I don't think we are a rich country anymore

[ThisHairColourIsTooDarkIThink]

I've been feeling for a while that the country is in a bit of a mess financially.

Are you feeling this and cutting back where you can (I know I am).

Telegraph headline today
Rachel Reeves ‘heading towards 70s-style IMF bailout’
Economists warn of 1970s-style debt crisis unless Chancellor changes course

I think this is why people are so up in arms about the inflow of all these young men from abroad seeking refuge.

Nobody minds helping others when we ourselves are sorted.

Lets be honest though - it's hard to get an NHS dentist or a doctors appt. Our police are falling apart (which is very scary given what they keep at bay in society), ambulances don't come fast when you have a genuine emergency, housing shortage, food prices rocketing etc.

How can we help all these people when we can't even sort out ourselves?

Anyway watched a few things recently and alot about our economy being in serious shit. It seems we are indeed in a position much like the seventies.

So I just wanted to know if others are feeling like we are on a bit of knife edge and are you all cutting back financially to 'brave the storm'

Yes it’s unsustainable and I do think we’ll be looking to the IMF next year. I don’t really now what Labour are trying to achieve to be honest, their taxes seem more like a spite hit list (education tax, IHT on pensions, family farm tax, employer tax) than actual revenue raisers and state spending is ballooning. I don’t think Rachel can keep just doubling or tripling the black holes she keeps finding every year as she might find all those with the ‘broadest shoulders’ have left or just given up.

@SerendipityJane

Well, that’s frankly a terrifying prospect! I would hope that with education this dystopian future is not inevitable. But then just look at the US…

@StarlightRobot but that 140bn includes things like child benefit & childcare which goes to parents who work. Many other countries have universal child benefit, we used to & much cheaper childcare.

And we have just discussed the welfare bill, what about the cost of healthcare.

@hangerup

I can’t disagree with anything you are saying. There is a huge imbalance with how we are taxed and then how that tax take is distributed in the hundreds of millions for welfare and benefits. I do support help for families but the welfare spend goes way beyond this and there are simply too many people receiving payments from the tax taken from net contributors.

Good health is overrated

I don’t really now what Labour are trying to achieve to be honest, their taxes seem more like a spite hit list (education tax, IHT on pensions, family farm tax, employer tax) than actual revenue raisers and state spending is ballooning.

I think they are trying every which way to try and eke out some money. The problem is income tax for higher earners is high.

I don't see an issue with the increased NI on one hand because again this is normal in many other European countries & helps fund pensions & healthcare.
I started another thread about the potential continuing of fiscal drug because I would rather that was lifted and pay more IHT in the future.

Taxes can only keep going up because of demographics and fewer upcoming pensioners will even own their homes or have good private pensions.

The public wants everything but wants someone else to pay for it.

Welfare spending has gone From £66.7 billion in 2020–21 to £141.2 billion in 2025–26, that's an increase of £74.5 billion—a ~112% rise (more than doubling).
Its unsustainable.
Various factors - high inflation, COL crisis, high rents increasing housing benefit but also a surge in PIP and disability related claims.

I should say my home country is a developing country so I know what "poor" looks like. However there's a lot in the middle, and just because we're not poor doesn't mean we can afford luxuries. This is like saying "we aren't eating rice and beans out of other people's rubbish bins like our neighbours, therefore we might as well buy a Ferrari on our £40k HHI"

My perspective as an immigrant on things that British people see as obvious basic rights that are actually extremely expensive luxuries:

• Defined-benefit welfare (i.e. pensioners are guaranteed £X per week, UC is £Y per week) irrespective of contributions
• Needs-based welfare (e.g. taxis for children to school, statutory obligations to provide housing) irrespective of local authority ability to pay
• Energy price caps but also deliberately choosing not to develop energy sources - this is unthinkable to people who know what it's like to live with unreliable power (hospitals shutting down etc)
• State funded care - in what other context would it be reasonable to have MULTIPLE SERVANTS WAITING ON YOU HAND, FOOT AND GENITALS 24/7, servants unrelated to you and with no family obligation to you, unless you were a billionaire?!

This is to say nothing of the way mass immigration is layered onto the above.

IMO too much of the system is expressed as guarantees, so debt is the only option - both literal debt, and immigrants who you'll only have to pay for in 5 years. More of it should be on a best-effort basis. The bulk of spend is usually getting the last 5% over the line. Guarantees force you to spend that instead of focusing on the 95%.

How many benefits would you need to cut to match this level of shenanigans

To avoid bickering, let's call it £1billion instead. The point stands.

https://www.thisismoney.co.uk/money/news/article-1704527/Taxman-let-Vodafone-off-6bn-bill.html

Yeah, I think the big pay rise straight away to large swaths of the public sector, when it’s bloated and its productivity is falling was the first misstep. Raising NIC was the next, fewer jobs and fewer taxpayers.

Her primary job should be growing the economy not trying to redistribute income away from productive areas to unproductive ones.

Per capita we're not. Mass immigration will do that.

@StarlightRobot but my point is we have always had lots of net recipients when you look through the decades and at things like average wages, how we had more social housing, families had more dc etc in the past.

And importantly the net contributors calculation includes the cost of healthcare, education & childcare so of course it's normal to have lots of net recipients.

As the number of pensioners increase so does the number of net recipients. A large part of it is the shifting demographics, in the 60s it was 5 workers to 1 pensioner, we are now at 3:1 and not far off 2:1 hence why no government has tackled immigration seriously & used it as a short term fix.

Pensioners are taxed at the same rate as workers.

Before Brexit EU immigrants were net contributors to the UK economy.

@OneAmberFinch absolutely benefits should be linked to contributions & I agree there is a big issue around people not waiting to pay for their care.

@Kitte321 but again most other European countries have seen increased spend on sick & disability benefits post pandemic.

We absolutely have a problem with not enough affordable housing and funnelling tax payers money into private landlords but the only way out of that is more spending

Her primary job should be growing the economy

We haven't had proper growth in almost 20 years though so bit of a hard thing to achieve perhaps impossible?

Pensioners are taxed at the same rate as workers.

They don't pay NI if working which is ridiculous

@hangerup

I think we diverge on this- the welfare bill has ballooned in recent years and this is not all attributed to pensions

Our biggest burdons are our aging population and financing our debt, which increased massively during the pandemic. Just think of all that furlough money given out - in many cases fraudulently - plus all the bogus PPE which was costing us thousands as it wastefully lingered in warehouses, and is possibly still stored somewhere, sub-standard and unsellable.

A combination of first Brexit and then Truss reduced our standing in the financial markets and means that our borrowing costs more than comparable EU members. Our rates of taxation are low compared to many similar countries. We just have a biased print media in this country that likes to slate off a government that is doing its upmost to turn our sick economy around. Remember, Sunak would not have resigned and called an election early if he throught he stood any chance of improving our faltering economy.

Yes, there is no expectation of family members to help with support, everyone is an individual entitled to every entitlement. I live in the countryside -no way will you get a taxi around 9am or 4pm -they are ferrying children to school but surely the parents all living rurally have cars, David Cameron claimed PIP towards the care of his disabled son. Rich pensioners get wfa. Benefits interviews are done on zoom. It’s nuts.

@StarlightRobot the problem is the ageing population and how the current crop of pensioners are taking out more than they put in. Shaving off a few bill won't make a dent so we will have to agree to disagree.

Remember, Sunak would not have resigned and called an election early if he throught he stood any chance of improving our faltering economy.

Of course he ran, who wouldn't 😆

So, what’s the answer?

• as you mentioned, contribution based benefits
• remove the triple lock on pensions immediately.
• tax reform around cliff edges to increase productivity
• Re define the nhs. Its scope has widened excessively- we must have an honest conversation about what it can and can’t address.
• increase income tax at lower and higher bands.
• reverse increase in Employer NI, halt the proposed day 1 employment rights.