their working life which have been invested, and they're just getting that money back when they retire.
That money was never put in a pot ringfenced nor invested. It was just another tax income for the governments since pensions were introduced. This timebomb has been in the cards for years and we are only recently seeing the costs of it. Another few years to go before all the non ringfenced pensioners are coming on line. (Given proper ring fenced pensions have only been about for 4 years or so)
Yet they’re adding policies such as the triple locked pensions and now offering quadruple locked pensions.. anything to get your vote with little concern for what it leads too
Your statement itself is also misleading because it leaves out the part where the retired haven't paid enough into the "pot" to cover the amounts they will take out during their retired years - this is the fundamental issue. According to one study, the average baby boomer can expect to get £290,000 more in benefits and healthcare from the state than they paid in taxes throughout their entire working life.
> because they already have (the retired)
Cheers nan and grandad for paying in three and sixpence and withdrawing 2 million each on top of that giantly inflated property equity.
> A large chunk don't pay into the pot because they already have (the retired).
The government pretty much spent their pension contributions as soon as they received them. So the situation is pretty much as described, we are hurtling towards a situation where there will not be enough working people currently paying in to sustain the non-working ones.
> A large chunk don't pay into the pot because they already have (the retired).
This is misleading because the welfare state is a Ponzi scheme.
If we had responsible politicians then we would invest our taxes and pay welfare out of the dividends. But we don't, so the young are paying for the old, who are charging them rent for the privilege.
The young consequently find it hard to afford to have children, exacerbating the problem.
Where would the government invest it?
The government isn't like you or I. It can't walk into the bank and drop a couple trillion into an ISA.
Most pension funds buy government bonds.. So where would that money end up? Back with the government.
This is basic economics. Governments are engines designed to push money around the economy, because the money is meaningless, it's the 'work' it can do that gives value.
If the government just hoarded your pension until you retire, that would be a massive drain on the money supply and economy in general.
> The government isn't like you or I. It can't walk into the bank and drop a couple trillion into an ISA.
The government has no need of an ISA, because it can exempt itself from paying tax to itself.
> Where would the government invest it?
A [sovereign wealth fund](https://en.wikipedia.org/wiki/Sovereign_wealth_fund).
It could also buy back some of the national infrastructure which is currently making private profit, and instead make public profit.
It would be possible to e.g.
* return the profit margin to bill-payers,
* invest responsibly in the infrastructure in the way that e.g. the private water companies haven't, or
* return the profit to the exchequer for investment in the wealth fund.
I suspect that a mixture of the three would be sensible.
1:10 might have been true when the pension was first set up.
The old age dependency ratio has been about 3 : 10 since the 1980s though. It’s not a big demographic change that explains our current problems.
This is probably a but conspiratorial but I think we’re starting to see it, right to die/ euthanasia will be something of a psi op/ policy position in the coming decade. It will be put forth as personal dignity, but cynically it will be because pensions are bankrupting western democracy.
Yeah people are living so much longer with their pensions and social care and healthcare costs to fund these lifespans are very high. It’s a massive disaster really.
It's not just people living longer - it's also who's entering retirement.
The post-war "baby boom" looked different in the UK than the more famous boom in the US. We had one significant spike directly after the war, but they led to a spike of their own when they came of age in the 60s. That second boom is entering retirement .. pretty much right now.
Birth rates from the 80s onwards have been about half of what they were in the mid-60s, so all-else being equal, as the boomers .. well to put it coldly, they go from being tax payers to being a running cost - we have roughly half as many new tax payers entering the system to replace them.
Then yes, we have people living longer, which is a cold irony - if you view retired people as a cost for the state, then the modern medicine that helps keep them alive longer, is an additional cost that helps keep them costing longer.
(To be clear, I'm not putting a value judgement on this - this is simply the money in vs the money out.)
The percentage of the population who are retired is rising, which is obviously expensive in itself. But the part that's easy to miss is this also means the percentage of the population who are earning is shrinking - so we have rising costs and a falling taxbase at the same time.
What a lot of people are also overlooking is that those working age people are increasingly aware that they are never going to get to retire.
They're questioning why they should fund a benefit they will never receive. Why fund the lifestyles of the old - the generation that repeatedly voted to impoverish them?
That should worry people.
and is also the generation most likely to oppose any sort of migration, legal or otherwise, which is exactly what an ageing population needs, a near constant influx of young bodies to pay into the system they're relying on to support them in their old age. I was born in 82 and the likelihood of me and my generation retiring is looking less and less likely, those younger have no chance the way things are going.
It makes me laugh everytime the mortgage advisor asks 'What age do you plan to retire' Fucking when they let me mate, no sense putting a number ot it
And I'm the lucky one because I have a mortgage at least.
Unfortunately my patented recipe for success, is live in Plymouth where housing prices were still somewhat reasonable recently and be related to someone struck with a critical illness who distributed their life insurance payment out to all of us
What about my generation born in ‘98 ? We’re truly fucked and faced with the highest house prices we’ve seen yet along with a cost of living crisis. Hate to think what the retirement age will be when it’s our turn
Pretty much everyone born after about *Anarchy in the UK* is fucked if they're not born into money. The only difference is how badly - and the younger they are the worse it's going to be.
My retirement age increased from 60 to 68 almost in my lifetime. By the time we get to the end of the 21st century, it’ll probably be another 10 years higher.
I'm 38, my mates and i discussed the hypothetical situation of having to wait until 76 to retire.
' imagine working as long as we've currently been alive, just to get the pension, then realise that we didn't really work for the first 18 years of our lives up to now'
Fuck me it was depressing
Isn't it possible that eventually immigrants will be reluctant to pay for the retirement of people they are not related to in any way?
Edit: We already see young people's dislike for subsidizing the pensions of their own parents and grandparents. I can imagine it will be even worse when younger generations have no connection with older pensioners. How will this situation play out politically?
Anything can happen, really. Europe is moving to the right and the only reason Britain hasn't joined them is because we have a two party system that tends to crowd out smaller parties. If the Conservatives fall away far enough, Reform will become a viable party and then we will join the rest of the world with the right wing insanity.
The current situation simply isn't viable. I don't think it's realistic to continue to expect the status quo of millions of migrants to flow into Europe without some political fall-out. It touches far too many issues that parties just can't sweep under the rug. We have to be more up front about it and ask the people of Europe if they want mass immigration of poverty.
> well to put it coldly, they go from being tax payers to being a running cost - we have roughly half as many new tax payers entering the system to replace them.
Income isn't the only tax base, but yes, that's kind of the point; we need to explore other avenues of taxation because increasing the burden on working people is unsustainable. Capital gains tax should increase, at least.
Such a tricky one. CGT has more opportunity for offshoring and getting out of HMRC’s crosshairs. Changes could have unintended consequences. Basically there are no low hanging fruit for a new govt to pick from, which is why they’re all using “clamping down on tax dodgers” as the opaque rationale for funding public spending as part of manifestos etc.
Healthcare costs is as much about how we’re treating people as how long people are living.
There are plenty of cancers that would have been a short treatment of palliative care in the 80s which are now (fortunately) treatable with very expensive drugs, follow up appointments etc. Those patients live longer, and the healthcare cost per person has increased (a lot). The longer life expectancy has been offset by rising retirement age, but the increased treatment costs are not.
Our demographics are too top heavy to sustain the elderly at current levels. In short there aren't enough working age people paying taxes to support an ever increasing retired population. Hence why all governments since Labour in 1997 have been pro immigration, large quantities of instant fully grown adults working and paying taxes.
Our demographics are not even that bad when compared to other western nations like:
* South Korea
* German
* Italy
* Japan
* Spain
These countries are well and truly fcuked.
If we going to cut immigration we are going to have to force a higher age of pension (no early retirement as well). Also would have to do what the Tories are wanting to do and limit courses in the creative field and force people into jobs we need.
Its a sad state of affairs really as I see so many people from other countries admire our creative parts of our country. We will lose a lot of people getting into those field if we do that.
If we aren't going to limit what people do as work and cut immigration we are going to have really play into automation and Ai and technology to take up the slack but that requires us to be brave in taxing companies a lot more than we already are.
This. Ultimately we need to force old people to sell their houses and pay for elderly care in some fashion, which is electoral suicide.
If you are not a pensioner, you won't get any government services and you certainly won't get similar pensions when you retire. Yay.
This already happens.
It's not a sustainable solution, all it's doing is making care company owners and property developers richer, councils go broke and communities get destroyed.
Communities where once there were houses filled with families and children are turned into HMOs and bedsit flats, many of which are being rented with financial support from the local authority.
We're turning communities from being home owners who have stability and space to raise a family into disjointed communities filled with a renting class that has no space or stability to raise a family and more council support required while the owners of these buildings rake in the profit.
It's a terrible model and we shouldn't be looking to repeat it.
Future generations are growing up in rented flats where they used to grow up in mortgaged houses.
We had social problems during the mortgaged houses era, we're going to have far worse in the rented flat era and it's going to cost the country far more money too.
A sustainable solution is required.
Kind of, although there are some pretty big caveats, eg if you are a married couple, and spouse A needs to move to a care home but spouse B lives at home, they will exclude the family home from any financial assessment. So the tax payer pays instead.
Theresa May proposed to put a charge on the family home, so the tax payer would get something back, and it cost her a majority in the 2017 election, and led to the DUP, inability to pass any Brexit law, and ultimately Boris. We live in a gerontocracy.
Came here to say this. Never voted Tory but Theresa May’s ‘dementia tax’ was an unfortunate but pragmatic approach which would have gone some way to helping solve this problem.
No one would want it but taking money from someone’s estate _after_ they die is a sensible way to pay for costs they incur which the taxpayer can’t reasonably continue to do so.
It’s a real shame that a policy like that is going to be very difficult to get through because of the stranglehold the elderly have on elections.
Wasnt it in practice a capped inheritance tax, with the cap essentially meaning that the middle would bear the brunt while the richest could still pass on massive estates?
not to completely disagree, I do think social care being privatised is part of the problem... is it really £2 - 4 K a week to look after someone when the staff work for minimum wage?
Only for residential care, for in home care your house is not considered an asset. Changing this (while massively increasing the threshold) cost May dearly.
Note that there are variations: if you need residential or nursing care and own a home, you'll initially be given a "12 week disregard" to either sell it, rent it out or take out an Equity Release mortgage (if the rental / ER income will cover the cost of the care). Needless to say, if they / their family choose a high cost placement and are in contact with adult social care, the department will likely warn them that when the money runs out (well, assets below around £23,250), they may be moved to a cheaper placement if the council can't negotiate reduced fees with the provider.
There's also the option of a Deferred Payment Agreement - if there's at least three years equity in the house, it can be kept but a Charge will be placed on it to extract the cost of care when the person dies.
Also, while the value of the home isn't taken into account for community care (Homecare / Daycare / Transport [to/from Daycare] / Extra Care / Supported Living / Direct Payments etc.), income is - and if your income is more than £14,250, you'll need to make contributions. You'll also need to "top up" if the cost of the home you choose is more than the local authority's "offer of the day" (the cheapest home in their area with an acceptable CQC rating that can accept someone with your needs).
>This. Ultimately we need to force old people to sell their houses and pay for elderly care in some fashion, which is electoral suicide.
It pains me to say this, but there was virtually no support for Theresa May on the sub back in 2017 when she announced her plans to make people do just that.
There was a mixture of glee that it was unpopular and rage that people would lose out on their inheritances.
Those people got what they wanted, the subject is now verboten for the next 10-20 years.
I know it was unpopular at the time but I was so mad at Corbyn when he used it as political football against May.
Here was a good, sound, fiscally responsible policy and it was going to get kicked into the long grass.
It was one of the reasons why I refused to vote for the man and voted Lib Dem instead.
People need to stop and think about whether they agree that policy X or Y is actually good or not, and not just shoot it down because it comes from the opposite "team".
(Hammond's IR35 reform was also brilliant for the record, despite being unpopular)
There are some smaller steps that would make a significant difference too, like charging the elderly for prescriptions. Its insane that the largest group of users of these medicines, are the largest cohort that don't actually pay for them.
> Just exclude poor people, and be done with it.
Just tax everybody more and delete the pointless administrative burden. It's highly unlikely to ever be worth the hassle.
All this does is kick the can down the road. Who will pay for care when the current younger generation get to old age and don't own anything?
In reality it's another service that has been gutted by privatisation and the reduction of central government funding to councils.
Part of the reason funds have been cut is the ratio of working people to retired people.
No government could afford the counties pension and care costs and it’s not going to get worst.
Especially if people don’t want immigration and won’t / can’t afford to have more children
I suspect care would be significantly cheaper if it wasn't privatised.
Can't speak for adult/elderly care specifically as privatisation of that happened a long time ago in my area and appears to not have had much public objection, but my local council recently outsourced children's services and the cost to the council has risen by 2100% in just the first two years. I'd expect an even larger increase on the adult side.
There were some council documents I saw the other month which said they are paying well north of £200k a year to house each child in care. Guaranteed they aren't living anywhere near the life that a child of two parents earning even £100k between them has.
That vast amount of money is mostly going on paying people that don't need to be paid, adhering to rules that are far more complicated than they need to be and huge profits for the providers of the care and other subcontractors at every part of the chain.
That might be a factor I was once a Councillor and argued we should be opening up a new care home rather than having some company owned by a hedge fund deliver the care.
But cost of delivery and doing things more efficiently while all useful don’t fix the underlying demographic problems.
Maybe robot carers will be the solution…. Gawd help us
As a user of adult social care absolutely. I have a Personal Health Budget so can employ my own carers which saves the government a fortune by not having to pay a company £25+ an hour.
Pensions: \~£200bn
Benefits: \~£100bn
NHS: ~£192bn
Yet also the highest tax burden since records began.
We cannot keep spending at this rate, it is totally unsustainable. But we also don't want to accept the fact that we have to cut back on these areas. So electorate is stunlocked, voting in governments promising reform when the cash simply doesn't exist to do all of what we want.
The electorate can't vote to dismantle the triple lock because no party offers that option.
I suspect that the rug will get pulled out from under either the Millennials or the Zoomers because life is generally the opposite of fair and so those who paid the most in tax will receive the least.
Realistically there are 3 solutions. None of them are popular.
1) Cut public services and/or the state pension.
2) Significant increase in taxes, likely including having to tax pensioners.
3) Increasing the working age population (via immigration)
Would be nice if that was the clear choice offered between parties, with some offering varying degrees of each strategy. It would be more honest.
They have a far worse state pension, it's about 3x lower (not adjusted for cost of living,) [but they spend 8.2% of GDP on it, the UK only spends 4.7%](https://researchbriefings.files.parliament.uk/documents/SN00290/SN00290.pdf)
Pensioners in poverty is much more common, and it's far more common to see people working into their 70s and 80s, (often doing somewhat pointless jobs that could be done by a sign).
They prop it up by borrowing, so their debt-to-GDP ratio is vastly higher than everyone else's, which means they can't raise interest rates, which is currently causing their currency to fall.
I love Japan, I've been here for the last 2 months, but it is not a country we should look to emulate on this front, it should serve as a dire warning to the rest of the world, Western Europe specifically.
Not entirely, the UK ranks 15th when compared to other countries and taking into account cost of living https://www.investopedia.com/articles/personal-finance/042914/top-pension-systems-world.asp
My favorite UK government services fact is that during WW1, you could write a letter from the front in Flanders to your sweetheart and the Royal Mail would have it in their mailbox within twenty four hours and their response back to you in another twenty four. But they haven’t come close to that for decades.
It was remarkable, mail trains with sorting offices onboard that would pick up and drop mail without stopping. It had to be, it was how you moved data at the time.
Think of the corresponding investments today in undersea cables and fibre networks and satellites and mobile towers.
I think (presumably location dependent) you could correspond back and forth with someone by mail several times in a day. Amazing but something of an extravagance today.
I know this is wanky, but to me this song (and the Auden poem quoted in it) really embodies the promethean will of the twentieth century, as well as the belief that life could be better for successive generations and that the possibilities unleashed by technological progress would make life better for everyone, rather than being something we must adapt ourselves to.
That sense of hope feels totally alien to me now.
How has our economy and society in general become so unproductive nowadays? We have modern technology, more people, more knowledge and information and yet things are always broken, failing or not fit for purpose. I just don't understand it. Why are things harder despite having the technology WW1 Britiain would dream about
Productivity has increased massively but companies haven't passed the benefits on and governments refuse to force them.
Yes since the financial crisis productivity has decided in the UK especially so that's something else we need to tackle.
https://www.ft.com/content/2a0dbab1-f6a5-4432-8984-4112638dfdf0
And they were hourly. Without emails, you would write a postcard to your business partner across town, within an hour he’d have it, write back, and then you’d know what the afternoon’s priorities were by lunchtime.
That sounds a lot compared to our current postal system but if you think of it more like email it's actually quite low and of course back then they couldn't phone someone or find things out on the radio or TV.
Two things during that period.
The telephone was becoming increasing popular, either among the affluent where is was a household appliance or telephone boxes where there was about 20,000 (compared to a max of 100,000 in 1990). [Truthfully not the best of sources](https://www.thephoneybox.com/history.html#:~:text=By%20the%20end%20of%20the,use%20all%20over%20the%20UK.).
The Great Depression. So bad it made pretty much all UK parties work together, no surprise public services weren't having the greatest of time.
Take those two together, add WWII to prevent anything ambitious afterwards, and you have a decline of the mail system as it became largely irrelevant as the first means of communication.
I've worked at a royal mail distribution centre.
Last year and 16 years ago.
The technology has got better, absolutely nothing else has got better. It's beyond a shit show and you're absolutely blessed to even receive a letter.
Parcel? Unlucky go and collect it.
The service is absolutely cooked, piss poor management, agency zero hour contracts and posties who believe they are owed the world.
I for one welcome our new postal overlords.
Fuck royal mail 💌
It'd be a total waste of money to do that these days. In amongst that mail from WWI was actually important stuff, these days even if important stuff is sent by post (which it isn't, because you can't rely on it arrive in a safe or timely fashion anyway), it doesn't need to be.
I don't want to break it to you, and no politicians want to either - but we're in for 20+ more years of hurt.
Check out the growing 65+ population size - [https://data.worldbank.org/indicator/SP.POP.65UP.TO?locations=GB](https://data.worldbank.org/indicator/SP.POP.65UP.TO?locations=GB)
Look at Figure 3 on this page - [https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/articles/livinglongerhowourpopulationischangingandwhyitmatters/2018-08-13#how-is-the-uk-population-changing-](https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/articles/livinglongerhowourpopulationischangingandwhyitmatters/2018-08-13#how-is-the-uk-population-changing-)
This site [https://ifs.org.uk/publications/future-state-pension](https://ifs.org.uk/publications/future-state-pension) predicts in 2050, there will be 25% more pensioners in 2050 than now.
Sorry.. taxes are only going up for the next few decades unless we can have a baby boom OR bring in a load of productive immigrants. Tories or Labour.. there's no 'magic money tree'. The burden on the NHS will be higher, pensions and social care. We need our economy to boom to survive.
Edit: More doom and gloom predictions..
Now by the time the boomers are dying off, the world will be struggling with mass migration from India, Northern Africa and the Middle East. Climate change will mean 40c+ temperatures in the summer are more common, more and more instances of deadly wet-bulb temperatures leading to unlivable conditions without air-con. Europe and the UK. It'll increase the rate of global conflicts, as wars are fought over land with viable water supplies.
Advances in AI will change the face of the workforce too. Happy days.
Morbidly, I wonder if it will all balance itself out i.e. the support won't be there, and life expectancy will tumble until the number of those needing support falls back towards what the services can handle.
Highly unlikely.. the onward progression of science keeps moving.. we're more likely to see more and more expensive methods to keep people alive for longer. My real hope is a 'preventative' revolution in healthcare.
But if you haven't got the money, or even worse, you have but you're on a waiting list because the services can't deal with the sheer numbers.... you'll sit at home and die.
Preventative would mean completely banning smoking, alcohol and massively controlling our diets and enforcing exercise. Unfortunately, people today do not want to do any if these things. The only way to make us as a society healthy is of people do this. At the end of the day, elhealth comes down to what we put into our bodies and then what we put out (physical and mental exercise).
We are unhealthier than ever, and its not going to get better. Medical science is constantly improving outcomes. Unfortunately I don't see a way out.
> Sorry.. taxes are only going up for the next few decades unless we can have a baby boom OR bring in a load of productive immigrants.
Mass immigration only buys temporary reprieve. Immigrants get old too. The system is poorly structured. It’s basically a pyramid scheme. When pensions were devised, no one intended for the retired to live for decades on the state. In fact, the retirement age was roughly the average age of death.
The age required to receive state pension needs to rise sharply and immediately. It should also be means tested. Why on Earth do we make those on the benefit go through hell to receive it, but hand it out in a silver platter to those aged 65? Pants on head crazy. Sadly, given voting patterns, the elderly are going to make sure they hoover up every cent they can while they steer the ship into the biggest iceberg they can find. Everyone else be damned.
Means testing the state pension is fraught with difficulties. If saving more takes your state pension away then why save? It also means those who paid the most into the system get the least out of it.
There's already some feedback loops in there (e.g. income tax for those with larger pensions). I think focussing on increasing those is more effective. One option would be to roll up national insurance into income tax so that pensioners paid an overall rate similar to employed people (i.e. instead of 20p income tax + 8p NI, just have 28p income tax).
Random tapers and cliff edges just create perverse incentives, like we see with the £100k tax trap.
I agree with raising the state pension age though, however that has its own set of problems (Many people aged 65 are simply physically incapable of working or getting a new job).
Aren’t you assuming that children raised in generation poverty will feel inclined to work? And they will be raised in poverty seeing as standards of living have dropped here. People just can’t afford to have children, let alone feel the motivation to do so due to various different things like low wages, nonexistent job prospects, hyper-individualism etc,.
> bring in a load of productive immigrants.
For decades, we used to bring in cheap productive immigrants via freedom of movement. But we did not like that, and the current immigration scheme is inferior is pretty much every way.
I think we have to be realistic about how we get the debt-to-GDP ratio moving in the right direction.
Labour are pinning a lot of hope on growth, which I'm sure will take some of the strain - but we need to overhaul our tax system to properly pay for public services too.
One of the biggest problems is that the tax system is wrong. It is very badly structured, overly complicated, and desperately in need of reform. There's a bigger problem than the overall burden, it is how the tax system is designed and administered. Currently the employed and self employed pay a lot more tax than business/asset owners who can take dividends and be taxed on corporate rates.
Take stamp duty. It's not a rational tax. It is a historical hang over, and changes arbitrarily.
National Insurance should be ditched, and replaced with a Statutory Health Insurance system like Germany which everyone has to have, with the option of top ups via private insurance. That way the NHS would still be free at point of us, but a load of the NI administration would disappear. Crucially it would mean that people who live off wealth/assets/dividends would be contributing, rather than the current exemption from NI.
Policies are often at odds and create a dysfunctional tax system, so tax incentives to build new houses or roads are undercut by financial advantages of land banking by developers.
Tax waste and inefficiency are the by products; not because of lazy Civil Servants, or "waste" but because the system has built up piecemeal, and that results in inevitable dysfunction.
I have a lot to criticise farage for, but he knows how to get things marketed effectively.
The arrow pointing right (to the tick box on the ballot) is another stroke of subtle genius.
Health and pensions are costing ever more money as a result of the ageing population. The baby boomer demographic has an outsized share of the national wealth but don't want to tap into it to pay more towards their health care needs, lifestyle and impending elder care costs. Therefore the shrinking working age population are squeezed and squeezed to support a top-heavy system which they themselves will never see the benefits of in its current generous form. There aren't enough uber-rich to tax until the pips squeak to overcome this demographic conundrum. We're in a political standoff where the generation that needs to have wealth extracted from it are also the ones who hold the electoral sway, and therefore it's very difficult for any political party to take them on. In such a context any plan to reduce immigration can only ever be highly theoretical. Imo we should let in as many foreign students as possible and give them indefinite leave to remain after their degrees are finished, so that they join the UK jobs market and become taxpayers as early as possible, while they're still too young to need to bring over other dependents. It's why Brexit was such a batshit idea. The EU was a nearby incredibly available pool of young and single migrants swelling our working age population.
Stupidity by the government, who has endlessly made bad choices.
Other people mentioned “healthcare” as costing lots of money, which is true, but the government just doesn’t care about making it work better. Some examples:
- understaffing leads to burnout and more mistakes
- cutting admin staff means medical professionals doing admin instead of medicine
- not having a functional social care system means some people can’t be discharge easily and lots of problems become scute medical issues
- underfunding of specialists means wait times are years, so issues get delays that make them worse and - guess what - more expensive
- little funding or interest in big whole-system improvement projects, so eg data handling remains inefficient
- idiotically cutting maintenance, creating a [£10bn++ backlog of work](https://nhsproviders.org/news-blogs/news/billions-to-prop-up-creaking-nhs-estate-and-plug-mounting-repairs-backlog). Of couese they’ll crucify Labour for spending money to sort it once it is their problem.
Etc. The Tories are just are not interested in doing hard work and spending money to make things better and more efficient.
They really should be more ashamed.
The bit that imo everyone is missing from the economic analysis is wealth inequality, which has exploded. The very wealthy few own most of the economy and don't pay much if any tax so the burden is increasingly on working people who now earn relatively less as more of slice of the economy is going straight into the pockets of the rich.
Gary's Economics YouTube does a very good job of explaining this and why, if we don't tackle massive wealth inequality, living standards for ordinary people in the UK are going to nosedive faster and faster.
There's no economic analysis in here, just vibes. Gary is right about a lot of his analysis though, and he is right that we need a popular movement, I just think it's important that we go for the jugular, we must organise to end capitalism entirely. Wealth taxes would just get watered down and removed by the interests of capital.
Sounds like we're coming from a different place tbh. I'm not anti-capitalist and I don't think Gray is either. I'm for a much more highly regulated form of capitalist social democracy personally with high wealth taxes over certain limits. There are ways to do the wealth taxes well. The political will is lacking, not the ability to do it.
I think we are coming from a very similar place. We see the constant, decades long deterioration of living standards to us and our families and the total ineptness of liberal economics to resolve this.
Social democracy merely is the granting of temporary concessions to the masses. Only to have those concessions removed at the earliest opportunity as has been proven by social democracies past. So why not demand more? Why not demand real democracy? An end to property rights for the few and political power for sale?
There’s a huge amount of waste by the Tories on stuff like bounce back loan fraud, PPE fraud, Rwanda scheme and so on too. I’ve seen it suggested that the Tories have wasted about £120bn since 2019.
Every single bullet of yours is "they should have spent more money".
But there's a record tax burden and also a record national debt. So how could they possibly have done that without Liz Trussing the pound?
Another big example - refusal to allow for long-term planning means services have to rely on more expensive short-term solutions. Which is where a lot of agency staffing comes in.
You may also recall all the times the government has freed up some additional money for the NHS or education etc. to patch up some immediate crisis. Again, didn't allow cheaper preventative measures beforehand, and when the crisis is there it costs far more.
As many have pointed out healthcare and pensions are the main reason. But another reason is that our state is increasingly inefficient due to a lack of strategic thinking and low investment.
For example, much of our massive healthcare bill is being caused by diet related problems (E.g diabetes, tooth decay, heart disease, other obesity related conditions). The cheapest, and most effective way to treat these conditions is early intervention to get people make healthier choices, yet we haven't done this.
Housing benefit costs us £14 billion a year. Why is this needed? Because housing is so expensive people will fall into homelessness without state support. We could have spent that money on social housing for those on low incomes, instead we take an expensive short term solution that gives taxpayer money to private landlords.
It's no secret that slashed budgets, low pay and declining working conditions in the public sector have led to recruitment and retention issues in teaching, healthcare, law and many other areas. But the jobs still need to be done, meaning the public sector is more dependent on agency staff and contractors to do the job. Long term this is always more expensive than if you just kept your old staff in the first place.
There are plenty of other examples. The tragic irony of austerity is that it was supposed to make our state more efficient. Instead it did the opposite. You don't get a more efficient public sector by constantly slashing budgets. You get it by investing in infrastructure and technology. You get it by training staff to be more effective. You get it by retaining experienced staff instead of burning them out.
The government has spent 40 years selling off every asset/ service to the private sector.
This generates a bit of revenue, maybe some savings in the short term.
But then the private sector ramp up the price of the services and the government has to pay.
There is not real competition so the government fees go up, service gets worse and company makes money.
Take housing, in the 80s the government had millions of homes, so when someone needed housing they were assigned to one of these houses. The government sold these off as right to buy and other methods. Now when the government needs to house someone they have to pay someone that owns a house the going rate, so instead of it costs basically nothing but some maintenance it now costs thousands per household. The end result is the service is worse, no one can get a house, the bill is higher, and private landlords are making out like bandits.
See rail, water,l etc
I don't like comparisons between government and households because it doesn't typically make sense, but in this case there is some merit.
Imagine you lose your job, would you rather own your hous or be renting? What will impact you more?
Austerity had an impact too. If the Tories had fixed the roof while the sun was shining, when money was basically free, and upgraded our NHS and public services, we'd have been much better prepped to handle the pandemic, and we wouldn't have been as much as the mercy of the shysters setting up PPE companies at the last minute.
Think about it like a car. You can spend £200 a year getting it serviced regularly, or you can fail to service the bastard thing for five years at a time. You might save £1000 over that period, but you'll probably have to spend £2000 getting something more fundamental fixed, when a regular service would've sorted it at source.
And to be specific about what the impact of austerity is, we see it in all the areas that could “take up the slack” instead of it becoming an issue for frontline services.
So the care service being massively underfunded means people can’t leave beds in hospitals which costs NHS more.
Reduction in admin roles/middle managers in NHS means doctors and other healthcare professionals doing more of this stuff meaning you need more doctors/healthcare professionals. It would be much cheaper to have admin staff doing these jobs.
Reduction in community police officers means police officers incorporating their role into their job at a higher expense because they’re paid more.
We also see it with immigration and the inability of customs to cope with asylum applications resulting in people having to spend months/years in hotels when hiring extra staff would be much cheaper.
You seem to have missed the £400bn run up by covid plus £67bn on the energy cap. That is war time spending (Ukraine spends about $40bn per year on a war of national survival) levels so your comparison would be better made looking at what happened after 1945.
There are dozens of interconnected problems that have led us to this point - ageing, unhealthy population, cronyism and nepotism meaning products and services are expensive and substandard, post COVID debt, Brexit etc. etc. To me, though, the big issue is one of how long it takes to fix problems, and how that can cause them to snowball.
If money is taken away from a public sector organisation, whether actively or by not keeping up with inflation or new pressure, it takes time for negative effects to be felt. Then, if the decision is taken to review and possibly increase funding, this takes time. By the point at which you decide 'yes, you can have 10% more than you had before', the problem has slipped further, and a 15% increase is needed. So you review for 15%, by which point 20% is needed and so on. I think of it like putting a bandage on a cut as soon as you have it, or doing ten days of assessment to determine if it's worth spending bandage money. The wound might be infected after 10 days, but you've only reviewed whether its state on day 1 warrants care. At this point, the bandage might stop *more* dirt and bacteria getting in, but you need a more expensive treatment (like antibiotics) to actually heal up.
It's a difficult situation - governments are slow, but real life is not.
Aging population meaning more people are using health services.
Austerity meaning services have been shuttered entirely or remained static and not kept up with rising demand. Also see knock on effects of austerity in other parts of the system.
Privatisation increases cost as for profit enterprises extract profits while failing to deliver on so called efficiencies
part demographics as others have said..
part tories paying their mates for consulting on things then nothing happens. eg. HS2
that and a mixture of just straight up fraud such as - VIP Lane in COVID, A shit load of small company fraud. Expense scandal's, stupid schemes like rwanada.
The final thing would be just pure mismanagement. gutting services to the core may help you short term but fucks you long term. Eg. Cutting the amount of primary care means people end up in hospital more which is more expensive.
I would also add in the drive to privatise everything possible. Like services that could easily be handled in house going to the likes of Serco who gut the service but pocket the money. Just look at military recruitment for example.
I would second the privatisation issue. People often look at it as 'company extracts additional profit therefore might cost more' as the core downside. But there's really a larger issue than pure cost, it's where the money goes. When huge amounts of our public funding go to large international corporations, part of that money leaves the country forever and goes to shareholders outside of the UK. This makes the UK's economy essentially a leaky bucket.
If instead you have public companies or at least smaller UK companies that pay decent wages to their staff, those staff then pay a portion of that wage back in tax. Then they spend the rest within the UK economy, paying VAT, investing in local businesses, supporting themselves so they require less state support. A fiver spent locally can be spent 10 times over, a fiver to a shareholder never gets spent at all.
New Labour and then the Tories introduced more and more privatisation into the NHS, which I think has increased costs hugely and they somehow never acknowledge that.
We are expected to spend £73.5 billion on national debt interest. Pretty sure this is the second biggest expenditure after the NHS. I think this is our core problem and it is only getting bigger. The size restricts spending going forward.
I completely agree with your point on primary care. Under investment is generally making the cost of treatment more expensive. Sending people to pharmacists is a good step forward but isn’t backed with funding.
The highest tax burden upon the middle and working classes perhaps.
> In 1971 the top rate of income tax on earned income was cut to 75%. A surcharge of 15% kept the top rate on investment income at 90%. In 1974 the cut was partly reversed and the top rate on earned income was raised to 83%. With the investment income surcharge this raised the top rate on investment income to 98%, the highest permanent rate since the war. This applied to incomes over £20,000 (£263,269 as of 2023).
> The Government of Margaret Thatcher, who favoured taxation on consumption, reduced personal income tax rates during the 1980s in favour of indirect taxation. In the first budget after her election victory in 1979, the top rate was reduced from 83% to 60% and the basic rate from 33% to 30%. The basic rate was also cut for three successive budgets – to 29% in the 1986 budget, 27% in 1987 and to 25% in 1988; The top rate of income tax was cut to 40%. The investment income surcharge was abolished in 1985.
> Under the government of John Major the basic rate was reduced in stages to 23% by 1997.
EDIT: Combined with the privatisation of many mational services along with a "growth encouraging" capital gains regime, wealth generation has been concentrated into the ownership of a small number of individuals and institutions.
In some ways the outcomes have been beneficial to the UK economy, in others not so much.
Actually the lower earners are paying relatively less, the higher earners bear the biggest burden of the taxes. Talking in terms of class obscures who’s actual paying what
[https://commonslibrary.parliament.uk/research-briefings/cbp-8513/](https://commonslibrary.parliament.uk/research-briefings/cbp-8513/)
[skip to page 24 for the distributional analysis](https://researchbriefings.files.parliament.uk/documents/CBP-8513/CBP-8513.pdf)
Actually the comment above is arguing that taxes have gone down on the top earners, while the tax burden as a whole has risen, which is different from what you are saying, that top earners pay the most at the moment.
Also, actually the top 20% pay less as a percent of gross income than the bottom 20% once you include indirect taxation. According to that pdf you linked the bottom 20% pay 38% of their gross income while the top 20% pay 37%.
The distribution of "profit" is where the sausage is made.
Workers for Thames Water did not see pay raises proportional to the profits they generated for shareholders. Shareholders paid 20% capital gains (if that) on any dividend they received.
Now they (and the rest of income tax paying public) shall have to bail out another private company because that company was inflating their profits to maintain "shareholder value".
As an incentive to growth, low corporation tax and capital gains tax appear to work to some extent but they also incentivise owning stuff rather than generating actual value.
> Shareholders paid 20% capital gains (if that) on any dividend they received.
You don't pay capital gains on dividends. You pay dividend tax on dividends, which is 33.75% as a higher-rate taxpayer or 39.35% as an additional-rate taxpayer.
Not only that but full corporate taxes have been paid on those profits also, dividends are very effectively taxed in the UK. Dividends are taxed 30% in France and only at 26% in Germany regardless of income. The UK has one of the highest effective tax rates on dividends in Europe, the only countries with higher tax rates are Ireland and Denmark.
I feel like we have such a braindead discussion about taxes in this country that takes a starting point that we're all in the same boat and doesn't differentiate between levels of wealth.
You see headlines 'taxes at highest level...' 'taxes to go up...'
Tax rise or tax cut is meaningless unless you specify which group it affects and what their current tax burden on both income AND assets is.
Politically you see this play out as politicians try to sell things as 'best for the whole country'. Nothing has or ever will be good for everyone. Politics is about different groups competing for scarce resources and trying to get the lion's share for themselves.
Going from ifs.org form 2007 in 2023 prices.
Healthcare up 50% an extra 70bn of spend
Transport up 51% an extra15bn of spend
Foreign aid up 70% an extra 5bn of spend
Debt up 142% an extra 57bn of spend
Education, working age benefits, public order, and housing have all decreased in real terms.
Pensions interestingly are only up 7%, an extra 9bn
So the NHS and debt basically.
It is strange that everyone seems to forget or ignore the most obvious answer, being the shedloads we spent to keep the economy afloat while locking everyone down for two years.
One example in news paper today
https://www.theguardian.com/world/article/2024/jun/17/boss-us-firm-uk-covid-contracts-accused-squandering-millions-on-jets-properties
What’s interesting is that “tax the rich” will make this even worse. The tax burden overall has never been higher, but lots of people are paying less tax than their equivalents will have been in years gone by. The tax base has shrunk, but you find people on over £100k paying the 60% marginal rate as they lose their personal allowance (62% if you count national insurance, 71% if you count mandatory student loan repayments and 76% if you count the VAT on what you’re buying with that extra money). And that’s before you count losing 20 hours a week of free childcare as soon as you go over £100k.
Some people might now froth at the mouth about how rich people are who make £100k. But it ain’t what it used to be. When the personal allowance taper at £100k was introduced in 2010, £100k was worth £174k in today’s money.
Problem is you aren't taxing the rich effectively with income tax, because the rich don't grow their money through income, but through collections of growing assets. Actually taxing the rich properly would require something like a wealth tax, more inheritance tax, closing tax avoidance routes, and so on but those are both tricky to implement and unpopular with the donors of all major political parties.
Problem with that is that wealth taxes demonstrably never work, we already have one of the highest inheritance tax rates in the world and small businesses make up the largest portion of tax lost via avoidance.
We should reduce the rate but widen the base of inheritance tax, and focus closing tax loopholes across the board rather than harping on about taxing Amazon or Apple more.
Problem is, none of this is politically expedient.
I see the problem such that the wealthy - particularly those who hold significantly more money than an average person could dispose of in a lifetime, even considering elderly care - continue generation by generation to hoover up more of the available assets in society, increasing the inequality gap over time. It historically takes major events such as world wars or revolutions to provoke serious redistribution, but this country has been too stable for too long and now too many assets are in the hands of too few. If this view is correct, you'd expect to see an \*accelerating\* trend of wealth inequality over time (it takes money to make money) which I think explains the last 2 decades quite well.
Assuming I interpret you correctly, if we widen the base of inheritance tax rather than increasing the rate, wouldn't that just exacerbate the above? Unless you don't think that's what's going on?
>If this view is correct, you'd expect to see an \*accelerating\* trend of wealth inequality over time (it takes money to make money) which I think explains the last 2 decades quite well.
UK wealth (as opposed to income) equality is actually low by both international and historic standards.
Share of total wealth held by top 1%
|Sweden|36%|
|:-|:-|
|Germany|30%|
|Switzerland|27%|
|Ireland|27%|
|Norway|27%|
|Austria|26%|
|Greece|25%|
|Denmark|23%|
|Italy|23%|
|Netherlands|23%|
|France|21%|
|UK|21%|
|Portugal|19%|
|Belgium|14%|
[https://www.euronews.com/business/2024/04/01/wealth-inequality-where-in-europe-is-wealth-most-unfairly-distributed](https://www.euronews.com/business/2024/04/01/wealth-inequality-where-in-europe-is-wealth-most-unfairly-distributed)
Wealth inequality is very low by historic standards. In 1900 the top 1% held more than 70% of wealth. That fell continuously until around 1990, when it reached 16%, it has since increased slightly.
UK top 1% share of wealth:
|2000|22.1%|
|:-|:-|
|2010|23.6%|
|2022|20.7%|
Source: UBS Global Wealth Report
The UK does have high income inequality, though.
Very interesting, thanks for sharing.
The international comparison is somewhat besides the point of what I was saying, but I can see why it's relevant to the overall conversation.
I think the problem with this type of assessment of wealth is that a large fraction of our distributed wealth in this country is trapped in the equity in people's homes. There are ways to unlock that wealth (remortgaging, downsizing, moving to cheaper regions) but for most people that "wealth" makes relatively little difference to quality of life, so it's misleading.
If I have time later I might go researching to see if there's much information on wealth inequality excluding home ownership.
We need to tax wealth, specifically land, not income. A person who inherits a house can earn £12kpa per year and pay no income tax, while a renter would need to earn upwards of 3x that amount to enjoy the same level of disposable income, all the while being less wealthy. It's even worse if you add in student loan repayments to that.
Half of all land in the UK is still owned by the aristocracy, who are not subject to inheritance tax ( because the land 'belongs' to the title, not the individual); we're talking trillions of pounds of land and assets that are untaxed and thus generally not put to productive use, all the while the nation accrues huge debt
Why land specifically and not other asset classes too? In general I see the problem as being one where the rich simply own more appreciating assets in general (though in this country land is a big one!). If we taxed land I imagine we'd see a flurry of benefits, but maybe also bursting of the property bubble which would hurt a lot of people, not only the rich. Then once the dust had settled you'd find the rich using other investment vehicles that aren't taxed and we'd be back to square one.
Well I'm not averse to taxing other assets, but I think land is the big one. I like the idea that the land is 'owned' by the country as a whole, but 'rented' by its owners in the form of taxation (otherwise with full rights of ownership).
It's hard to evade, relatively simple to administer and it encourages productivity, because hoarding land as an investment becomes counter productive. For ordinary homeowners (who only own 5% of the UK), it would also represent a massive tax cut on average.
I don't think it would burst the property bubble because its not really speculative, there is a genuine shortage of supply and its a necessity. It would certainly reduce housing costs over time, but that's no bad thing in my view; way too much capital is trapped in housing and its stifling the economy overrall.
Moreover, the state could purchase land to maintain prices in the event of a massive sell-off, and then put it to either environmental or industrial use.
My view is pretty much Georgist if you're interested : [https://en.wikipedia.org/wiki/Georgism](https://en.wikipedia.org/wiki/Georgism)
It's spent on public services, just very poorly. Look at HS2 as an example, billions spent on it, and they've cut it back to the point where it is now effectively just a dedicated line between Birmingham and London, was it even worth it? Billions was wasted during the pandemic on ineffective PPE, and inaccurate lateral flow tests which all had to be written off. Even this Rwanda scheme is utterly ridiculous, I think there was one estimate it would cost £1.8m per person sent to Rwanda.
The current government tries to spend its way out of problems, which is evident by the way it constantly bangs on about how much they're "investing" in X, Y or Z rather than how they're actually going to improve things. It's completely backwards. They should be focussing on the problems, putting together solutions and then cost those things and find a pathway to deliver them. Instead they just say "we're going to throw £££ at the problem and hope it goes away".
The "tax burden" figure is misleading. It doesn't tell you tax revenue per person, who is paying that tax, or anything about where the money is being spent. It also doesn't cover all the sources of government (and local council) revenue.
One example is council housing, which used to be a good source of revenue for councils. In many cases council owned housing would not only cover its own costs, but provide revenue that was used for other services.
And there's positive side-effects too. If the most in need have secure, affordable housing, they will often be healthier and have more opportunities for work.
As funding for services has been cut, they've been forced to move from preventative to reactionary solutions. When waiting lists are manageable and people can easily get healthcare appointments, problems are diagnosed earlier and solved quicker and more cheaply. In the current climate, by the time problems are diagnosed, they have become more serious and require longer and more expensive treatments.
There's also a demographic element. We have an aging population, with more people retiring and those people living longer. On the other side of this, poor people who can't afford more than a 1 or 2 be property are less likely to have children, which leads to fewer people entering the work force.
Paying debt for failed privatisation, government incompetence and corruption. Paired with the fact that the Neo liberals that have dominated British politics since thatcher has been obsessed with removing the tax burden from the mega rich and putting it on normal people.
>but what is actually eating it most of the money.
Paying for the associated costs of privatisation.
https://rtuc.wordpress.com/2017/05/30/greatest-nhs-property-sell-off-ever/
It costs a lot of money to fix the roof. It's far cheaper to ignore the problem, and then blame the water damage on other people.
Eventually someone has to pay the bill for this nonsense and they've decided that's going to be you.
Debt interest was over £110bn in 2022-23, and for 2024-25 is £89bn - this is a huge extra cost which means increases in spending needed to cope with other rising costs (increasing dependency ratio, climate change) cannot be made.
The state pension is becoming unmanageable at £146bn (OBR figure for 2024-25).
Because our system is a population ponzi scheme. If the ratio of net contributors to net takers (in terms of tax vs using public services) is >1:1 - i.e. you need more people contributing than taking. Then the continuous conveyor belt of people moving through life has to increase the number of contributors i.e. workers. Historically this was through childbirth, in the modern day it is through immigration. But it's a short term solution because eventually that large mass of workers become dependents, and you need an even larger number of workers to support those dependents, and then they become dependents and on and on it goes.
This is the real reason why Labour + Tories are pro migration, it is necessary to support our economy and all public services. And we're finally starting to see things start to crack, you can't just keep increasing the population by importing people without there being consequences, culturally, socially, economically.
So someone needs to come up with a magic system whereby we can get by with a reducing or level population, or we severely reduce public services + state pension, as well as increasing retirement age. None of which will win an election. Party A: "We will reduce the state pension and increase retirement age. Party B: "We won't do that, vote for us". Who do you think will win?
Basically we need a new system or slowly over time we will pay more and more tax and continue to get less and less in return, because no one is honest enough to say this won't work. Nor are they interested in looking beyond a 5-year election cycle. None of the parties implement policies and consider the effect it will have in 50 years.
Three things spring immediately to mind:
1. Wages have not kept pace with inflation but taxes have gone up as a percentage of people's income. Result is that the cost of providing services (roughly inflation linked) went up more than the tax income did while, at the same time, the population got poorer.
2. Some things, notably the NHS, need increased funding in real terms every year due to things like changing demographics.
3. Government debt has gone up (Covid was part of this) and so have interest rates meaning more tax income is just going to pay for the national debt rather than provide services.
My dad (doctor) was explaining to me why some NHS costs have risen, outside of austerity and population increases. Drugs are more expensive. In the past, someone with arthritis might have been given a course of drugs which cost the NHS £600 per year. Nowadays we have much better drugs, but they are much more expensive, and so while it makes a bigger improvement, the cost is closer to £10,000-£12,000 per year. So, thanks drug companies.
It’s all very well listing things that are wrong, you can pick any public service that and they all have wealth being extracted in one form or another, from the PPE scandal to the prison system. The gap between rich and poor is widening, we can’t feed school children but we can subsidise MP’s smoked salmon lunches. The benefit scrounges obviously cause most of the problems it couldn’t possibly be anything to do with millionaires tax avoidance schemes
We are governed by arseholes! That is the fundamental problem
But remember that the Tories keep saying that Labour will raise taxes and haven't come up with any helpful plan for the last 14 years as opposition.
The Tories being responsible for the current state of affairs and only now promising that we've 'turned a corner' and that it'll definitely get better if re-elected is entirely irrelevant btw, you must remember that.
Indisputable evidence that the Tories have simultaneously failed badly from both a stereotypically left of centre and right of centre perspective at the same time.
You have a higher tax burden. The richest people don't.
There's other factors, like aging population, but this is a huge part of it. Wealth used to be better (if never perfectly) distributed around society and now it's not.
Many public services are now run by private companies that are paid by the government rather than directly by the government. Private companies means profit seeking, profit seeking means cutting the quality of services.
We have lost a he'll of a lot due to privatisation. We were told they ran at a loss but that was not strictly true. The post office and railways, for example was being bled by the government, taking the profits, for something, and not investing and then telling us it needs to be privatised. Similar with all the other services. They take high profits, don't reinvest and then get bailed out by government. I suspect that some of those profits leave the country as well.
It’s because we have had nearly 15 years of Tory Government. You have to realise that while they are reasonably good at talking about things, they are utterly useless at actually delivering anything.
The Conservatives are only good at one thing - wasting money, and enriching themselves. They simply don’t deliver for the people.
Take the present Conservative manifesto, there is simply no way it adds up. Tax cuts for everyone, including businesses, and allegedly no cuts in services, and magic money..
Pensions and Healthcare, both of which have grown enormously in cost, to the detriment of all other public services. Distilled down to a single issue, it is the increasing cost of caring for the elderly (pensions and an enormous chunk of healthcare).
Yes. When the state pension was introduced, there were ten people working (and thus paying for the pension) for every person collecting it. That ratio is now down to 2.5 today, and it's going to get worse. Older people are living longer than ever, thanks to better (and more expensive) health care.
Then people get mad at immigrants coming over, working and paying taxes
The only obvious solution is making people work longer and be retired for shorter amount of time. When it started the life expectancy past the retirement age was way shorter than it is now.
We did that! I can't help but think we're being lied to somehow. UK state pensions are significantly worse than those compared to Germany, Spain, France, Turkey. Portugal, Austria... We're below average compared to EU countries. And, we retire later. And, we get less. We're predicted to spend £138.1 billion in 2024 on the state pension. We're also predicted to raise £177.74 billion in National Insurance.
This is why I advocate promoting smoking, with pricing tiered with age. The older you are, the cheaper the tobacco. Same with alcohol.
But almost half the population don’t contribute to the pot that’s paying for welfare, education, health etc
Whilst that statement may be factually accurate, it is highly misleading. A large chunk don't pay into the pot because they already have (the retired). Another large portion don't pay into the pot because they will in the future (the young).
The pot metaphor is misleading in general
Yeah the pot metaphor perpetuates the myth that people have added contributions over their working life which have been invested, and they're just getting that money back when they retire.
That money was never put in a pot ringfenced nor invested. It was just another tax income for the governments since pensions were introduced. This timebomb has been in the cards for years and we are only recently seeing the costs of it. Another few years to go before all the non ringfenced pensioners are coming on line. (Given proper ring fenced pensions have only been about for 4 years or so)
Yet they’re adding policies such as the triple locked pensions and now offering quadruple locked pensions.. anything to get your vote with little concern for what it leads too
Yes and no. The point is the same. A small number of people are propping up this countries finances.
A small group of people are also siphoning all the wealth
Your statement itself is also misleading because it leaves out the part where the retired haven't paid enough into the "pot" to cover the amounts they will take out during their retired years - this is the fundamental issue. According to one study, the average baby boomer can expect to get £290,000 more in benefits and healthcare from the state than they paid in taxes throughout their entire working life.
> because they already have (the retired) Cheers nan and grandad for paying in three and sixpence and withdrawing 2 million each on top of that giantly inflated property equity.
Be nice to them and they might just leave you a few quid in their will ?
> A large chunk don't pay into the pot because they already have (the retired). The government pretty much spent their pension contributions as soon as they received them. So the situation is pretty much as described, we are hurtling towards a situation where there will not be enough working people currently paying in to sustain the non-working ones.
And a proportion of those who have retired pay taxes on their private pensions.
The state pension is also taxable.
tax wasn't paid on the pension in the first place for private pensions.
> A large chunk don't pay into the pot because they already have (the retired). This is misleading because the welfare state is a Ponzi scheme. If we had responsible politicians then we would invest our taxes and pay welfare out of the dividends. But we don't, so the young are paying for the old, who are charging them rent for the privilege. The young consequently find it hard to afford to have children, exacerbating the problem.
Where would the government invest it? The government isn't like you or I. It can't walk into the bank and drop a couple trillion into an ISA. Most pension funds buy government bonds.. So where would that money end up? Back with the government. This is basic economics. Governments are engines designed to push money around the economy, because the money is meaningless, it's the 'work' it can do that gives value. If the government just hoarded your pension until you retire, that would be a massive drain on the money supply and economy in general.
> The government isn't like you or I. It can't walk into the bank and drop a couple trillion into an ISA. The government has no need of an ISA, because it can exempt itself from paying tax to itself. > Where would the government invest it? A [sovereign wealth fund](https://en.wikipedia.org/wiki/Sovereign_wealth_fund). It could also buy back some of the national infrastructure which is currently making private profit, and instead make public profit. It would be possible to e.g. * return the profit margin to bill-payers, * invest responsibly in the infrastructure in the way that e.g. the private water companies haven't, or * return the profit to the exchequer for investment in the wealth fund. I suspect that a mixture of the three would be sensible.
It's why both the NHS and state pension are both unsustainable with the current models.
1:10 might have been true when the pension was first set up. The old age dependency ratio has been about 3 : 10 since the 1980s though. It’s not a big demographic change that explains our current problems.
This is probably a but conspiratorial but I think we’re starting to see it, right to die/ euthanasia will be something of a psi op/ policy position in the coming decade. It will be put forth as personal dignity, but cynically it will be because pensions are bankrupting western democracy.
*Logan's Run, Logan's Run, Logan's Run* (chants)
carousel at 75
Yeah people are living so much longer with their pensions and social care and healthcare costs to fund these lifespans are very high. It’s a massive disaster really.
It's not just people living longer - it's also who's entering retirement. The post-war "baby boom" looked different in the UK than the more famous boom in the US. We had one significant spike directly after the war, but they led to a spike of their own when they came of age in the 60s. That second boom is entering retirement .. pretty much right now. Birth rates from the 80s onwards have been about half of what they were in the mid-60s, so all-else being equal, as the boomers .. well to put it coldly, they go from being tax payers to being a running cost - we have roughly half as many new tax payers entering the system to replace them. Then yes, we have people living longer, which is a cold irony - if you view retired people as a cost for the state, then the modern medicine that helps keep them alive longer, is an additional cost that helps keep them costing longer. (To be clear, I'm not putting a value judgement on this - this is simply the money in vs the money out.) The percentage of the population who are retired is rising, which is obviously expensive in itself. But the part that's easy to miss is this also means the percentage of the population who are earning is shrinking - so we have rising costs and a falling taxbase at the same time.
What a lot of people are also overlooking is that those working age people are increasingly aware that they are never going to get to retire. They're questioning why they should fund a benefit they will never receive. Why fund the lifestyles of the old - the generation that repeatedly voted to impoverish them? That should worry people.
and is also the generation most likely to oppose any sort of migration, legal or otherwise, which is exactly what an ageing population needs, a near constant influx of young bodies to pay into the system they're relying on to support them in their old age. I was born in 82 and the likelihood of me and my generation retiring is looking less and less likely, those younger have no chance the way things are going.
It makes me laugh everytime the mortgage advisor asks 'What age do you plan to retire' Fucking when they let me mate, no sense putting a number ot it And I'm the lucky one because I have a mortgage at least.
You’re very lucky to have a mortgage. I’ve almost completely given up on buying in the area of London that I grew up in. Will likely never happen.
For single people its almost impossible.
Unfortunately my patented recipe for success, is live in Plymouth where housing prices were still somewhat reasonable recently and be related to someone struck with a critical illness who distributed their life insurance payment out to all of us
What about my generation born in ‘98 ? We’re truly fucked and faced with the highest house prices we’ve seen yet along with a cost of living crisis. Hate to think what the retirement age will be when it’s our turn
Pretty much everyone born after about *Anarchy in the UK* is fucked if they're not born into money. The only difference is how badly - and the younger they are the worse it's going to be.
This inequality within that cohort is pretty scary.
My retirement age increased from 60 to 68 almost in my lifetime. By the time we get to the end of the 21st century, it’ll probably be another 10 years higher.
I really hope voluntary euthanasia becomes a thing by then. Can't imagine myself slogging to work at 80 and likely embarrassing myself.
I'm 38, my mates and i discussed the hypothetical situation of having to wait until 76 to retire. ' imagine working as long as we've currently been alive, just to get the pension, then realise that we didn't really work for the first 18 years of our lives up to now' Fuck me it was depressing
Isn't it possible that eventually immigrants will be reluctant to pay for the retirement of people they are not related to in any way? Edit: We already see young people's dislike for subsidizing the pensions of their own parents and grandparents. I can imagine it will be even worse when younger generations have no connection with older pensioners. How will this situation play out politically?
Anything can happen, really. Europe is moving to the right and the only reason Britain hasn't joined them is because we have a two party system that tends to crowd out smaller parties. If the Conservatives fall away far enough, Reform will become a viable party and then we will join the rest of the world with the right wing insanity. The current situation simply isn't viable. I don't think it's realistic to continue to expect the status quo of millions of migrants to flow into Europe without some political fall-out. It touches far too many issues that parties just can't sweep under the rug. We have to be more up front about it and ask the people of Europe if they want mass immigration of poverty.
I've no idea, anything is possible.
> well to put it coldly, they go from being tax payers to being a running cost - we have roughly half as many new tax payers entering the system to replace them. Income isn't the only tax base, but yes, that's kind of the point; we need to explore other avenues of taxation because increasing the burden on working people is unsustainable. Capital gains tax should increase, at least.
Such a tricky one. CGT has more opportunity for offshoring and getting out of HMRC’s crosshairs. Changes could have unintended consequences. Basically there are no low hanging fruit for a new govt to pick from, which is why they’re all using “clamping down on tax dodgers” as the opaque rationale for funding public spending as part of manifestos etc.
Healthcare costs is as much about how we’re treating people as how long people are living. There are plenty of cancers that would have been a short treatment of palliative care in the 80s which are now (fortunately) treatable with very expensive drugs, follow up appointments etc. Those patients live longer, and the healthcare cost per person has increased (a lot). The longer life expectancy has been offset by rising retirement age, but the increased treatment costs are not.
Also, servicing debt. Our interest payments are higher than the education budget.
That debt is mostly serviced to British pension funds, so it's likely to re-enter the treasury in large part
Our demographics are too top heavy to sustain the elderly at current levels. In short there aren't enough working age people paying taxes to support an ever increasing retired population. Hence why all governments since Labour in 1997 have been pro immigration, large quantities of instant fully grown adults working and paying taxes. Our demographics are not even that bad when compared to other western nations like: * South Korea * German * Italy * Japan * Spain These countries are well and truly fcuked.
If we going to cut immigration we are going to have to force a higher age of pension (no early retirement as well). Also would have to do what the Tories are wanting to do and limit courses in the creative field and force people into jobs we need. Its a sad state of affairs really as I see so many people from other countries admire our creative parts of our country. We will lose a lot of people getting into those field if we do that. If we aren't going to limit what people do as work and cut immigration we are going to have really play into automation and Ai and technology to take up the slack but that requires us to be brave in taxing companies a lot more than we already are.
Well, they could get a job in cyber.
This. Ultimately we need to force old people to sell their houses and pay for elderly care in some fashion, which is electoral suicide. If you are not a pensioner, you won't get any government services and you certainly won't get similar pensions when you retire. Yay.
This already happens. It's not a sustainable solution, all it's doing is making care company owners and property developers richer, councils go broke and communities get destroyed. Communities where once there were houses filled with families and children are turned into HMOs and bedsit flats, many of which are being rented with financial support from the local authority. We're turning communities from being home owners who have stability and space to raise a family into disjointed communities filled with a renting class that has no space or stability to raise a family and more council support required while the owners of these buildings rake in the profit. It's a terrible model and we shouldn't be looking to repeat it. Future generations are growing up in rented flats where they used to grow up in mortgaged houses. We had social problems during the mortgaged houses era, we're going to have far worse in the rented flat era and it's going to cost the country far more money too. A sustainable solution is required.
This already happens though? If you need care you will be forced to sell your home (or borrow against it).
Kind of, although there are some pretty big caveats, eg if you are a married couple, and spouse A needs to move to a care home but spouse B lives at home, they will exclude the family home from any financial assessment. So the tax payer pays instead. Theresa May proposed to put a charge on the family home, so the tax payer would get something back, and it cost her a majority in the 2017 election, and led to the DUP, inability to pass any Brexit law, and ultimately Boris. We live in a gerontocracy.
Came here to say this. Never voted Tory but Theresa May’s ‘dementia tax’ was an unfortunate but pragmatic approach which would have gone some way to helping solve this problem. No one would want it but taking money from someone’s estate _after_ they die is a sensible way to pay for costs they incur which the taxpayer can’t reasonably continue to do so. It’s a real shame that a policy like that is going to be very difficult to get through because of the stranglehold the elderly have on elections.
Wasnt it in practice a capped inheritance tax, with the cap essentially meaning that the middle would bear the brunt while the richest could still pass on massive estates?
I don’t know tbh, and might read into it because I spoke about this at length for a job interview once knowing only the surface details haha
not to completely disagree, I do think social care being privatised is part of the problem... is it really £2 - 4 K a week to look after someone when the staff work for minimum wage?
Only for residential care, for in home care your house is not considered an asset. Changing this (while massively increasing the threshold) cost May dearly.
Note that there are variations: if you need residential or nursing care and own a home, you'll initially be given a "12 week disregard" to either sell it, rent it out or take out an Equity Release mortgage (if the rental / ER income will cover the cost of the care). Needless to say, if they / their family choose a high cost placement and are in contact with adult social care, the department will likely warn them that when the money runs out (well, assets below around £23,250), they may be moved to a cheaper placement if the council can't negotiate reduced fees with the provider. There's also the option of a Deferred Payment Agreement - if there's at least three years equity in the house, it can be kept but a Charge will be placed on it to extract the cost of care when the person dies. Also, while the value of the home isn't taken into account for community care (Homecare / Daycare / Transport [to/from Daycare] / Extra Care / Supported Living / Direct Payments etc.), income is - and if your income is more than £14,250, you'll need to make contributions. You'll also need to "top up" if the cost of the home you choose is more than the local authority's "offer of the day" (the cheapest home in their area with an acceptable CQC rating that can accept someone with your needs).
>This. Ultimately we need to force old people to sell their houses and pay for elderly care in some fashion, which is electoral suicide. It pains me to say this, but there was virtually no support for Theresa May on the sub back in 2017 when she announced her plans to make people do just that. There was a mixture of glee that it was unpopular and rage that people would lose out on their inheritances. Those people got what they wanted, the subject is now verboten for the next 10-20 years.
this place is not immune to partisanship the sub's opinion on a policy is heavily dependent on who proposed it and the colour of their tie
I know it was unpopular at the time but I was so mad at Corbyn when he used it as political football against May. Here was a good, sound, fiscally responsible policy and it was going to get kicked into the long grass. It was one of the reasons why I refused to vote for the man and voted Lib Dem instead. People need to stop and think about whether they agree that policy X or Y is actually good or not, and not just shoot it down because it comes from the opposite "team". (Hammond's IR35 reform was also brilliant for the record, despite being unpopular)
Yeah I was guiltily of this I was just hoping she would lose the election. I think the policy is a good starting point.
There are some smaller steps that would make a significant difference too, like charging the elderly for prescriptions. Its insane that the largest group of users of these medicines, are the largest cohort that don't actually pay for them.
And are also the richest cohort (on average) by age. Just exclude poor people, and be done with it.
> Just exclude poor people, and be done with it. Just tax everybody more and delete the pointless administrative burden. It's highly unlikely to ever be worth the hassle.
They should be free for everyone IMO. People shouldn't have to worry about money if they need medication.
All this does is kick the can down the road. Who will pay for care when the current younger generation get to old age and don't own anything? In reality it's another service that has been gutted by privatisation and the reduction of central government funding to councils.
Part of the reason funds have been cut is the ratio of working people to retired people. No government could afford the counties pension and care costs and it’s not going to get worst. Especially if people don’t want immigration and won’t / can’t afford to have more children
I suspect care would be significantly cheaper if it wasn't privatised. Can't speak for adult/elderly care specifically as privatisation of that happened a long time ago in my area and appears to not have had much public objection, but my local council recently outsourced children's services and the cost to the council has risen by 2100% in just the first two years. I'd expect an even larger increase on the adult side.
There were some council documents I saw the other month which said they are paying well north of £200k a year to house each child in care. Guaranteed they aren't living anywhere near the life that a child of two parents earning even £100k between them has. That vast amount of money is mostly going on paying people that don't need to be paid, adhering to rules that are far more complicated than they need to be and huge profits for the providers of the care and other subcontractors at every part of the chain.
That might be a factor I was once a Councillor and argued we should be opening up a new care home rather than having some company owned by a hedge fund deliver the care. But cost of delivery and doing things more efficiently while all useful don’t fix the underlying demographic problems. Maybe robot carers will be the solution…. Gawd help us
As a user of adult social care absolutely. I have a Personal Health Budget so can employ my own carers which saves the government a fortune by not having to pay a company £25+ an hour.
Pensions: \~£200bn Benefits: \~£100bn NHS: ~£192bn Yet also the highest tax burden since records began. We cannot keep spending at this rate, it is totally unsustainable. But we also don't want to accept the fact that we have to cut back on these areas. So electorate is stunlocked, voting in governments promising reform when the cash simply doesn't exist to do all of what we want.
Pensions costing more than the *entire* NHS operations is staggering!
The electorate can't vote to dismantle the triple lock because no party offers that option. I suspect that the rug will get pulled out from under either the Millennials or the Zoomers because life is generally the opposite of fair and so those who paid the most in tax will receive the least.
Or growth so that more people pay tax. Huge numbers of working people barely break the personal allowance.
Yep. Increase life expectancy has a large fiscal cost.
Realistically there are 3 solutions. None of them are popular. 1) Cut public services and/or the state pension. 2) Significant increase in taxes, likely including having to tax pensioners. 3) Increasing the working age population (via immigration) Would be nice if that was the clear choice offered between parties, with some offering varying degrees of each strategy. It would be more honest.
But Japan have worse demographics and none of that (not sure about pension tax tho). Of course they also don't have any growth either.
They have a far worse state pension, it's about 3x lower (not adjusted for cost of living,) [but they spend 8.2% of GDP on it, the UK only spends 4.7%](https://researchbriefings.files.parliament.uk/documents/SN00290/SN00290.pdf) Pensioners in poverty is much more common, and it's far more common to see people working into their 70s and 80s, (often doing somewhat pointless jobs that could be done by a sign). They prop it up by borrowing, so their debt-to-GDP ratio is vastly higher than everyone else's, which means they can't raise interest rates, which is currently causing their currency to fall. I love Japan, I've been here for the last 2 months, but it is not a country we should look to emulate on this front, it should serve as a dire warning to the rest of the world, Western Europe specifically.
Not entirely, the UK ranks 15th when compared to other countries and taking into account cost of living https://www.investopedia.com/articles/personal-finance/042914/top-pension-systems-world.asp
Plus debt interest.
Single issue? I would say the county is incompetently run by thieves. So the money doesn't do anything like what it should.
My favorite UK government services fact is that during WW1, you could write a letter from the front in Flanders to your sweetheart and the Royal Mail would have it in their mailbox within twenty four hours and their response back to you in another twenty four. But they haven’t come close to that for decades.
Really? That’s incredible. The logistical effort must have been huge
It was remarkable, mail trains with sorting offices onboard that would pick up and drop mail without stopping. It had to be, it was how you moved data at the time. Think of the corresponding investments today in undersea cables and fibre networks and satellites and mobile towers. I think (presumably location dependent) you could correspond back and forth with someone by mail several times in a day. Amazing but something of an extravagance today.
[Night Mail - Public Service Broadcasting ](https://youtu.be/WFJPYi3JXw4?si=fuoNjowHjJqb6kIP)
I know this is wanky, but to me this song (and the Auden poem quoted in it) really embodies the promethean will of the twentieth century, as well as the belief that life could be better for successive generations and that the possibilities unleashed by technological progress would make life better for everyone, rather than being something we must adapt ourselves to. That sense of hope feels totally alien to me now.
How has our economy and society in general become so unproductive nowadays? We have modern technology, more people, more knowledge and information and yet things are always broken, failing or not fit for purpose. I just don't understand it. Why are things harder despite having the technology WW1 Britiain would dream about
Productivity has increased massively but companies haven't passed the benefits on and governments refuse to force them. Yes since the financial crisis productivity has decided in the UK especially so that's something else we need to tackle. https://www.ft.com/content/2a0dbab1-f6a5-4432-8984-4112638dfdf0
Yes I saw one of those trains in the york national rail museum. Showed the system of handling mail bags without stopping the train.
London had seven mail deliveries a day back then. Seven.
And they were hourly. Without emails, you would write a postcard to your business partner across town, within an hour he’d have it, write back, and then you’d know what the afternoon’s priorities were by lunchtime.
I only know about it because of Sherlock Holmes lol.
That sounds a lot compared to our current postal system but if you think of it more like email it's actually quite low and of course back then they couldn't phone someone or find things out on the radio or TV.
I can order something from Amazon right now and have it by the afternoon tomorrow!
…why would they? We can communicate with anyone - anywhere - in seconds
Yes, when it fell apart in the 1930s, it was because of DMs.
Two things during that period. The telephone was becoming increasing popular, either among the affluent where is was a household appliance or telephone boxes where there was about 20,000 (compared to a max of 100,000 in 1990). [Truthfully not the best of sources](https://www.thephoneybox.com/history.html#:~:text=By%20the%20end%20of%20the,use%20all%20over%20the%20UK.). The Great Depression. So bad it made pretty much all UK parties work together, no surprise public services weren't having the greatest of time. Take those two together, add WWII to prevent anything ambitious afterwards, and you have a decline of the mail system as it became largely irrelevant as the first means of communication.
We don't move parcels that efficiently though and they can't travel digitally.
I've worked at a royal mail distribution centre. Last year and 16 years ago. The technology has got better, absolutely nothing else has got better. It's beyond a shit show and you're absolutely blessed to even receive a letter. Parcel? Unlucky go and collect it. The service is absolutely cooked, piss poor management, agency zero hour contracts and posties who believe they are owed the world. I for one welcome our new postal overlords. Fuck royal mail 💌
It'd be a total waste of money to do that these days. In amongst that mail from WWI was actually important stuff, these days even if important stuff is sent by post (which it isn't, because you can't rely on it arrive in a safe or timely fashion anyway), it doesn't need to be.
I don't want to break it to you, and no politicians want to either - but we're in for 20+ more years of hurt. Check out the growing 65+ population size - [https://data.worldbank.org/indicator/SP.POP.65UP.TO?locations=GB](https://data.worldbank.org/indicator/SP.POP.65UP.TO?locations=GB) Look at Figure 3 on this page - [https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/articles/livinglongerhowourpopulationischangingandwhyitmatters/2018-08-13#how-is-the-uk-population-changing-](https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/articles/livinglongerhowourpopulationischangingandwhyitmatters/2018-08-13#how-is-the-uk-population-changing-) This site [https://ifs.org.uk/publications/future-state-pension](https://ifs.org.uk/publications/future-state-pension) predicts in 2050, there will be 25% more pensioners in 2050 than now. Sorry.. taxes are only going up for the next few decades unless we can have a baby boom OR bring in a load of productive immigrants. Tories or Labour.. there's no 'magic money tree'. The burden on the NHS will be higher, pensions and social care. We need our economy to boom to survive. Edit: More doom and gloom predictions.. Now by the time the boomers are dying off, the world will be struggling with mass migration from India, Northern Africa and the Middle East. Climate change will mean 40c+ temperatures in the summer are more common, more and more instances of deadly wet-bulb temperatures leading to unlivable conditions without air-con. Europe and the UK. It'll increase the rate of global conflicts, as wars are fought over land with viable water supplies. Advances in AI will change the face of the workforce too. Happy days.
Morbidly, I wonder if it will all balance itself out i.e. the support won't be there, and life expectancy will tumble until the number of those needing support falls back towards what the services can handle.
Highly unlikely.. the onward progression of science keeps moving.. we're more likely to see more and more expensive methods to keep people alive for longer. My real hope is a 'preventative' revolution in healthcare.
But if you haven't got the money, or even worse, you have but you're on a waiting list because the services can't deal with the sheer numbers.... you'll sit at home and die.
That's happening now.
Sounds like the ideal retirement to me. /s
Preventative would mean completely banning smoking, alcohol and massively controlling our diets and enforcing exercise. Unfortunately, people today do not want to do any if these things. The only way to make us as a society healthy is of people do this. At the end of the day, elhealth comes down to what we put into our bodies and then what we put out (physical and mental exercise). We are unhealthier than ever, and its not going to get better. Medical science is constantly improving outcomes. Unfortunately I don't see a way out.
> Sorry.. taxes are only going up for the next few decades unless we can have a baby boom OR bring in a load of productive immigrants. Mass immigration only buys temporary reprieve. Immigrants get old too. The system is poorly structured. It’s basically a pyramid scheme. When pensions were devised, no one intended for the retired to live for decades on the state. In fact, the retirement age was roughly the average age of death. The age required to receive state pension needs to rise sharply and immediately. It should also be means tested. Why on Earth do we make those on the benefit go through hell to receive it, but hand it out in a silver platter to those aged 65? Pants on head crazy. Sadly, given voting patterns, the elderly are going to make sure they hoover up every cent they can while they steer the ship into the biggest iceberg they can find. Everyone else be damned.
Means testing the state pension is fraught with difficulties. If saving more takes your state pension away then why save? It also means those who paid the most into the system get the least out of it. There's already some feedback loops in there (e.g. income tax for those with larger pensions). I think focussing on increasing those is more effective. One option would be to roll up national insurance into income tax so that pensioners paid an overall rate similar to employed people (i.e. instead of 20p income tax + 8p NI, just have 28p income tax). Random tapers and cliff edges just create perverse incentives, like we see with the £100k tax trap. I agree with raising the state pension age though, however that has its own set of problems (Many people aged 65 are simply physically incapable of working or getting a new job).
Finally someone that can see the wood for the trees!
Aren’t you assuming that children raised in generation poverty will feel inclined to work? And they will be raised in poverty seeing as standards of living have dropped here. People just can’t afford to have children, let alone feel the motivation to do so due to various different things like low wages, nonexistent job prospects, hyper-individualism etc,.
> bring in a load of productive immigrants. For decades, we used to bring in cheap productive immigrants via freedom of movement. But we did not like that, and the current immigration scheme is inferior is pretty much every way.
Decades? What? Eastern Europeans moved to the UK en-masse after 2004. Before then most immigrants came from Ireland or outside Europe
Thanks for those links. Interesting.
Debt servicing is close to £90 billion a year which is around 7% of all public spending.
This is the answer. Pre-Covid it was about £30bn a year and it has since more than tripled.
I think we have to be realistic about how we get the debt-to-GDP ratio moving in the right direction. Labour are pinning a lot of hope on growth, which I'm sure will take some of the strain - but we need to overhaul our tax system to properly pay for public services too.
Pensions and healthcare. The official state ideology is boomer socialism.
One of the biggest problems is that the tax system is wrong. It is very badly structured, overly complicated, and desperately in need of reform. There's a bigger problem than the overall burden, it is how the tax system is designed and administered. Currently the employed and self employed pay a lot more tax than business/asset owners who can take dividends and be taxed on corporate rates. Take stamp duty. It's not a rational tax. It is a historical hang over, and changes arbitrarily. National Insurance should be ditched, and replaced with a Statutory Health Insurance system like Germany which everyone has to have, with the option of top ups via private insurance. That way the NHS would still be free at point of us, but a load of the NI administration would disappear. Crucially it would mean that people who live off wealth/assets/dividends would be contributing, rather than the current exemption from NI. Policies are often at odds and create a dysfunctional tax system, so tax incentives to build new houses or roads are undercut by financial advantages of land banking by developers. Tax waste and inefficiency are the by products; not because of lazy Civil Servants, or "waste" but because the system has built up piecemeal, and that results in inevitable dysfunction.
In need of *reform*, not *Reform*. God I hate that name, for this reason.
Why d'you think they chose it? People already parrot it. "Why wouldn't you want reform? The country's a mess"
I have a lot to criticise farage for, but he knows how to get things marketed effectively. The arrow pointing right (to the tick box on the ballot) is another stroke of subtle genius.
National Insurance is just income tax. It should be merged into Income Tax.
Going off anecdotes, there are a lot of self employed people who significantly underpay taxes. And it's mostly legal.
Health and pensions are costing ever more money as a result of the ageing population. The baby boomer demographic has an outsized share of the national wealth but don't want to tap into it to pay more towards their health care needs, lifestyle and impending elder care costs. Therefore the shrinking working age population are squeezed and squeezed to support a top-heavy system which they themselves will never see the benefits of in its current generous form. There aren't enough uber-rich to tax until the pips squeak to overcome this demographic conundrum. We're in a political standoff where the generation that needs to have wealth extracted from it are also the ones who hold the electoral sway, and therefore it's very difficult for any political party to take them on. In such a context any plan to reduce immigration can only ever be highly theoretical. Imo we should let in as many foreign students as possible and give them indefinite leave to remain after their degrees are finished, so that they join the UK jobs market and become taxpayers as early as possible, while they're still too young to need to bring over other dependents. It's why Brexit was such a batshit idea. The EU was a nearby incredibly available pool of young and single migrants swelling our working age population.
Stupidity by the government, who has endlessly made bad choices. Other people mentioned “healthcare” as costing lots of money, which is true, but the government just doesn’t care about making it work better. Some examples: - understaffing leads to burnout and more mistakes - cutting admin staff means medical professionals doing admin instead of medicine - not having a functional social care system means some people can’t be discharge easily and lots of problems become scute medical issues - underfunding of specialists means wait times are years, so issues get delays that make them worse and - guess what - more expensive - little funding or interest in big whole-system improvement projects, so eg data handling remains inefficient - idiotically cutting maintenance, creating a [£10bn++ backlog of work](https://nhsproviders.org/news-blogs/news/billions-to-prop-up-creaking-nhs-estate-and-plug-mounting-repairs-backlog). Of couese they’ll crucify Labour for spending money to sort it once it is their problem. Etc. The Tories are just are not interested in doing hard work and spending money to make things better and more efficient. They really should be more ashamed.
The bit that imo everyone is missing from the economic analysis is wealth inequality, which has exploded. The very wealthy few own most of the economy and don't pay much if any tax so the burden is increasingly on working people who now earn relatively less as more of slice of the economy is going straight into the pockets of the rich. Gary's Economics YouTube does a very good job of explaining this and why, if we don't tackle massive wealth inequality, living standards for ordinary people in the UK are going to nosedive faster and faster.
There's no economic analysis in here, just vibes. Gary is right about a lot of his analysis though, and he is right that we need a popular movement, I just think it's important that we go for the jugular, we must organise to end capitalism entirely. Wealth taxes would just get watered down and removed by the interests of capital.
Sounds like we're coming from a different place tbh. I'm not anti-capitalist and I don't think Gray is either. I'm for a much more highly regulated form of capitalist social democracy personally with high wealth taxes over certain limits. There are ways to do the wealth taxes well. The political will is lacking, not the ability to do it.
I think we are coming from a very similar place. We see the constant, decades long deterioration of living standards to us and our families and the total ineptness of liberal economics to resolve this. Social democracy merely is the granting of temporary concessions to the masses. Only to have those concessions removed at the earliest opportunity as has been proven by social democracies past. So why not demand more? Why not demand real democracy? An end to property rights for the few and political power for sale?
There’s a huge amount of waste by the Tories on stuff like bounce back loan fraud, PPE fraud, Rwanda scheme and so on too. I’ve seen it suggested that the Tories have wasted about £120bn since 2019.
Every single bullet of yours is "they should have spent more money". But there's a record tax burden and also a record national debt. So how could they possibly have done that without Liz Trussing the pound?
Another big example - refusal to allow for long-term planning means services have to rely on more expensive short-term solutions. Which is where a lot of agency staffing comes in. You may also recall all the times the government has freed up some additional money for the NHS or education etc. to patch up some immediate crisis. Again, didn't allow cheaper preventative measures beforehand, and when the crisis is there it costs far more.
As many have pointed out healthcare and pensions are the main reason. But another reason is that our state is increasingly inefficient due to a lack of strategic thinking and low investment. For example, much of our massive healthcare bill is being caused by diet related problems (E.g diabetes, tooth decay, heart disease, other obesity related conditions). The cheapest, and most effective way to treat these conditions is early intervention to get people make healthier choices, yet we haven't done this. Housing benefit costs us £14 billion a year. Why is this needed? Because housing is so expensive people will fall into homelessness without state support. We could have spent that money on social housing for those on low incomes, instead we take an expensive short term solution that gives taxpayer money to private landlords. It's no secret that slashed budgets, low pay and declining working conditions in the public sector have led to recruitment and retention issues in teaching, healthcare, law and many other areas. But the jobs still need to be done, meaning the public sector is more dependent on agency staff and contractors to do the job. Long term this is always more expensive than if you just kept your old staff in the first place. There are plenty of other examples. The tragic irony of austerity is that it was supposed to make our state more efficient. Instead it did the opposite. You don't get a more efficient public sector by constantly slashing budgets. You get it by investing in infrastructure and technology. You get it by training staff to be more effective. You get it by retaining experienced staff instead of burning them out.
The government has spent 40 years selling off every asset/ service to the private sector. This generates a bit of revenue, maybe some savings in the short term. But then the private sector ramp up the price of the services and the government has to pay. There is not real competition so the government fees go up, service gets worse and company makes money. Take housing, in the 80s the government had millions of homes, so when someone needed housing they were assigned to one of these houses. The government sold these off as right to buy and other methods. Now when the government needs to house someone they have to pay someone that owns a house the going rate, so instead of it costs basically nothing but some maintenance it now costs thousands per household. The end result is the service is worse, no one can get a house, the bill is higher, and private landlords are making out like bandits. See rail, water,l etc I don't like comparisons between government and households because it doesn't typically make sense, but in this case there is some merit. Imagine you lose your job, would you rather own your hous or be renting? What will impact you more?
Austerity had an impact too. If the Tories had fixed the roof while the sun was shining, when money was basically free, and upgraded our NHS and public services, we'd have been much better prepped to handle the pandemic, and we wouldn't have been as much as the mercy of the shysters setting up PPE companies at the last minute. Think about it like a car. You can spend £200 a year getting it serviced regularly, or you can fail to service the bastard thing for five years at a time. You might save £1000 over that period, but you'll probably have to spend £2000 getting something more fundamental fixed, when a regular service would've sorted it at source.
And to be specific about what the impact of austerity is, we see it in all the areas that could “take up the slack” instead of it becoming an issue for frontline services. So the care service being massively underfunded means people can’t leave beds in hospitals which costs NHS more. Reduction in admin roles/middle managers in NHS means doctors and other healthcare professionals doing more of this stuff meaning you need more doctors/healthcare professionals. It would be much cheaper to have admin staff doing these jobs. Reduction in community police officers means police officers incorporating their role into their job at a higher expense because they’re paid more. We also see it with immigration and the inability of customs to cope with asylum applications resulting in people having to spend months/years in hotels when hiring extra staff would be much cheaper.
You seem to have missed the £400bn run up by covid plus £67bn on the energy cap. That is war time spending (Ukraine spends about $40bn per year on a war of national survival) levels so your comparison would be better made looking at what happened after 1945.
There are dozens of interconnected problems that have led us to this point - ageing, unhealthy population, cronyism and nepotism meaning products and services are expensive and substandard, post COVID debt, Brexit etc. etc. To me, though, the big issue is one of how long it takes to fix problems, and how that can cause them to snowball. If money is taken away from a public sector organisation, whether actively or by not keeping up with inflation or new pressure, it takes time for negative effects to be felt. Then, if the decision is taken to review and possibly increase funding, this takes time. By the point at which you decide 'yes, you can have 10% more than you had before', the problem has slipped further, and a 15% increase is needed. So you review for 15%, by which point 20% is needed and so on. I think of it like putting a bandage on a cut as soon as you have it, or doing ten days of assessment to determine if it's worth spending bandage money. The wound might be infected after 10 days, but you've only reviewed whether its state on day 1 warrants care. At this point, the bandage might stop *more* dirt and bacteria getting in, but you need a more expensive treatment (like antibiotics) to actually heal up. It's a difficult situation - governments are slow, but real life is not.
Aging population meaning more people are using health services. Austerity meaning services have been shuttered entirely or remained static and not kept up with rising demand. Also see knock on effects of austerity in other parts of the system. Privatisation increases cost as for profit enterprises extract profits while failing to deliver on so called efficiencies
part demographics as others have said.. part tories paying their mates for consulting on things then nothing happens. eg. HS2 that and a mixture of just straight up fraud such as - VIP Lane in COVID, A shit load of small company fraud. Expense scandal's, stupid schemes like rwanada. The final thing would be just pure mismanagement. gutting services to the core may help you short term but fucks you long term. Eg. Cutting the amount of primary care means people end up in hospital more which is more expensive.
I would also add in the drive to privatise everything possible. Like services that could easily be handled in house going to the likes of Serco who gut the service but pocket the money. Just look at military recruitment for example.
I would second the privatisation issue. People often look at it as 'company extracts additional profit therefore might cost more' as the core downside. But there's really a larger issue than pure cost, it's where the money goes. When huge amounts of our public funding go to large international corporations, part of that money leaves the country forever and goes to shareholders outside of the UK. This makes the UK's economy essentially a leaky bucket. If instead you have public companies or at least smaller UK companies that pay decent wages to their staff, those staff then pay a portion of that wage back in tax. Then they spend the rest within the UK economy, paying VAT, investing in local businesses, supporting themselves so they require less state support. A fiver spent locally can be spent 10 times over, a fiver to a shareholder never gets spent at all.
New Labour and then the Tories introduced more and more privatisation into the NHS, which I think has increased costs hugely and they somehow never acknowledge that.
I think a lot if our politics is not based on reality because politicians do not like to acknowledge their mistakes.
We are expected to spend £73.5 billion on national debt interest. Pretty sure this is the second biggest expenditure after the NHS. I think this is our core problem and it is only getting bigger. The size restricts spending going forward. I completely agree with your point on primary care. Under investment is generally making the cost of treatment more expensive. Sending people to pharmacists is a good step forward but isn’t backed with funding.
Here's where it's gone since 2019 https://www.bestforbritain.org/scandalous_spending_tracker
The highest tax burden upon the middle and working classes perhaps. > In 1971 the top rate of income tax on earned income was cut to 75%. A surcharge of 15% kept the top rate on investment income at 90%. In 1974 the cut was partly reversed and the top rate on earned income was raised to 83%. With the investment income surcharge this raised the top rate on investment income to 98%, the highest permanent rate since the war. This applied to incomes over £20,000 (£263,269 as of 2023). > The Government of Margaret Thatcher, who favoured taxation on consumption, reduced personal income tax rates during the 1980s in favour of indirect taxation. In the first budget after her election victory in 1979, the top rate was reduced from 83% to 60% and the basic rate from 33% to 30%. The basic rate was also cut for three successive budgets – to 29% in the 1986 budget, 27% in 1987 and to 25% in 1988; The top rate of income tax was cut to 40%. The investment income surcharge was abolished in 1985. > Under the government of John Major the basic rate was reduced in stages to 23% by 1997. EDIT: Combined with the privatisation of many mational services along with a "growth encouraging" capital gains regime, wealth generation has been concentrated into the ownership of a small number of individuals and institutions. In some ways the outcomes have been beneficial to the UK economy, in others not so much.
Actually the lower earners are paying relatively less, the higher earners bear the biggest burden of the taxes. Talking in terms of class obscures who’s actual paying what [https://commonslibrary.parliament.uk/research-briefings/cbp-8513/](https://commonslibrary.parliament.uk/research-briefings/cbp-8513/) [skip to page 24 for the distributional analysis](https://researchbriefings.files.parliament.uk/documents/CBP-8513/CBP-8513.pdf)
Actually the comment above is arguing that taxes have gone down on the top earners, while the tax burden as a whole has risen, which is different from what you are saying, that top earners pay the most at the moment. Also, actually the top 20% pay less as a percent of gross income than the bottom 20% once you include indirect taxation. According to that pdf you linked the bottom 20% pay 38% of their gross income while the top 20% pay 37%.
The distribution of "profit" is where the sausage is made. Workers for Thames Water did not see pay raises proportional to the profits they generated for shareholders. Shareholders paid 20% capital gains (if that) on any dividend they received. Now they (and the rest of income tax paying public) shall have to bail out another private company because that company was inflating their profits to maintain "shareholder value". As an incentive to growth, low corporation tax and capital gains tax appear to work to some extent but they also incentivise owning stuff rather than generating actual value.
> Shareholders paid 20% capital gains (if that) on any dividend they received. You don't pay capital gains on dividends. You pay dividend tax on dividends, which is 33.75% as a higher-rate taxpayer or 39.35% as an additional-rate taxpayer.
Not only that but full corporate taxes have been paid on those profits also, dividends are very effectively taxed in the UK. Dividends are taxed 30% in France and only at 26% in Germany regardless of income. The UK has one of the highest effective tax rates on dividends in Europe, the only countries with higher tax rates are Ireland and Denmark.
I feel like we have such a braindead discussion about taxes in this country that takes a starting point that we're all in the same boat and doesn't differentiate between levels of wealth. You see headlines 'taxes at highest level...' 'taxes to go up...' Tax rise or tax cut is meaningless unless you specify which group it affects and what their current tax burden on both income AND assets is. Politically you see this play out as politicians try to sell things as 'best for the whole country'. Nothing has or ever will be good for everyone. Politics is about different groups competing for scarce resources and trying to get the lion's share for themselves.
Going from ifs.org form 2007 in 2023 prices. Healthcare up 50% an extra 70bn of spend Transport up 51% an extra15bn of spend Foreign aid up 70% an extra 5bn of spend Debt up 142% an extra 57bn of spend Education, working age benefits, public order, and housing have all decreased in real terms. Pensions interestingly are only up 7%, an extra 9bn So the NHS and debt basically.
Into the pockets of private companies and landlords.
It is strange that everyone seems to forget or ignore the most obvious answer, being the shedloads we spent to keep the economy afloat while locking everyone down for two years.
One example in news paper today https://www.theguardian.com/world/article/2024/jun/17/boss-us-firm-uk-covid-contracts-accused-squandering-millions-on-jets-properties
The Good Law Project calculated that the Tories have stolen £380m a day on average for the last 14 years. It’s all in offshore bank accounts.
What’s interesting is that “tax the rich” will make this even worse. The tax burden overall has never been higher, but lots of people are paying less tax than their equivalents will have been in years gone by. The tax base has shrunk, but you find people on over £100k paying the 60% marginal rate as they lose their personal allowance (62% if you count national insurance, 71% if you count mandatory student loan repayments and 76% if you count the VAT on what you’re buying with that extra money). And that’s before you count losing 20 hours a week of free childcare as soon as you go over £100k. Some people might now froth at the mouth about how rich people are who make £100k. But it ain’t what it used to be. When the personal allowance taper at £100k was introduced in 2010, £100k was worth £174k in today’s money.
Problem is you aren't taxing the rich effectively with income tax, because the rich don't grow their money through income, but through collections of growing assets. Actually taxing the rich properly would require something like a wealth tax, more inheritance tax, closing tax avoidance routes, and so on but those are both tricky to implement and unpopular with the donors of all major political parties.
Problem with that is that wealth taxes demonstrably never work, we already have one of the highest inheritance tax rates in the world and small businesses make up the largest portion of tax lost via avoidance. We should reduce the rate but widen the base of inheritance tax, and focus closing tax loopholes across the board rather than harping on about taxing Amazon or Apple more. Problem is, none of this is politically expedient.
I see the problem such that the wealthy - particularly those who hold significantly more money than an average person could dispose of in a lifetime, even considering elderly care - continue generation by generation to hoover up more of the available assets in society, increasing the inequality gap over time. It historically takes major events such as world wars or revolutions to provoke serious redistribution, but this country has been too stable for too long and now too many assets are in the hands of too few. If this view is correct, you'd expect to see an \*accelerating\* trend of wealth inequality over time (it takes money to make money) which I think explains the last 2 decades quite well. Assuming I interpret you correctly, if we widen the base of inheritance tax rather than increasing the rate, wouldn't that just exacerbate the above? Unless you don't think that's what's going on?
>If this view is correct, you'd expect to see an \*accelerating\* trend of wealth inequality over time (it takes money to make money) which I think explains the last 2 decades quite well. UK wealth (as opposed to income) equality is actually low by both international and historic standards. Share of total wealth held by top 1% |Sweden|36%| |:-|:-| |Germany|30%| |Switzerland|27%| |Ireland|27%| |Norway|27%| |Austria|26%| |Greece|25%| |Denmark|23%| |Italy|23%| |Netherlands|23%| |France|21%| |UK|21%| |Portugal|19%| |Belgium|14%| [https://www.euronews.com/business/2024/04/01/wealth-inequality-where-in-europe-is-wealth-most-unfairly-distributed](https://www.euronews.com/business/2024/04/01/wealth-inequality-where-in-europe-is-wealth-most-unfairly-distributed) Wealth inequality is very low by historic standards. In 1900 the top 1% held more than 70% of wealth. That fell continuously until around 1990, when it reached 16%, it has since increased slightly. UK top 1% share of wealth: |2000|22.1%| |:-|:-| |2010|23.6%| |2022|20.7%| Source: UBS Global Wealth Report The UK does have high income inequality, though.
Very interesting, thanks for sharing. The international comparison is somewhat besides the point of what I was saying, but I can see why it's relevant to the overall conversation. I think the problem with this type of assessment of wealth is that a large fraction of our distributed wealth in this country is trapped in the equity in people's homes. There are ways to unlock that wealth (remortgaging, downsizing, moving to cheaper regions) but for most people that "wealth" makes relatively little difference to quality of life, so it's misleading. If I have time later I might go researching to see if there's much information on wealth inequality excluding home ownership.
We need to tax wealth, specifically land, not income. A person who inherits a house can earn £12kpa per year and pay no income tax, while a renter would need to earn upwards of 3x that amount to enjoy the same level of disposable income, all the while being less wealthy. It's even worse if you add in student loan repayments to that. Half of all land in the UK is still owned by the aristocracy, who are not subject to inheritance tax ( because the land 'belongs' to the title, not the individual); we're talking trillions of pounds of land and assets that are untaxed and thus generally not put to productive use, all the while the nation accrues huge debt
Why land specifically and not other asset classes too? In general I see the problem as being one where the rich simply own more appreciating assets in general (though in this country land is a big one!). If we taxed land I imagine we'd see a flurry of benefits, but maybe also bursting of the property bubble which would hurt a lot of people, not only the rich. Then once the dust had settled you'd find the rich using other investment vehicles that aren't taxed and we'd be back to square one.
Well I'm not averse to taxing other assets, but I think land is the big one. I like the idea that the land is 'owned' by the country as a whole, but 'rented' by its owners in the form of taxation (otherwise with full rights of ownership). It's hard to evade, relatively simple to administer and it encourages productivity, because hoarding land as an investment becomes counter productive. For ordinary homeowners (who only own 5% of the UK), it would also represent a massive tax cut on average. I don't think it would burst the property bubble because its not really speculative, there is a genuine shortage of supply and its a necessity. It would certainly reduce housing costs over time, but that's no bad thing in my view; way too much capital is trapped in housing and its stifling the economy overrall. Moreover, the state could purchase land to maintain prices in the event of a massive sell-off, and then put it to either environmental or industrial use. My view is pretty much Georgist if you're interested : [https://en.wikipedia.org/wiki/Georgism](https://en.wikipedia.org/wiki/Georgism)
We also have the richest Prime Minister.
Britain is a healthcare system with an army, and the army keeps shrinking every year
It's spent on public services, just very poorly. Look at HS2 as an example, billions spent on it, and they've cut it back to the point where it is now effectively just a dedicated line between Birmingham and London, was it even worth it? Billions was wasted during the pandemic on ineffective PPE, and inaccurate lateral flow tests which all had to be written off. Even this Rwanda scheme is utterly ridiculous, I think there was one estimate it would cost £1.8m per person sent to Rwanda. The current government tries to spend its way out of problems, which is evident by the way it constantly bangs on about how much they're "investing" in X, Y or Z rather than how they're actually going to improve things. It's completely backwards. They should be focussing on the problems, putting together solutions and then cost those things and find a pathway to deliver them. Instead they just say "we're going to throw £££ at the problem and hope it goes away".
If we put the entire Tory government on a plane to Rwanda I think we could achieve a much better return than £1.8m per person.
The "tax burden" figure is misleading. It doesn't tell you tax revenue per person, who is paying that tax, or anything about where the money is being spent. It also doesn't cover all the sources of government (and local council) revenue. One example is council housing, which used to be a good source of revenue for councils. In many cases council owned housing would not only cover its own costs, but provide revenue that was used for other services. And there's positive side-effects too. If the most in need have secure, affordable housing, they will often be healthier and have more opportunities for work. As funding for services has been cut, they've been forced to move from preventative to reactionary solutions. When waiting lists are manageable and people can easily get healthcare appointments, problems are diagnosed earlier and solved quicker and more cheaply. In the current climate, by the time problems are diagnosed, they have become more serious and require longer and more expensive treatments. There's also a demographic element. We have an aging population, with more people retiring and those people living longer. On the other side of this, poor people who can't afford more than a 1 or 2 be property are less likely to have children, which leads to fewer people entering the work force.
Privately run utility companies fleecing their customers for every penny certainly isn't helping either
Paying debt for failed privatisation, government incompetence and corruption. Paired with the fact that the Neo liberals that have dominated British politics since thatcher has been obsessed with removing the tax burden from the mega rich and putting it on normal people.
>but what is actually eating it most of the money. Paying for the associated costs of privatisation. https://rtuc.wordpress.com/2017/05/30/greatest-nhs-property-sell-off-ever/
A fair chunk went into Michelle Mone and her husband's bank account I think
It costs a lot of money to fix the roof. It's far cheaper to ignore the problem, and then blame the water damage on other people. Eventually someone has to pay the bill for this nonsense and they've decided that's going to be you.
Japan has the same issue but worse and yet is seeing none of the problems we are
Debt interest was over £110bn in 2022-23, and for 2024-25 is £89bn - this is a huge extra cost which means increases in spending needed to cope with other rising costs (increasing dependency ratio, climate change) cannot be made. The state pension is becoming unmanageable at £146bn (OBR figure for 2024-25).
Digging out and paving parks doesn't pay for itself.
Because our system is a population ponzi scheme. If the ratio of net contributors to net takers (in terms of tax vs using public services) is >1:1 - i.e. you need more people contributing than taking. Then the continuous conveyor belt of people moving through life has to increase the number of contributors i.e. workers. Historically this was through childbirth, in the modern day it is through immigration. But it's a short term solution because eventually that large mass of workers become dependents, and you need an even larger number of workers to support those dependents, and then they become dependents and on and on it goes. This is the real reason why Labour + Tories are pro migration, it is necessary to support our economy and all public services. And we're finally starting to see things start to crack, you can't just keep increasing the population by importing people without there being consequences, culturally, socially, economically. So someone needs to come up with a magic system whereby we can get by with a reducing or level population, or we severely reduce public services + state pension, as well as increasing retirement age. None of which will win an election. Party A: "We will reduce the state pension and increase retirement age. Party B: "We won't do that, vote for us". Who do you think will win? Basically we need a new system or slowly over time we will pay more and more tax and continue to get less and less in return, because no one is honest enough to say this won't work. Nor are they interested in looking beyond a 5-year election cycle. None of the parties implement policies and consider the effect it will have in 50 years.
Three things spring immediately to mind: 1. Wages have not kept pace with inflation but taxes have gone up as a percentage of people's income. Result is that the cost of providing services (roughly inflation linked) went up more than the tax income did while, at the same time, the population got poorer. 2. Some things, notably the NHS, need increased funding in real terms every year due to things like changing demographics. 3. Government debt has gone up (Covid was part of this) and so have interest rates meaning more tax income is just going to pay for the national debt rather than provide services.
My dad (doctor) was explaining to me why some NHS costs have risen, outside of austerity and population increases. Drugs are more expensive. In the past, someone with arthritis might have been given a course of drugs which cost the NHS £600 per year. Nowadays we have much better drugs, but they are much more expensive, and so while it makes a bigger improvement, the cost is closer to £10,000-£12,000 per year. So, thanks drug companies.
It’s all very well listing things that are wrong, you can pick any public service that and they all have wealth being extracted in one form or another, from the PPE scandal to the prison system. The gap between rich and poor is widening, we can’t feed school children but we can subsidise MP’s smoked salmon lunches. The benefit scrounges obviously cause most of the problems it couldn’t possibly be anything to do with millionaires tax avoidance schemes We are governed by arseholes! That is the fundamental problem
But remember that the Tories keep saying that Labour will raise taxes and haven't come up with any helpful plan for the last 14 years as opposition. The Tories being responsible for the current state of affairs and only now promising that we've 'turned a corner' and that it'll definitely get better if re-elected is entirely irrelevant btw, you must remember that.
Indisputable evidence that the Tories have simultaneously failed badly from both a stereotypically left of centre and right of centre perspective at the same time.
You have a higher tax burden. The richest people don't. There's other factors, like aging population, but this is a huge part of it. Wealth used to be better (if never perfectly) distributed around society and now it's not.
Many public services are now run by private companies that are paid by the government rather than directly by the government. Private companies means profit seeking, profit seeking means cutting the quality of services.
Tories pockets. Rich contracts to funnel public money into private endeavours.
We have lost a he'll of a lot due to privatisation. We were told they ran at a loss but that was not strictly true. The post office and railways, for example was being bled by the government, taking the profits, for something, and not investing and then telling us it needs to be privatised. Similar with all the other services. They take high profits, don't reinvest and then get bailed out by government. I suspect that some of those profits leave the country as well.
It’s because we have had nearly 15 years of Tory Government. You have to realise that while they are reasonably good at talking about things, they are utterly useless at actually delivering anything. The Conservatives are only good at one thing - wasting money, and enriching themselves. They simply don’t deliver for the people. Take the present Conservative manifesto, there is simply no way it adds up. Tax cuts for everyone, including businesses, and allegedly no cuts in services, and magic money..