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

331 replies

cakeorwine · 24/03/2025 08:14

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.

The UK has borrowed too much money, has a massive debt  - £105 billion goes on paying our debt interest
The UK has borrowed too much money, has a massive debt  - £105 billion goes on paying our debt interest
OP posts:
Thread gallery
7
mushroomshroom · 24/03/2025 19:58

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

Means testing winter fuel and looking at eligibility of PIP etc is not targeting the old and disabled.

I would vote for targeting stupid people though!

caringcarer · 24/03/2025 19:58

Badbadbunny · 24/03/2025 13:26

Get people working. Part timers to work more hours, unemployed and disabled to work (if they can), discourage early retirement, etc.

To get growth you cut NI for employers, give them tax breaks for employing apprentices to assist businesses to creat jobs and employ people. You know the exact opposite of what RR is doing.

caringcarer · 24/03/2025 19:59

mushroomshroom · 24/03/2025 19:58

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

Means testing winter fuel and looking at eligibility of PIP etc is not targeting the old and disabled.

I would vote for targeting stupid people though!

We disagree I believe RR is targeting the old and disabled and I expect she'll go for orphans next.

mushroomshroom · 24/03/2025 20:00

Yes because everyone knows spending on orphans is where most of the budget goes...

StarDolphins · 24/03/2025 20:05

SirDanielBrackley · 24/03/2025 16:57

OK, so what's your solution then OP?

Not a solution but maybe stopping foreign aid might start reducing it. Then streamlining the middle managers and reducing financial waste within the NHS.

Badbadbunny · 24/03/2025 20:09

caringcarer · 24/03/2025 19:58

To get growth you cut NI for employers, give them tax breaks for employing apprentices to assist businesses to creat jobs and employ people. You know the exact opposite of what RR is doing.

I agree. I recall we had a big push in the 1980s with JTS, YTS, and ETS, where either monies were paid directly to the unemployed to take on work, or paid to the employers to take people on, or for people to carry on receiving their unemployment benefits but being paid a small allowance and their travelling costs. All to get young people into their first proper job and older unemployed back into the workplace. It was a really big initiative and worked pretty well.

I was the external accountant/auditor to a couple of organisations who did the management and administration of local schemes. Both were chambers of commerce, non profit making businesses. The chambers themselves each took on a few dozen unemployed (some school leavers and some older unemployed) to run the scheme, do the admin, pay the wages, manage and pay expense claims, etc. They were really impressive organisations handling hundreds of people on the various schemes.

I remember one school leaver who I worked closely with - it was her first job, on the YTS scheme, and I wasn't much older really, and she was kept on by the Chamber and rose through the ranks to become their chief executive, who now runs it!

We also had "Business Link" very active in the 90s doing all kinds of business start up support activities, assistance with grants and loan applications, even assisting with applications for awards such as Queen's award for exports, etc.

Back in the 80s and 90s, there was a lot of support for business and other organisations to employ people, grow and develop, etc. It's all gone now. A great shame.

But of course until the 90s and 00s, we also had a world class adult education system which has likewise virtually disappeared.

I think current politicians really should look back at the 80s and 90s - there was so much help and support for business, enterprise, growth, employment, etc. It was starting to bear fruit in the late 90s, but everything went pear shaped again in the noughties and it's been bleak ever since.

caringcarer · 24/03/2025 20:10

GasPanic · 24/03/2025 13:48

No one accuses pensioners of plotting anything.

As a cohort though I would say they are slow to recognise intergenerational inequality (this is probably understandable) and be supportive of measures to balance it such as increased inheritance taxation.

Ultimately though it will not be them who decides what is necessary to rebalance the system, in the same way it wasn't them who decided to unbalance it in the first place.

Older people are not all slow to recognise younger people have a hard time. All my friends, every single one have helped their DC get onto the property ladder with gifting deposits, helping to either look after DGC or helping with nursery fees and both I and DH both gift my DC £2k each every year as well as paying for holiday and buying DGC shoes and passports. We also send money every month to my niece at uni because my sister can't afford to give her much. Stop trying to make it sound like all older people are selfish and mean with their money.

Badbadbunny · 24/03/2025 20:11

mushroomshroom · 24/03/2025 20:00

Yes because everyone knows spending on orphans is where most of the budget goes...

Exactly. The areas to target first are the areas of the highest cost, and especially areas with fast growing costs. Like pensions, disability benefits etc.

It's why RR was utterly stupid and wrong to go after low hanging fruit like IHT on farmers, winter fuel allowance, VAT on private school fees - they're mere drops in the ocean and caused their popularity to plummet for no discernable affect on the deficit nor national debt. Basically chicken feed.

She needs to be bolder. But she's not got the balls to do it.

caringcarer · 24/03/2025 20:16

idontknowu · 24/03/2025 12:12

Welfare needs to be massively cut. No households should be on benefits for decades. Make it contribution based and time limited with the exception of the very disabled (as it is in other countries, including Germany, I believe).

The elephant in the room is the cost of housing. The welfare system massively props up rents which makes housing unaffordable to buy and means those that don't claim benefits are priced out because they need to earn so much (after tax) to pay rent. It's completely normal in London, for example, for people on UC to be getting thousands a month in housing benefit help (UC element) which does nothing except make housing unaffordable and line the pockets of already very rich landlords (and the taxpayer basically buys them an asset) whilst artificially propping up rents and house prices.

Reducing housing benefits would reduce costs for everyone as rents would fall if based on ability to pay rather than an artificial floor, free up housing for those that currently have to commute (at great expense) from outside London because they can't compete with London housing benefit (UC element) rates and are not entitled to social housing. The system makes the rich richer and penalises workers who don't get any state help. No wonder productivity is through the floor!

Or people who can't afford to live in London without claiming thousands in housing benefits move to cheaper areas of the country. I couldn't afford to live in London so why should I be paying so much tax so others on thousands of housing benefits can?

mushroomshroom · 24/03/2025 20:18

Or people who can't afford to live in London without claiming thousands in housing benefits move to cheaper areas of the country. I couldn't afford to live in London so why should I be paying so much tax so others on thousands of housing benefits can?

Yes, because London doesn't need carers, nurses, paramedics, retail workers, etc.

How many people do you think you are paying for?

mushroomshroom · 24/03/2025 20:20

All my friends, every single one have helped their DC get onto the property ladder with gifting deposits, helping to either look after DGC or helping with nursery fees

All the old people I know are millionaires ergo all old people must be millionaires 🙄

caringcarer · 24/03/2025 20:20

FatherFrosty · 24/03/2025 11:32

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.

Public servants got an above inflation pay rise by RR along with civil servants in her autumn statement. Why do you want them being paid more?

Annajones101 · 24/03/2025 20:21

mushroomshroom · 24/03/2025 20:18

Or people who can't afford to live in London without claiming thousands in housing benefits move to cheaper areas of the country. I couldn't afford to live in London so why should I be paying so much tax so others on thousands of housing benefits can?

Yes, because London doesn't need carers, nurses, paramedics, retail workers, etc.

How many people do you think you are paying for?

So you don’t understand how the economy works. Subsidizing rents just keeps wages low.

mushroomshroom · 24/03/2025 20:22

@caringcarer why do you want them paid less?

SoSoLong · 24/03/2025 20:24

GasPanic · 24/03/2025 13:48

No one accuses pensioners of plotting anything.

As a cohort though I would say they are slow to recognise intergenerational inequality (this is probably understandable) and be supportive of measures to balance it such as increased inheritance taxation.

Ultimately though it will not be them who decides what is necessary to rebalance the system, in the same way it wasn't them who decided to unbalance it in the first place.

I'm quite a few years away from pension yet, but I recognise intergenerational inequality. It will be much harder for my children to afford a house than it was for me, therefore I'm going to gift them substantial deposits to help them. What I'm not going to do is leave that money in my account to be taxed to the hilt after my death.

mushroomshroom · 24/03/2025 20:24

@Annajones101 😆 Build more council housing then but the answer isn't just to only have rich people in cities...

caringcarer · 24/03/2025 20:25

Badbadbunny · 24/03/2025 11:10

He and Sunak were trying to grow the economy by reducing tax to incentivise people to work, to start businesses, etc. There were green shoots of growth appearing.

RR killed all that with her NIC hike!

Didn't the OBR say the economy was going gangbusters before RR took over?

caringcarer · 24/03/2025 20:35

Badbadbunny · 24/03/2025 11:20

The tax burden needs to be spread more. You can't keep increasing taxes on workers (NIC, student loans, workplace pensions) but leave "unearned" income unchanged for decades, i.e. pensions, rents, interest, etc.

If we are to have any tax rises, they need to be across the board as the base line, i.e. an extra percent or two on income tax or VAT, so that the burden is spread as wide as possible.

Though I'd prefer to see more targeted on unearned income, i.e. reducing the tax free interest allowance, reducing/scrapping the personal savings allowance, reducing ISA allowances/exemptions, a new, higher income tax rate on rental income, (or bring rental income into the scope of NIC), etc.

I'm already paying 40 percent tax on my rental income. How much more would you think is reasonable considering much of it goes on the mortgages, insurances, gas certificates and boiler services, repairs and maintenance? I do realise I'll get some capital growth as house prices rise.

mushroomshroom · 24/03/2025 20:36

House prices in expensive areas are already stagnating, many flats in London have hardly increased in value since Brexit. There are a lot of houses for sale - I think the highest number in a decade.
In the next 10 years the generation who own the most houses are going to start dying and many predict there will be a glut of supply which will depress prices.

caringcarer · 24/03/2025 20:42

mushroomshroom · 24/03/2025 20:22

@caringcarer why do you want them paid less?

I don't want them paid less. Why do you assume I do? I just don't think another above inflation pay rise can be justified.

BIossomtoes · 24/03/2025 20:46

gas certificates and boiler services, repairs and maintenance

These are tax deductible expenses.

mushroomshroom · 24/03/2025 20:47

Because whilst they may have had recent inflation beating rises many are still earning less then they should because of years of wage stagnation.

mushroomshroom · 24/03/2025 20:52

25k in the early 00s is the equivalent of 31k in 2020 & 47k today.

mushroomshroom · 24/03/2025 20:53

And that's before you look at frozen tax bands