To think there is no more money?

Economist Professor Simon Wren Lewis wrote 4 blog posts earlier this year on government debt and that it makes no sense to say that the country cannot afford to borrow to invest more. They are worth reading.

https://mainlymacro.blogspot.com/2024/02/detoxifying-government-debt-part-1-debt.html

https://mainlymacro.blogspot.com/2024/02/detoxifying-government-debt-part-2.html

https://mainlymacro.blogspot.com/2024/02/

https://mainlymacro.blogspot.com/2024/03/detoxifying-government-debt-part-4.html

I think it’s worrying Chancellor Reeves is insisting on sticking to the Tories fiscal rules when many economists believe after 14 years of massive under investment in our infrastructure and services the govt must spend to fix this - as well as trying to attract more private investment - to kickstart stronger economic growth. Poor public services are bad for the economy.

Prof Wren Lewis says one possible problem of increasing public spending significantly is running up against a lack of real resources/labour. To address the economy overheating he believes some taxes need to be raised. Discussed here https://mainlymacro.blogspot.com/2024/03/

Michelle Mone has quite a lot of it.

This

https://www.cityam.com/despite-its-problems-thames-water-still-aims-to-pay-2bn-in-dividends-over-the-next-decade/

https://news.sky.com/story/ofwat-hits-ailing-thames-water-with-40m-fine-over-dividend-payment-13146393 £40m dividend paid last year

https://www.theguardian.com/business/article/2024/jun/28/thames-water-board-150m-dividend-payout-funding-u-turn and they'd have paid more if Ofwat didn't stop them.

“No money left” for schools and hospitals, yet plenty of billions for vanity projects such as:
millennium dome
war in iraq
lockdowns
booze for mps
mps pay rises
hs2
cancelling hs2
massive IT projects

Heard it all before.

there has already been clear indications that HMRC are going on a drive to claw back taxes that have slipped through the net and don’t meet requirements. This can be seen in certain workplace benefits for example eg childcare. I think it’s around 6 years of unpaid tax some will owe. Just an example of one of the crackdowns along with private school tax

Over half of people are net recipients from the state.

This is 12 years old and reckons around £40k to be a net contributor on average, though of course varies by use of public services.

Track and trace cost £35m.

The billions went on testing kits, emergency hospital provision and everything else that the government was being urged to do.

For a start nearly 50% of people take more out in benefits than they pay in taxes.

Households with the main breadwinner under 44 on average get more benefits than they pay in tax, largely because of the cost of education in the household.

It is only people aged between 45 and 64 who on average actually pay more taxes than they receive in benefits.

So while people say they've worked all their lives and paid taxes blah, blah, blah, it's for a relatively small period of time that they actually put in more than they take out, even if they are working (obviously these are average figures because there will be some younger people who have high incomes and no children who would be net contributors their whole life).

Also bear in mind that direct taxation has reduced since the 1980s/90s.

I used to pay 33% tax as a basic rate taxpayer. It's a lot less now.

The other issue is that we have an ageing population with people receiving pensions and social care for a lot longer period. This costs a fortune.

My frustration though is that people want good public services, a fully-functioning NHS, benefits like child benefit and nursery subsidies. They want a triple-lock pension. They want granny to have a lovely care home when the time comes.

What they don't want is: to pay income tax; higher rate tax; indirect taxes; to pay to park in hospitals; inheritance tax - even though the estate can in many cases be worth up to £1 million before you start paying tax; CGT.

How do they think this is possible.

Can you link to the details about Thames water please? I'm interested in that.

British population will be falling from 2030 so I wonder what impact removal of the cap would have on that statistic.

Either way, I think it's popular with voters who like to see benefit-recipients making good choices to limit their need for benefits.

That makes sense. Thanks.

World War 3 is what is coming next, it’s too late to push back.

@XenoBitch my understanding is net contributor isn’t just to do with direct benefits but the cost of state education, NHS etc.

There's plenty of money.

Tens of millions is wasted going to the likes of Deloitte and Crapita to screw up management in the NHS.

Thames water is planning to give £2billion of public money to its investors as dividends over the next 10 years.

It's just where you choose to spend it.

"Not everyone on under £40k is being propped up.
My DP is on £30k and claims no benefits.
I used to be on 14k (this was actually 14 years ago), and I was not entitled to any!"

You can still be a net recipient of benefits. They calculate the cost of your access to state education, nhs, state pension etc over your lifetime.

Then it's nothing to do with the cap

I don't begrudge MPs a pay rise or a decent wage. I think they do a hard and thankless job. And we wouldn't want to return to the days where only the rich could afford to do it, funded by family money. You need a good wage to attract talented, ordinary people.

I cannot see why we should remove the two child cap. Having more than two children is a luxury. If you can't afford to look after your family, don't have the third

hardly anyone has 3 dc, people aren’t even having 1 dc.

Exactly as said in Gary economics

Not everyone on under £40k is being propped up.
My DP is on £30k and claims no benefits.
I used to be on 14k (this was actually 14 years ago), and I was not entitled to any!
But yes, I agree on your point about HB. A lot of the welfare cost is going to landlords.

I disagree with pp that there is no political will to tax big business and billionaires.

same, but as you say you need global initiatives.

I don’t begrudge anyone - including MPs - a pay raise. I am just commenting that whenever the independent body has recommended a raise, MPs have always voted in favour of it. It would be lovely if we could see similar for carers or teachers or nurses…. Or anyone really.

I guess I should just vote that the OP IBU. There is enough money. It is simply mis-spent.

I'm surprised people are angry about spending on defence, particularly in Ukraine. What are the long term ramifications of allowing Russia to invade European countries without any push back?

Of course there is money, we are the fifth largest economy in the world. There was money when the conservatives blew how every many billions on that spreadsheet that crashed and failed to track and trace any Covid, there was money for all of their hare-brained schemes like Rwanda and so on. There just wasn't money for the public services or poor people or disabled people, since they are irrelevant to their little bubbles.