To think the UK economy is utterly broken…

[Paul2023]

Things were never the same after the crash of 2007/2008. Austerity was imposed with the Conservatives in 2010 and things never really recovered after that.

Of course we had Brexit and the pandemic.

We’ve had best part of 15 years of cuts to public services, of which we saw services decimated. We’re now seeing the results.

The Bank of England continues to raise interest rates, yet inflation still ain’t coming down fast enough. Yet, most people with mortgages and who privately rent ( which is most of the population) will be poorer as a result of this.

I think the county is in denial. The economy is in a poor state and I don’t think anyone in government ( who ever it is) has the answer. It’s just a case of sticking plasters over the wounds to fight another day.

Here’s an email a poster got from his father , from another forum I’m on;

“I hate to be the bearer of bad news, but someone must point out the grim truth facing the UK; we're going bust.

The UK has just hit a new and totally unwanted milestone, as the country now owes more money than its entire economy is worth - and it’s only going to grow as government borrowing continues to soar. The UK is particularly vulnerable because much of our debt is linked to inflation, and the cost of it rises with prices. Inflation is not stabilising because of wage demands, pension and supply chain increases.

It's a major symbolic moment but one that is in danger of getting lost, as the cost-of-living crisis rages unchecked

and homeowners panic over how they're going to pay their soaring mortgage bills.

The government continues to spend a lot more than the nation collectively earns, forcing it to fund everyday spending by borrowing money.

Taxes may be at a 70-year high – and set to rise even higher – but it's still not enough. As the nation gets sicker and older, the shortfall will grow.

We’re a nation in denial. So are France, Italy and even the US, but that doesn't make it right!”

Im just so scared for the future of our kids that I really can’t see how things will ever really get better. There’s going to be a bigger population of older people and less people paying tax. It explains why the government is so keen to get older people back into work!

Does anyone else really worry about the state of the UK?

Can you explain why you think a younger person should be happy to see a chunk of their inheritance go in tax when public spending policy so consistently deprioritises them?
one of the great surprises to me is how the young here are still tracking left, politically, in favour of high public spending. If you look at Europe it’s going the other way, and I’m not surprised.

This.

It has added to the problem.🙄

All their "disaster capitalist" chums will still find ways to make money out of it somehow, they always do.

The Tories have made it clear that they are not bailing out mortgage debtors, and that they need to contact their mortgage providers.

The government back the BofE.

https://www.dailymail.co.uk/news/article-12223281/BoE-chief-Andrew-Bailey-blames-unsustainable-pay-rises-rate-hike.html

You wouldn't have been saying the same thing 30 years ago, because the population pyramid looked very different then. The largest generation we have are the boomers, plenty of whom are still in work despite the way the term is increasingly used interchangeably with pensioners.

Three decades ago, that large boomer generation were all still of working age and the older generation they were then supporting were numerically much smaller than them. This is a new problem we face and it will get worse with time.

This is in addition to the fact that basic living costs are higher now.

From the ashes of a recession the vultures appear , the rich , the bankers , the money men, the politicians who own property outright
those who can play the markets. It's a lot of people.
No talk of a GE , Rishi sunak and his friends will cling on till the bitter end (is my opinion )
They have everything to gain and not much to lose.

That’s absolutely right. Politically Europe is moving firmly right - in some cases far right.

I am concerned there is now an opening given the implosion of the Conservative Party that we might now see this here too. Especially if Brexit was somehow watered down in the future. I would hate to see the consequences of that. I am hoping for an uneasy but nonetheless much needed truce, and to move on.
Thankfully there does not seem to be the appetite at the moment. That’s not to say it won’t happen.

If we come out of this with ‘just’ a recession that will be a blessed relief.

The no appetite comment was referring to the far right emergence not the truce, clearly!

See - if you get "your" inheritance then there isn't money for your education

But you are also exaggerating how much older people get from government-

State pensions costs the government about the same as education for example

Twice that goes on welfare

Divided between 6 pots or roughly equal size
Unemployed
Housing benefits
Disability
Family's
Personal social service
And pension top ups

That’s absolutely right. Politically Europe is moving firmly right - in some cases far right

This doesn’t surprise me and I thought it might, the climate crisis will ramp it up

I mean the whole thing is a fucking mess

But if you just try to grab for yourself and blame others then it won't get better you just get a dog eat dog world where you never win

Structural reform is needed
The housing market needs to be reset ( but this would not be how I would have sone it)
We need social housing so that private homes are homes not investment
We need to tax the rich and that means inheritance tax as well as the super rich

We need to fund the nhs and education and the green economy - it's no good shoring up the front of the house if the back is also subsidising and it's cheaper and more effective to do that using a public insurance model than a private one - ffs in a private model someone is looking to cream off 10% profit for shareholders and 10% for the bosses bonus and 10% for the advertising budget so any private model is wasting a third of its cash just on being a private business

It is hard starting out in home ownership, and in the past it was rarely possible for a single person, just as now

But 30 years ago it was possible, difficult, but possible. Now it's almost impossible to buy a flat or house on a single wage in some areas of the country.

My sister, in the mid nineties, bought a one bedroom flat with her single wage for about £50k, around 3.5 times her wage of £14000.

My DS has a similar job, which now pays around £28000. 3.5 times this would be £98000. A similar flat now costs £230000, or over 8 times his wage.

I don't know why people keep saying that it's just the same as it always was. It's not. It's much harder now for young people to either rent or get on the property ladder.

My in-laws first house, a three bed detached, in the late 60's cost £6000, and they were young people just starting out on basic wages. That same house now costs £600000. I don't know of any young couples in their early twenties who could even get close to that.

If it is all just so easy why hasn’t either party ever done it?

Short answer: ‘The rich’ will just leave in vast numbers for Dubai, Singapore, Bahamas and we will be left with a total brain drain, and no one to pay the taxes you are so keen on!

Next!

It is much harder now than it was at times
The salary : house price ratio as changed dramatically

Much Worse is that people used to have a council safety net which was taken away and simultaneously drove the mess we are in today

The short answer is somethings like most people in power in either side don't have the time to sort the mess out before the next election and are too busy trying tie outright win rather than fix the long term future of the general population which heaven forbid might be seen to be the result of the other guys actions if your results are not quick enough

Something I think PR could go sone way to address as it leads to more hung collaborative government

We are going to see mass migration as climate change hits. We need a major rethink not just tinkering around the edges.

This will get me flamed but I am well informed that it is now just way too late to make any difference now to the climate - we need to innovate our way out. Solutions are required not super glue! We really need to stop the loud protests and start putting our energy into technology and how we are going to manage the changes. What are the U.K. good at - innovation so perhaps now is time to get on the front foot, if anyone has the energy and we stop squabbling.

So you agree that if you tax and over burden the rich it will be a disaster for the country?

Given that inheritance is one of the few ways in which wealth is getting passed down the generations this desire to tax it mystifiés me.
i would also point out that the debate about inheritance tax looks a bit different when you have a child who is unlikely to achieve financial independence, through no fault of his or her own.

I've heard of a lot of young people who are moving to the Middle East to work , they can shed loads in Dubai because of the different tax laws. It's not cheap, but if they are determined they can have a great life over there.
I just feel it's sad they feel they can't work here and have similar experiences and benefits.

Can you explain why you think a younger person should be happy to see a chunk of their inheritance go in tax when public spending policy so consistently deprioritises them?

It’s the estate that pays the tax, not the recipient.

If we're talking about culling unproductive citizens can we please start with the majority of MPs???

I graduated into the 1990s recession. It was bloody awful for many. And then there are those like an ex friend of mine who was totally gleeful about being able to buy a repossession. She's barely had to work since due to being very, very lucky with house prices and now owns outright. Doesn't give a monkeys about renters or those who don't have forty hours a week to spend on tracking down the best mortgage because, you know, they're at work though, practically blames them for being in that position. (Her mother was also very bubblified.)

As for that ruddy PPE course aspiring politicians all study, I have real difficulty understanding what aspects of economics they studied...

The IHT threshold is £1,012,000 for a couple and it is only the excess that is taxed at 40% not 100%.

60% of IHT comes from high value homes, second homes and buy to let landlords..if this tax is distributed back to those who REALLY NEED IT in the form of housing benefits and Help-to-Buy then I think it is a tax that provides a measure of social redistribution.

Except it doesn’t because, as previously mentioned, public spending priorities are skewed in favour of older generations.
it’s simply no good saying to people like me “pay IHT to provide public decent support for kids like your DS.” I know that isn’t going to happen even if I’m bled white. People like him have never been a priority for the electorate and therefore the government and they never will be.

public spending priorities are skewed in favour of older generations.

Do you have any evidence of that?

With respect, this is absurd sophistry. If the value of the estate is diminished by tax the inheritors get less.