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.

Rented property whether that's council, social housing or large professional companies are still owned. How you decide which ones need to be taxed and which don't?

higher tax isn’t a bad thing. Properly funded services aren’t a bad thing
well educated and well paid teachers, doctors, nurses, council staff, social workers. None of that is bad.
they pay tax, they spend money which brings in more tax.

trickle down economics increases personal savings for the wealthy, it doesn’t build a prosperous economy. Giving poorer people money, it gets spent which creates jobs, and more taxes in.

They have high levels of taxation though.

That leads to other consequences. For example if you tax people more they have less money to spend on houses, so house prices are lower.

The problem with the UK is we have built up structural imbalances over many years of misguided policy, so if we are going to undo those balances it is going to have a severe impact on some sections of the economy.

For example house prices have built up to unaffordable levels based on incomes (mainly because they have been undertaxed as an asset, leading to significant asset inflation as the middle class pile into property). We can tax incomes harder to pay for better services, but that will have a severe impact on house prices as they will become (even more) unaffordable as peoples incomes shrink.

Undoing structural imbalances involves some sections of the voting public undergoing a lot of pain, and it is not clear yet that we are ready for that.

Life isn’t fair. As someone who’s paid all their life I’m all for it.

The current OAPs were perfectly happy to watch entire generations priced out of housing and forced into private rentals. They were quite happy to watch us to be forced through the stress of having to move every couple of years and in my case finally forced out of the region I worked and lived in. Why should that generation be spared any more of the burden that they are causing?

What % of our taxes is being spent on civil service defined benefit pensions? (Most of whom had the option to retire before 60, meaning they could claim for more years than they actually paid in.)
That is a huge huge cost that needs to be rectified. If we are to improve social care for the entire ageing population, in the current economic situation, we can’t be spending such a huge amount of tax receipts on a coddled minority any longer.

Especially if it can be deferred until they’re dead.

our benefits bill will not get better until they fix the housing market.
until that is fixed our countries bills (like everyone individuals in it) will be increasing whilst landlords, and overseas investors get richer.

Exactly!

(There is a joke about trickle down economics... 99% won't get it.)

@GasPanic

Fortunately for the old at the moment the young haven't quite joined up the dots. Maybe one day they will.

Lots have already "joined the dots" and there is growing awareness which is why so many of our young are disenfranchised with the whole thing, lots are planning to leave the UK, and there's the growing anti-OAP mood among the young.

My son works in one of the UK's largest insurers and most of his graduate cohort/peers he works with are seriously planning to leave the UK once they qualify. He's only been there 18 months and has already seen lots of his slightly older colleagues leave within a year or two of qualifying, and says every single one of them has emigrated - none have just moved to a different UK employer or changed industry. It's basically the talk of the canteen with them sharing website links to job opportunities abroad. He has no intention at all of staying in the UK for the long term.

We are only well and truly fucked if the Government ever start defaulting on maturing Gilts because that would mean pension funds like LGPS and Teachers, Police and NHS would start failing, not to mention all the large company schemes.
If it ever got that far we’d have more to worry about than no money, the entire world would be falling apart.

Incorrect, many of those OAP's repeatedly voted for lower immigration and the Crown just carried on importing millions of new inhabitants regardless (the real reason you can't buy a house).

We need to increase tax on "unearned" income, i.e. all forms of investment income, scrap/reduce interest allowances/exemptions, investment income surcharge on rental income, interest, dividends, capital gains, etc.

Stop penalising workers and incentivising savers/investors.

We need to review inheritance tax - I'd go for a lower percentage rate and a lower threshold, i.e. something like 10% on everything over £250k per person - a lower rate but on a much broader population base - a low rate like that would mean expensive tax planning wouldn't be as viable so it wouldn't be worth people taking expensive steps to avoid it.

Increase main rate of VAT to maybe 22.5% or even 25% - lots of European countries have higher rates than the UK. Again, the aim being to spread the burden over a wider range, not just workers!

At the same time, bring in incentives for the disabled and unemployed to either get back to work or work longer hours. Stop the immediate loss of benefits and have a "trial" period where benefits remain in place for a few months just in case work doesn't work out. Likewise incentives for everyone to set up self employment or small businesses - same idea - no loss of benefit for the first few months whilst it's being set up and trialled.

We need to create a shift from those with savings/investments towards those we need to be working and growing the economy by doing something, i.e. making things, providing services, etc., and not just spending/saving.

They need to be means tested
Disability payments only to those earning under 60 Thousand ,for example

Wholeheartedly agree with this!

Care sector and private nurseries spring to mind. If we invested capital by borrowing, we could build the infrastructure to create more childcare and elderly care provision. At the moment there is a lot of money ending up as share holder profits from these 2 industries.
Things like water, transport and utilities clearly need to be taken back in hand.

It is so true that the UK public doesn’t want to pay more tax, the reason being that they are skint, the reason being the astronomical house prices we face. High house prices are just so incredibly damaging in so many ways.

They also paid tax and NI all their lives.

So do we. By the time I am their age I will also have paid in 'all my life'. The difference is I will still be working, unable to afford the cushy 40 year retirement that they have been granted. I have worked far far harder than my parents already for far less at every stage of life.

So capital gains tax on their homes.

Not going to happen. No party will do that.

You are barking up
tbe wrong tree.

Your education and health service have been thanks to the generations before you.

You can’t boy a house because of the explosion in demand that the huge rise In population brought.

Nothing to do with a few pensioners not wanting to give you their homes.

No, not cgt, a land tax every year payable instead of council tax. Pay 0.7% of your house value every year in tax, if you are cash poor this can be deferred and taken from your estate on death.

CGT on housing would be disastrous. No one would ever move house, hoping a new government comes in and removes the CGT.

Am I missing something in wondering what the largest figure, the 332B "other spending" breaks down as.

So many great ideas here, which tax wonks are promoting as the way forward.

The issue is with radical tax and spend policies is that they take time to work and will be unpopular with many so you can only do them when you have large majority and years before you face a general election. Now’s the time Labour, now’s the time.

So CGT by a different name and by the back door?

Do that, lose every single home owner's vote.

Maybe. Going for the private sector at the same time as putting all eggs in growth basket was a bad idea. NI policies cut that growth.