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.

Riiight. So young people are going to buy homes and be taxed on them until they reach a point where they can't afford it any more, and despite having paid for them (with interest) they have to sell up and buy somewhere too small to have grandchildren to stay, as anything else is above 'their needs'?

I realise that many young people never think they'll get old, but - sorry to be blunt - it's that or die young, and forcing older people to sell things they've bought and paid for is only going to appeal to the more short-sighted as a prospect for their own futures. The whole point of a 30 year mortgage is that it will be paid off when you're older and have less money coming in.

OK, so what's your solution then OP?

It's perfectly natural parents want to leave their things including money to their DC and possibly a bit for nephews and nieces. When a person earns money they already pay tax on it. If they save above an ISA limit or invest they have to pay tax on the interest. I totally disagree with death taxation. The boomers will be passing on a lot of their wealth over the next 20 years.

But most housing wealth is unearned gains and hasn't been taxed. It's not productive that what & when you inherit is more important to your financial security than your income/job. More young people will emigrate

I can’t see the problem if it replaces council tax - which is what we’re discussing here.

Most businesses that invest in their infrastructure get capital allowances, it’s not just an Amazon thing. Given the rate at which it has been expanding, fitting out new facilities and investing in automation it’s hardly surprising that it has been able to benefit from sufficient capital allowances to offset its corporation tax bill for many years, like most business in growth. Take a look at Ocado for another example.

So what's the incentive to save into a pension scheme for younger people if they think that means they'll pay lots of tax and get nothing back but if they go on lots of foreign holidays and eat out a lot so have nothing left to save the state will step in and pay for them. I had years of no holidays at all so I could boost my pension. I've never spent hundreds of pounds on DC Xmas gifts. If I'd realised someone like you would then means test state pension why would I have saved so hard? When I die I want to leave my DC secure by leaving them wealth.

The state pension isn’t and never was intended to boost your children’s wealth @caringcarer

I agree, I would pay more tax if the public infrastructure was invested in. Invest in rail, fix the potholes, build modern schools, train more UK doctors, clean up our sewage filled rivers. But I'm not willing to pay more to be frittered away on vanity projects, foreign aid, a bloated Civil Service, giving train drivers more inflation busting pay increases. It's time to fix our ailing infrastructure not waste money on 'soft power' projects abroad. If I pay more I want to see progress.

I'm happy to pay more tax to help those who can't help themselves, and to pay my share towards healthcare and education etc. I'm not happy to pay for others not to work, though (assuming they are capable of doing so), or to have anything I have means-tested away to pay for those who don't pay into pensions as I have done all my working life, even when it was hard to find the money. No thanks - I want my state pension and my occupational one.

The state one is already coming years late because there is supposedly not enough money to pay it when it was promised. Maybe there would be if we didn't pay it to those who haven't contributed. Why should people who haven't paid in get pension credit and all the benefits that brings with it, if those with a few pounds over the threshold are going to be means-tested to pay for it?

I'm hoping it will boost my wealth! I'll use it to live on iny older age. My DC will inherit my house and investments.

And let's not forget Starmers vanity project of gifting away the Charges Islands which are located 1600 miles from Mauritius and have never been owned by Mauritius before. Then wasting tax payers cash renting them back. Just think how all that money could be used to better fund schools. It makes me furious and determined not to pay a penny more tax than I have to because Starmer just wasted so many billions all while depriving pensioners of their WFA and now about to deprive disabled people. I suppose he's going for orphans next.

Yep Chagos is billions we don’t have.

Don't let the facts get in the way of some peoples' rants based on random uninformed comments on twatter or facecloth.

Most Amazon sellers are UK small businesses so they'll be paying taxes on their profits, employing people, etc., even if Amazon siphon off their share of profits to an offshore tax haven. UK PLC still gets the VAT, employers NIC, tax on profits of the sellers, and tax/nic from people working for them.

Corporation tax on Amazon profits is actually only a small piece of the bigger picture.

You clearly understand that - it seems most other people don't!

We are the only G7 country that hasn’t returned to pre covid levels of GDP. And that also includes the EU.

They never seem to tax the big corporations more. Why?

Gordon Brown and George Osborne were both keen on paying off historic debts (much to the annoyance of those of us who wrote essays about them). GB was keen on wrapping up WW2, GO settled the last Consols (which traced back to 1751 and had subsequent issues linked often to war financing). A friend suggests that some debt from the first decade of the 18th Century is still in the general pot... or pit. Best not talk about never repaying a lot of WW1 debt and walking away from it. But be that as it may, it has been normal for western economies to finance themselves through borrowing for centuries now and the UK was a leader in so doing and so much UK economic development and history is linked to that.

Many readers of this post paid taxes that to some extent paid off interest on Napoleonic Wars debts (possibly wrapped up in 2015 by GO). Did it bother you? Well a lot of people didn't know. The state has borrowed in multi-generational repayment schemes and things here have tended to keep on going. There have of course been crises.

So we need to take care when it comes to treating a national economy as if it is a household budget. That's not to say that things are not in a worrying state at the moment. A slow drift, exacerbated by the 2008 Banking Crisis, COVID, demographic shifts and so on plus massive complacency and a failure to have a true national debate over how (and what) things are financed.

I don't think the current UK government is up to the job of dealing with an economy (with both hands tied behind their collective backs because they impose restrictions that are daft) facing various challenges, nor with honest debate leading to some consensus over What Is To Be Done?

What is to be done, is of course both short and truly long term. The debts of the forefathers/mothers get passed down collectively to their grandchildren. That will not suddenly stop.

I'm not sure many politicians are. Therein lies one of the problems: mediocre representatives, with mainstream humans disincentivised from activist political participation.

You can't have different corporation tax rates for different companies. The rates, allowances, exemptions, etc., are the same across all companies. Amazon claimed capital allowances as per the law, which all other companies could claim, had they likewise built huge new factories in the UK, invested millions in new machinery, etc. It's a pretty basic fundamental part of tax law that companies investing in industrial buildings, plant and machinery get tax relief on such investments.

You mean houses, don’t you?

The problem with relying on inheritance tax is that we assume that the elderly won't have to spend it all on personal & nursing care - which are phenomenally expensive. Most recent figures are £7.6 billion tax take in a year- a lovely number but it's not going to solve the UK debt problem. The thresholds are already frozen to 2030 so more people will be dragged up to paying tax which is fair - but personally I'd be looking at measures to pass on my savings to family before I die. How the UK manages after my death is most definitely not my problem.

have to because Starmer just wasted so many billions all while depriving pensioners of their WFA

Do you think high earners are deprived of child benefit & free hours?

The debts of the forefathers/mothers get passed down collectively to their grandchildren. That will not suddenly stop.

which wasn't such as issue but fewer grandchildren and it's not sustainable.

That's very true RR is delivering austerity 2, targeting the old and disabled.

but personally I'd be looking at measures to pass on my savings to family before I die. How the UK manages after my death is most definitely not my problem.

But that is so much of the problem. You want to avoid paying for your care and give money to your dc but they will just end up paying for it in other ways.

I think the USA debt is about 36 trillion