Is the UK beyond repair?

[Brrrrrrrrrrrr]

I’m sure plenty will come along to say I’m BU but for the past few weeks I’ve really started to question where this country and our society is heading and whether or not things are ever going to get better and when that might be.

We have economic chaos driven by high inflation, increasing interest rates and a total lack of urgency by anyone in charge to seemingly do anything about it. We have a government in power that seem to have nothing but contempt for anyone that doesn’t resemble their backers, ministers openly mocking critics on social media and a PM who can not remember if he may or may not have had something to do with benefiting from £5 million of Russian money. What on Earth have we become?

Our Health service is being systematically picked apart and left to decay away much to the detriment of those who rely on it or who cannot afford Private healthcare. We have Medical professionals striking because they are underpaid again to the detriment of those who rely on said services, wait lists are through the roof and the levels of care being received are understandably inadequate.

The education sector is a ticking time bomb because teachers are seeing the demands of their roles increase, funding cuts, the behaviour of the pupils start to become impossible to manage and the prospect of an easier life switching to another career too hard to resist.

Food bank usage is at an all time high, not just by those in charge who don’t know poverty but working professionals who can not afford to feed their families because the cost of living has zapped every last penny from them. The reality on the streets of real life Is so far detached from that seen on social media that it’s like looking at a different planet.

It just feels bleak and I don’t see how things are going to change, I’m often an optimist but this is stretching any semblance of light in the tunnel. Anyone else? Is this the type of world you want your children to live in? Surely they deserve better? How can this be fixed?

Yes UK is beyond repair now, Labour will just slow the decline now.

Fixing public services is now totally unaffordable, NHS, education, roads, leisure facilities.... all will cost 100s of billions to fix and we don't have 100s of billions or the skilled staff to work in them nor can we borrow at 5 or 6% interst rates and we aren't in the 70s, with north sea oil coming along!

On Corp Tax, the UK, at 19%, had a very competitive rate for many years, it did not lead to increased foreign investment.... we ve cut ourselves off from one of the worlds wealthiest trading blocs and a huge source of skilled, culturally similar, english speaking workers.

People are resistant to hearing how lower taxation can work for a country. It’s not an informed position.

They won’t vote for it. But not being competitive will have a comparative negative impact long term.

European countries, doing far better than the UK, have higher tax rates and less wealth inequality, there is no point having low income taxes if you have to leave the workforce because you cannot get healthcare or save a few '00 on tax, only to smash up a wheel etc on a pothole.
Or go to beach and become serious ill because you and your kids swam in raw sewage.

There is an argument for lower business rates and specific business support but we aren't doing that, the opposite.

Instead we ve a right wing Tory Govt increasing CT rate to only 1% less than Corbyn proposed!!!! & as i said, UK had a very competitive CT rate for 7 years and it achieved little.

There was a reason Maggie fully supported the SM and EU membership, she realised it opened up the UK to the world, as an English speaking nation able to access a 500m pop. , wealthy trading bloc.

Yep. The time to borrow to reform and modernise our public services, energy security, infrastructure etc was after the GFC when the Government could actually borrow money at a profit. It's screwed now. Too many unskilled and sick people, everything crumbling, brain drain, no industrial policy or support for startups and growing businesses, no food or energy or water security policies, cut off from our largest market costing us an extra £50bn per year (nearly a billion pounds per week yet we can't afford 1/10 of that to uprate public sector pay by half of inflation?!), state pension and public sector ponzi schemes with unpayable liabilities, 40% of working age people claiming benefits of some kind, no plan for technological transition, what little natural resources there were depleted and the money wasted, enormous trade deficit that has quadrupled since Brexit to 8% (!!!) so that the country cannot fund itself without foreign investment but punitive taxes on companies and our most productive PAYE earners so that there is no longer an incentive to work, while narrowing the tax base so much that the whole thing is unstable.

I suppose if someone with a brain and unhindered by vested interests funding their "political party" was put in charge right now it would be fixable, just, because it's obvious what needs to be done. ^^ But that won't happen, so...

punitive taxes on companies and our most productive PAYE earners so that there is no longer an incentive to work, while narrowing the tax base so much that the whole thing is unstable.

Agree. Talks of higher tax for the most productive won’t encourage them either. High tax on middle earners but lower on corporations won’t wash with voters and middle earners are struggling already anyway.

We’re not going to come out well in a higher tax country. If that’s what Labour want it’s going to be a decline all right.

Narrower tax base, as much as it feels good momentarily for the see ya crew we don’t need you, is going to bite in the long run.

This isn't quite true: people earning £50k- £150k on PAYE in the UK pay some of the highest taxes for that earning bracket in Europe, especially once you factor in childcare (subsidised in most countries but child/ childcare support withdrawn in the UK at these earnings levels) and student loan repayments (which most of those countries don't have, and if they do certainly not with a marginal tax rate increase of 9% for repayment).

The difference in those tax systems that can fund services properly are four main things:
a) those earning below £50k pay far high effective tax rates. Our raising of the personal allowance so high that many pay no or very little income tax at all is not consistent with well-funded public services due to the sheer number of people in this bracket compared to higher earners: there is no way it can possibly be done unless they all pay significantly more in tax;
b) higher taxes on the truly wealthy i.e. those with capital and earnings in dividends, not employees. And also cracking down on higher earning self-employed people who pay next to nothing in comparison to those with the same earnings on PAYE;
c) end the huge discrepancies and disincentives in the tax system e.g. the punitive rates at £50k-£60k, and from £100k-150k which - if people have children - result in marginal tax rates of 85% up to well over 100%! Nobody will work for free, or to be poorer. This destroys productivity and no other country has a system that makes marginal tax rates jump around like this to disincentivise work/ taking promotions;
d) Remove the penalisation of single adult household by giving them the same thresholds and allowances as two adult households with the same income. The current system penalises single people and lone parents in particular and exacerbates of low skill, low productivity, working at less than capacity economic situation, creates additional (expensive) poverty and welfare reliance and health problems and costs us far, far more than sensible systems that do not tax a household more on the same household income due to household structure.

@Alexandra2001

On Corp Tax, the UK, at 19%, had a very competitive rate for many years, it did not lead to increased foreign investment..

No surprise when Ireland's rate was a lot lower and it had all the benefits of the UK, i.e. close proximity to mainland Europe, easy transport links to the UK, etc. Why would any global firm base themselves in the UK and pay 19% when they could place themselves a few hundred miles away and only pay 10%.

Been that way for 100 years since Labour wiped out the Liberals and continually refuse to try and bring in PR voting.

@SolarPoweredHuman

Remove the penalisation of single adult household by giving them the same thresholds and allowances as two adult households with the same income. The current system penalises single people and lone parents in particular and exacerbates of low skill, low productivity, working at less than capacity economic situation, creates additional (expensive) poverty and welfare reliance and health problems and costs us far, far more than sensible systems that do not tax a household more on the same household income due to household structure.

Back in the 80s women wanted "independent" taxation and that's what we've got.

Unfortunately, it would have been better for women to have campaigned for "household" taxation, which could have been similar to the prior situation of a wife's income being taxed on her husband - rather than a major change, it could have just been changed from "taxed on husband" to "taxed as a couple" which could have opened doors for a more modern, progressive "household" based tax system.

But even a "household" base has problems, especially where one partner doesn't want the other to know their full financial circumstances. Lots of people complained re the child benefit clawback that they didn't know whether they or their spouse was the "higher earner". Any form of household based tax or benefits requires honesty and openness between the partners, which can cause problems if it's an abusive or unhappy relationship.

The first Labour government took office in 1924 having defeated the Conservatives. The last Liberal government was in 1906. You keep pushing this fantasy version of events @User135644 and I have no idea why. What relevance does early C20th politics have to what’s happening now?

The voting public don't help either. Too many vote for who they've always voted for, or who their parents/friends vote for without doing any research or critical thinking. There was also a golden opportunity to start down the path of electoral reform with the referendum during the coalition government, which the public voted strongly against. Realistically, we're not going to see any meaningful changes for at least a generation, and it will continue to be useless Tories and against useless Labour, with neither party being brave enough to tackle the big issues.

The country is only saveable if it keeps out the Tories. Labour have done a wretched job of that for 100 years with the exception of Tony Blair (who himself carried on too much of Thatcherism and it was under Labour when the housing market got out of hand).

A moderate Labour under Starmer for 5-10 years to be followed by the Tories back in to ruin another generation is unacceptable.

I've no interest in anything Labour have to say until they pledge to bring in PR.

There's no problem about it forcing people who cohabit to share finances or disclose financial information to each other, that's a myth. They carry on exactly as they are now, with an allowance each, same individual thresholds BUT with an opt in system to transfer unused allowances between them if they wish. Then households with just one adult get the same overall tax free allowances/ earnings before higher rates are levied as the couple. It would have no impact whatsoever on married or cohabiting women, whether they share finances with their partner or not.

It's very simple to implement and has been proved to work for decades in other countries, does nothing to impinge on women's financial independence and would allieviate a lot of poverty of women and children. It is hugely discriminatory and costs far more than it saves.

And agreed: corporation taxes need to be far lower however, with much stricted controls on transfer pricing to prevent profits being moved elsewhere. And there needs to be far more support for startups and growing small- to medium-sized businesses, as part of a proper industrial strategy for key growth sectors and linking up businesses to education and technical training like in Germany.

The facile view here from politicians and the public seems to involve an inability to distinguish between lowering taxes on the companies themselves through corportatiom tax etc, but raising more tax on capital withdrawn from businesses, through capital gains tax.

Simultaneously I'd also implement a system like the US where all UK citizens are taxed on their entire worldwide income at UK rates. Don't like it? Then you relinquish British citizenship.

And obviously rejoin the single market and customs union!!

Government/ proposed new Government wringinf their hands saying they can't do anything when all of these necessary tax changes are entirely within their gift to implement immediately is pathetic, as is their ridiculous refusal to mention the Brexit elephant in the room that has now become so obese it is crushing us all to death. Their answer instead is to propose meaningless, pointless and irrelevant schemes that will make no difference and tell us all to suck up being poorer because of their mismanagement.

It may sound simple to have a transferrable allowance, but even the small transferrable allowance we have now causes a lot of problems. I'm an accountant and it's sometimes impossible to do it because one spouse doesn't know the financial affairs of the other, i.e. doesn't know if the lower earning one earns more than £12.5k or the lower earning one doesn't know if the higher earning one earns more than £50k. In "strained" partnerships it causes problems and people end up not claiming because it's the line of least resistance rather than trying to get accurate information out of the other. Yes, it can work fine if the relationship is sound and open, but won't work in abusive or secretive ones.

I've even had clients who've been hit with the child benefit claw back for several years really annoyed (and some threatening divorce) because the wife told them they weren't claiming it.

We need to deal with those kinds of issues first before we take things further. I.e. if you're going to have allowance transfers, then it needs to be non restricted, not based on earnings levels, just a "free" transfer regardless of incomes etc - and it needs to be entirely up to the "giver" to elect to do it!

So true.

I agree with your previous post too

It feels obvious but not often I read posts along those lines.

But they didn't, they chose countries like Germany Spain, France with CT in the 30% bracket, despite 10% or the UKs 19% we didn't see VW move production to Newcastle or Dublin.

If it were so simple that low CT attracts FI everyone would do it but they don't, even the US CT rate is 21%... has Apple/MS moved to ROI yet?

Tax rates are not the only reason countries locate in country x or y, tax rates are also volatile, companies look at workforce, access to other markets, education/public services for their workforce, few companies will chose a country where their staff cannot get basic healthcare..... or where workers are stuck on unreliable trains/traffic jams.

@user1497207191 I'm an accountant too and if people do not wish to communicate with their spouse and transfer excess allowances to make their household tax level more tax efficient they do not have to. The transfer system would be opt in, entirely optional. If people wished to maintain completely separate finances and financial privacy when cohabiting/ married then they could still do so. The changes I've proposed would have no impact on their situation whatsoever: it would be identical to now, but with an added option to transfer not just the puny "married tax allowance" amount between them but their entire tax free allowance or unused 20% or 40% band amounts, etc. Also very easy to automate through online tax returns for those who did wish to opt in to save through extra transfers but nobody would have to.

Meanwhile, those who are currently being massively penalised by having half the allowances and thresholds of other households with the same income would be on a level playing field finally and given the same allowances and taxed fairly. It's really not that complex, works very well elsewhere and has been demonstrated to improve equality, lower poverty, improve productivity, improve education and health outcomes and lower welfare dependency.

There's no rational argument against it. In fact, it would probably be the easiest policy change a Government could make for the largest impact on both improving society and public finances.

But they didn't, they chose countries like Germany Spain, France with CT in the 30% bracket, despite 10% or the UKs 19% we didn't see VW move production to Newcastle or Dublin.

Germany, France etc have other attractive features like decent infrastructure, skilled workforces, and single market access. Technology and manufacturing is supported through educational infrastructure with high quality technical education and apprenticeships so that the skills base exists. Some car companies did assembly in the UK for a variety of reasons but EU membership with no barriers to trade and just in time supply chains was a key part of it, this will not continue. Germany and France also support many "home grown" medium-sized businesses which are a key component of their economy and were not supported in the same way in the UK, and what we did have has now been royally fucked by Brexit.

If it were so simple that low CT attracts FI everyone would do it but they don't, even the US CT rate is 21%... has Apple/MS moved to ROI yet?

Are you seriously comparing the US economy to the UK economy?

Tax rates are not the only reason countries locate in country x or y, tax rates are also volatile, companies look at workforce, access to other markets, education/public services for their workforce, few companies will chose a country where their staff cannot get basic healthcare..... or where workers are stuck on unreliable trains/traffic jams.

Nobody said they were the only reason. However, if you wish to change things you meed to first address the issues that are within direct Government control and can be done immediately. If any political party is serious about fixing the UK's problems their main manifesto proposals would be to make the tax changes I've outlined above on day one in office and immediately begin negotiations to rejoin the SM and CU. You won't have basic education and healthcare if you can't sort out the economy and the 8% trade deficit. So the economy is where they need to begin. Any politicial party not proposing to implement these things will not be able to raise productivity and therefore living standards.

And while we're at it, economics needs to become a core national curriculum subject alongside English, maths and science.

Absolutely

It’s a low base for voting atm

Economics would be quite useful rather than waiting for alevel etc

Economics at A level is good too but there’s so few subjects to be taken that if you choose maths / fm and a couple of STEM then economics can be bumped out quite easily and then students haven’t really done any at all.

Good to do it earlier I agree

Some posts on here are just too far removed from being informed.