The UK has borrowed too much money, has a massive debt - £105 billion goes on paying our debt interest

[cakeorwine]

A good visual guide from the Guardian

https://www.theguardian.com/uk-news/ng-interactive/2025/mar/24/visual-analysis-how-the-markets-boxed-in-rachel-reeves

But basically, the UK has had to rely on borrowing money as it spends more than it brings in.

It has borrowed money at low interest rates - but these rates have increased.

£105 billion on servicing debt interest. When you are borrowing a lot of money, even a small change in the interest level will massively increase the actual amount of money we need to pay on interest

Some context from the OBR on the budget

https://obr.uk/forecasts-in-depth/brief-guides-and-explainers/public-finances/

Income: £1149 billlion
Spending: £1276 billion
Of which £104 billion is on interest payments
Deficit: £127 billion

We need either more income, less spending and reduced interest payments.

www.imf.org/external/datamapper/GG_DEBT_GDP@GDD/CAN/FRA/DEU/ITA/JPN/GBR/USA

Stop whining? WTF? It’s not whining to query the tax payments large international corporations make. It’s not unusual for global businesses to use loophole and tax breaks to siphon money off shore. It was a pertinent question.

Last year Amazon paid corporation tax for first time in years. They had tax credits the previous years of over 100% of infrastructure investment, set up by Sunak. I’m sure they could afford to pay more.

It’s not a loophole. It’s international tax legislation. The OECD are working hard to fix this but currently Amazon are doing wrong.

what I find REALLY tiresome with comments such as yours is that you assume that HMRC haven’t thought of this, or are in some way happy to let the likes of Amazon off the hook (laughable) and you seem to think this will fix our funding issues. Guess what - it won’t.

The answers to better public services (which I’d love!) is an increase in basic rate income tax and / or VAT. Oh shit, that mean you’d have to pay (and everyone else in the UK). Not so keen on it now are you? Chucking the ‘Amazon’ argument in deflects from the real problem and the real solution to the problem, which is every single person in the UK paying more tax.

Clearly we borrowed a lot during Covid, and interest rates have increased since then - so debt interest as a percentage of Government income has increased massively since 2020 but is coming down.

It's still very high

In 2020, we paid £20 billion in interest payments.
£111 billion in 2022 - 23

And yet we feel the need to be responsible for the well being of every person on the planet. I do not feel the need to give aid to any country unless there has been a natural disaster. Our schools are crumbling therefore i do not feel the need to build one in some far flung country. Borrowing to donate is sheer madness.

Data source on actual interest payments and percentage of GDP payments

https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/debt-interest-central-government-net/

I think it's more useful to look at the actual ratio of interest payments to tax income. We have choices to make about how we increase our income / reduce our spending etc.

I presume there are consequences if we don't pay the interest to people they expect. And it's not like the Bailiffs can come round and take stuff away

Yep borrowing for that wasn’t a good idea. And NI increases are a tax on work which is a bad idea when you really only have growth to get things going. That’s halved now.

Anyway all you can do is see what they’ll do next. A gov that didn’t get the importance of the private sector wasn’t a good idea, but there you go. Reeves it is.

And then they would just move their headquarters to another country, and probably stop employing the thousands of people that they employ in the UK.

It surprises me - UK is definately richer than Venezuela or Greece. It has looted other countries for centuries It has trillions in assets and treasure. Why not sell some of these?

Why was he promising tax cuts then? And why did he implement an unfunded NI cut? He certainly understood actions have consequences when he salted the earth for the incoming government.

Liz Truss was gone within days.

Rachel Reeves is still wrecking the economy.

Why didn't Labour promise to undo it as part of their manifesto then if it was so bad ?

Part of the reason they are in the position they are in now is because they wouldn't be honest about taxation and spending.

Now they are in a position where a Labour government is cutting services and benefits to the vulnerable because they have to operate within their own election promises.

Labour are effectively operating as a Tory government at the moment.

Yep, labour could have reversed the NI cut if it was so bad and unfunded. As they did with other tory policies they didn't like.
Instead, they've chosen to go after the elderly and disabled rather than admit that the budget was a massive failure.

Agreed. We wouldn’t be in this mess if both main parties hadn’t been promising unaffordable tax cuts in the manifestos. Does anyone want a tax cut more than they want better public services? £5 a month better off, or an ambulance within 5 mins if you are having a heart attack? You’d take the ambulance every time. We’re not fools. Stop treating us as idiots.

IMF bailout incoming...?

I don’t disagree. I used it only to counter the argument that Hunt was a competent chancellor.

The thing is, if you tax a business more, that almost certainly goes on to the consumer, not the business. If the business cannot operate with the increased level of taxation it goes bust.

There is an easy way to tax companies like Amazon more. That is to put a delivery tax on them, so every parcel that is delivered to a UK address gets a tax imposed on it. That is unavoidable. However, the public would see that as a tax on them, not a tax on Amazon and probably go nuts about it. So the government won't have the bottle to implement it.

I'm not sure that it is possible to get everyone in the UK paying more tax. The bottom end is taxed out. It is the middle ground where there are opportunities for taxation. Probably I would say on housing. Housing is a great way to tax people as it is immovable and the asset stays in the UK.

I like your delivery tax idea.

Stamp duty and council tax need to be binned and a tax of 0.5-0.7% of house value needs to be introduced instead. Stamp duty has been shown to be incredibly bad for growth.

I agree with that.

When people move there is a cascade of spending. Estate agent and solicitor fees. Builders, painters and decorators. New furniture and appliances. This is money churning round in the economy generating economic activity. It is better for this money to be say spent in the economy that reside in inflating values of bricks and mortar. Stamp duty dissuades people from moving and therefore lowers this activity. You are also basically betting that the reduced stamp duty raised can be spent better into the economy by the government through taxation - a tall order since governments are notoriously rubbish at doing anything.

We need a tax free rate for housing, maybe 200K, then all value above that taxed and doubles for second homes and landlords. No one needs a second home. Housing in this country is partly in crisis because people with money keep buying up property and that needs to be heavily penalised if we all want a place to live.

You want to tax housing?

There are so many house owners who are cash poor, many of the elderly.

Do you want them to lose their homes? Moving is costly and difficult. Also, why should they have to lose their homes?

What about council housing, who will paymthe tax there?

This is how all governments function. It is not like a household budget.

Yes of course. Sorry to be blunt but it’s true that many pensioners are living in houses too big for their needs in this country. We need to tax behaviour that is bad for society. It is bad for society not to make most efficient use of housing stock.

However - when you are spending £105 billion on interest repayments and you are having to borrow £120 billion because of a deficit and you have an income of £1100 billion from tax receipts, then that's a big percentage of your Government spending and borrowing going on debt servicing.

I think Jeremy Hunt knew exactly what he was doing. Knew the Tories would lose, so left a bad situation for Labour, in the hope they would have to make unpopular decisions and give the Tories a chance in 2029 of at least having enough seats to deny a second majority for Labour.

The real damage was that the amount needed in 2020 and 2021 to support the economy was much greater than should have been the case, given the dubious Covid procurement, things such as Eat Out to Help out, cheap bus fares and above all that furlough payments could have been at least a third less had there been a prompt response in March and September 2020.

You are happy for people to lose their home and their support network?

Moving at an advanced age is very stressful.