Is bankruptcy inevitable now for the UK

[BringOnTheHandyMan]

In the most layman of terms the UK is actually broke.

Every month we cannot pay the interest on our outstanding debt and thus have to borrow more. (Note this is not repaying the capital, just the interest)

The rate we pay to borrow used to be quite low and that is not the case anymore.
The bond markets have lost faith in the UK and charge us a rate that reflects it.

We have systems we can no longer afford (welfare, NHS etc)
We have little to no growth
We have inflation issues (so printing money is out)
Raising or cutting interest rates is problematic due to having both growth and inflation issues together
Our politicians are scrapping like rats in a barrel and even prior to that they seem incapable of making hard decisions or even facing up to the mess we are in.

We do actually need a PM that stands up and says okay folks we are in deep shit. We are broke. Actually worse than that. In debt and unable to pay even the interest.
So any borrowing we do must be for investing/growing the economy only. All spare money must be used for paying down debt or investing/growing the economy. That means for the foreseeable future all state funding is scrapped. We would enter a period of being very much a 'poor country' and acting like it. If we worked really hard we might be able to turn it around but it would take years, hard decisions and many, many sacrifices.

Since I can't see any party being able to actually do that. Then I honestly don't see how we can go anywhere except an IMF bailout. Then they will play the tough guys and cut the lot anyway.

I try to plan for my retirement but honestly it's sort of impossible.

For those with public sector pensions I wouldn't be sure you will get it paid
For those with private defined contribution pensions, the stock market is vastly overpriced just now and your pension is likely to fall once the AI bubble bursts.
State pension - yip not convinced we'll be getting that
Costs to be budgeted for - healthcare but how much?
Downsize my house - perhaps but will house prices tumble making this impossible.

Does anyone think that any government (regardless of party) can fix the country. If not what happens. The UK used to have no NHS or welfare so do we just go back to that. How long will it be until the wheels come off?

Lots of threads about which benefits should be cut etc but nobody seems to be shouting that actually it ALL needs to be cut regardless of what hardship it causes.

Majority of electorate and most of our current MPs are too poorly educated or frankly not that intelligent to pay any attention.

Andy Burnham only mentioned in his interview that we should "borrow outside of normal rules" to fund defense and the interest of our guilds jumped. Current madness with Starmer - another jump. Just like that it's added several bn to our interest payments which are already 111bn pa. Any shift to the left - another few percentage points.

Of course left will bankrupt the country - there is no single policy to stimulate growth, but plenty to increase spend and tax more. Markets see it and respond accordingly.

People need pay rises because there has been very few pay rises just 4.5% since 2010, 0.3% pa since the Tories have been in power. 0.3% pa is the lowest income rises have been for 200 years.

House prces have risen despite this. It is in no one's interest to allow the richest in society to hoard wealth while the rest of us can barely pay our bills. We could afford a good NHS free at the point of delivery, decent wages, investment in our Rail, Water, Buses etc IF we taxed the richest fairly ie in the same way we tax everyone else.

The number of billionaires here has doubled since 2010.The average wealth of a Rich List person is more than 7,600 times higher than the average UK household. It makes no sense to keep the bulk of the population so poor that they cannot spend on the. things we do produce so our firms go bankrupt. Greed by business holders leads to their own bankruptcy! ( Marx's contradictions of Capitalism! btw.) 13.6 million people in poverty in the UK cannot spend to keep businesses viable. Far from impoverishing the UK if we raise wages, we impoverish the UK if we don't.

The TUC is calling for a windfall tax on banks plus an increase in Capital Gains Tax - those with the broadest shoulders should pay their fair share. TUC General Secretary Paul Novak said 'we need an economy that rewards work not just wealth.' Recent polling showed that three quarters of British Billionaires WANT to pay more to remain in Britain. Clearly wealth has not tickled down but been hoarded by those at the very top.

Energy firms made £26.2 Billion in profit in the first 3 months of 2026. Taxing profiteering and wealth fairly could cut energy debts, support struggling families, invest in insulation and renewable energy.

Crypto Billionaire Christopher Harborne who gave £5 billion to Mr Farage, has an estimated fortune of £18.2 Billion ( Rich List 2026). To encourage Mr Farage's in his policies? ( ie to increase his wealth by further impoverishing the people of Britain by eg removal of protections for workers, restricting sick pay, reinstating 'fire and rehire', selling the NHS off to the US so we have to pay fortunes for health care like in the US?)

This is not a left right thing but a confidence thing. Liz Truss got her arse kicked out of No 10 because of her budget that would borrow to fund tax cuts. End of her, though echoed a previous Conservative budget that also did badly for the same reason.

Andy Burnham may talk a good game, but there is no sign actually he’s some sort of serious radical, beyond being called “left”. The markets don’t mind Starmer because he has “fiscal rules” which indicate that Labour will not borrow heavily.

Reeves is having to run a government with a billion here, a billion there to maintain a tiny surplus. I wonder who Burnham’s chancellor would be? Someone should ask

Spot on. I served in Iraq in 1990, and we had a British regiment on our flank. They were great soldiers, but even back then, a bit under-equipped. They didn't have adequate supplies of body armor, for example.

At that time, the BA had 153,000 active duty soldiers. Today, it's 72,000. And keep in mind that in any modern army, only 20-25 percent of the troops are front-line war fighters. The rest are lorry drivers, medics, headquarters staff, communications and IT specialists, armorers, etc. The BA is at its smallest since the Napoleonic wars. It's more of a peacekeeping force now rather than an army.

We didn’t think any government would reverse the two child benefit cap and here we go …

The UK's tax system does need changes. It's been said that it combines the worst features of the American and European systems without their advantages.

That said, you cannot tax your way to prosperity. See the article from the Economist I linked upthread. Your core problem is poor economic growth and low productivity. If you solve those, you'll have the tax revenue to fund a proper government.

We have all sorts of shite rules about paying to turn wind off .

We need British nuclear energy built by British tax payers money to provide a good baseline of energy.
We should allow the plunder the north sea and benefit from the tax. How do Norway do it so their population benefit?

I think pensioners should pay NI.

@ Fantam

Ireland is NOT thriving.

It is fucked actually.

I totally agree OP. Who's going to get voted in on a platform of massive welfare cuts and abolition of triple lock on pensions? No-one. But that's what's required, if we are to have any chance of getting our debts under control.
I'm a lefty by heart, but this is just reality, and I don't know what the answer is!

Absolutely, I don't get this? Makes no sense these days.

This would be a great policy change to signal support for younger people, use the money for direct help to get younger people into work.

If it was means tested then I expect that a lot of people would draw private pensions early, go travelling and enjoy themselves in their 60s, and then draw the state pension when they get into their 70s. People won’t be incentivised to save if they lose out.

They means test in plenty of other countries. Most other benefits are means tested yet millions of us work and don’t claim any…

@NorthXNorthWest the housing market is complex but my point was definitely not too simplistic. Older people with lots of equity are still in the best position to pay stamp duty when downsizing.

Wealth taxes don't work very well and are difficult to administer. They also don't raise much money, compared to the budget gaps people want to fill. Most countries that have tried them have abandoned them. From The Economist:

They have to go after housing as there is too much intergenerational inequality with regards to housing and too much wealth tied up in it. Income taxes on higher earners are already high.

Your core problem is poor economic growth and low productivity. If you solve those, you'll have the tax revenue to fund a proper government.

They can only solve productivity by investing particularly in young people but that means taking money off the old and when a lot of the electorate are old or heading that way how do you sell that to them?

Quote from Alexander Tytler early 1800's:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy"

Actually the biggest driver of low productivity is lack of capital investment in British companies, which is mostly down to tax and regulatory policies.

https://www.productivity.ac.uk/news/what-explains-the-uks-productivity-problem/

I said upthread businesses & the government haven’t invested. A big part of that is investing in your workforce & future workforce.

www.economicsobservatory.com/how-can-the-uk-revive-its-ailing-productivity

It's a multifaceted problem to be sure, and economists aren't in complete agreement about the relative importance of the factors. The article you linked to also points to low research and development spending by British industries, for example.

I think the important takeaway is that what you're doing now isn't working, and there is a lack of political will to address it, even when relatively small policy changes would likely help.

What’s wrong in Ireland - I did read house prices are crazily high?

We need to properly examine benefits claimants not just zoom calls. And we should make cuts across the board so pension, disability, housing allowance etc -a little off everywhere so there are fewer dire headlines and proposals get through backbenchers

Childcare is only for a few years, but it can make people unemployable if they have a large gap in their work history or force them into lower paid jobs than their experience and affect their future earning potential and pension contributions considerably. None of that is good for productivity for the country.

How does that create more housing stock? You are just moving around the problem = More people competing for the same limited housing stock.

Is the US system really any better? Yes, disability benefits are harder to claim but the US debt is even higher than ours and a lower percentage of the population is working - 59% of the American working age population is in work compared with 75% of the UK working population - 16% is an enormous difference in labour force participation and that's not taking into account that such a high number of Americans are incarcerated and presumably not counted in the figures. So making it harder to claim disability benefits doesn't seem to be pushing more people into work. Or that there is actually all that much work for people to be pushed into.

It seems to me that what you're edging toward is simple answers to complex questions.

That's a trap.