AIBU to very nervous about what Reeves is doing to the economy?

[ProudAmberTurtle]

The data for the last financial year is out and, for the first time in British history, the benefits bill (£333 billion) was higher than income tax receipts (£331 billion).

This didn't even happen during financial crises like when the banks were bailed out in 2008-09, or during Covid when the government paid private sector staff's wages.

What's worse is that the government did not predict this and the benefits bill is projected to rise significantly over the next three years to about £390 billion.

In fact, from what I can understand, income tax receipts have always been significantly higher than the benefits bill, and there's always been an understanding between the two main parties since the 1940s that that needs to be the case for an economy to function properly.

I've worked very hard for more than a quarter of a century and always plan for the future, ie paying the maximum in NI so that my partner and I will receive the full state pension. For the first time in my life, this year the amount I'm earning in savings is going up at below the rate of inflation, even though I've got the highest interest rate available, because I've hit an income tax threshold (£50k) which means 40% of everything I gain in interest goes to the Treasury. This means my savings are actually depreciating in value.

AIBU to think this is just the start? That it's inevitable that taxes will have to rise even further and the state pension will be cut?

www.telegraph.co.uk/news/2026/04/04/labour-welfare-bill-income-tax-revenue/

Why mn for this

Nail on the head there. We definitely need to be copying some other European countries in terms of both their healthcare systems and also their benefits systems.

Yes. But that's fine. We make our own immigration policy. Though Boris truly scuppered it up on purpose.

Happy to have it visa free for short stays and tourism.

Actually that's not quite accurate. There are different welfare regimes around the world based on different practices and principles. For example the Nordic countries base theirs on proactive poverty prevention, so universal and generous child benefits alongside family friendly policies and protection against adverse life events. The UK has a more compensatory approach while countries like Germany have similar to what you describe. Mediterranean and global South countries tend to have less formal systems based on familial support. It's really interesting to compare the different ways things are done.

My late wife spent time on here calling out bullshit

I'm just carrying on her work

So brexit not just paperwork like you claimed then?

But what if there aren't workers trained and ready to take the slack?

We have severe shortages in lots of trades and professions.

As we know with the NHS, lots of dental surgeries, hospitals, etc simply can't recruit the staff they need, partly because so many dentists/doctors now work part time to avoid tripping the £100k earnings threshold. That increases waiting list times and causes poorer health outcomes, increased benefits claims for disabilities, reduced productivity in workers waiting for treatments etc.

Same with tradesmen, a drastic shortage of qualified plumbers, electricians, garage mechanics, heating engineers, etc., so if one retires early or goes part time, there's no one else to step in to do the work.

Same with driving test examiners, HGV drivers.

There are skills/experience shortages in so many occupations and professions, so it's really not "great for the economy" when the work doesn't get done, productivity and economic activity falls, disability benefit bills increase, etc.

But everyone says the economic costs are due to paperwork with the EU.

I wonder if it's worth looking at proportion of GDP spent on benefits rather than actual amounts? It feels like that would be a more useful measure.
Also worth looking at rights based approaches to benefits/poverty prevention. I was reading up on the UN Convention on the Rights of the Child the other day and it states that prevention of child poverty has to be prioritised, legally. Lack of resources is not an excuse for failure to do this and countries defence spending can be examined if it looks like they're not spending enough on eradicating child poverty. It raises interesting questions about the role of welfare states and whether retrenchment should be the main priority.

@randomchap- well, Brexit has had an effect, but Covid is the kicker. We spent far far too much on furlough (should have been far less generous - the generosity of letting some people get almost a full wage for nothing has fuelled a lack of impetus and dependency and also made public sector workers resentful - imagine a scenario in which people could only get a limited amount and how lucky you might feel as a nurse or teacher being able to go out to work during Covid and how many people might want to get jobs as delivery drivers or in supermarkets…) and test and trace. The amount of debt that is just servicing that is crazy.

Everyone? That's not true at all.

https://drive.google.com/file/d/1e6Ll4p9Sldmg_VTxJR5FGiROC6VeFicp/view

When we left the EU, even people who wanted Brexit (like Bojo) admitted that taxes would have to go up as a result.

You should stop blaming the wrong people @ProudAmberTurtle

Did you vote remain? I hope so.

Yes Covid, too of course.

I always wonder whether people like @ProudAmberTurtlewere happy to receive furlough in your own time of need?

Yep. Covid and how it was handled certainly had an effect too. Again the tories

Also the Tories mismanaged the economy and wasted money themselves - that’s why they lost the election! They just wasted money on vanity projects instead of actual people. That’s ok though?

Fastest vaccine Rollout? Furlough that saved jobs?

Keir Starmer complained everytime there was an unlocking

They didn’t lock down quickly enough. Their first plan was to do nothing.

The point is that most of the jobs available don't allow you to support yourself, let alone a family without state assistance. Wages are too low, housing costs are too high.

So a time limit would only help if after a certain time, your employer would pay enough to live on. But whenever there is even a sniff of the NMW going up by pennies an hour, the country cries out that its a blow to business and its not affordable. So what is the answer?

Leon co-founder is going to join other businesses today to say Labour have killed the restaurant trade and is a complete and utter disaster for the hospitality sector.

Ik you like to ‘call out bullshit’ as you put it to women on here but it’s surprising anyone is wedded enough to Labour to not see the impact of their policies, still.

Brexit and covid and Ukraine and Truss. And never really recovered from 2008.

How quickly people forget.

Scandinavian income replacement payments to those made redundant are 75%~ish of salary for many months. This would actually help people find a commensurate role rather than taking the first thing that comes along while in a blind panic. And it would show appreciation of the taxes paid by them in the past.

I haven't been able to afford to eat out regularly since coming out of Covid. I don't think the restaurant trade was rip roaring before July 24.

A new study led by researchers at King’s Business School, Stanford University, the Bank of England and the University of Nottingham finds that Brexit has left the UK economy significantly smaller than it would otherwise have been.

Drawing on almost a decade of economic data and evidence from one of the UK’s largest surveys of senior executives, the Decision Maker Panel (DMP), the study estimates that by early 2025 GDP in the UK economy was between 6 and 8 per cent below its pre-Brexit level.

Business investment is estimated to be between 12 and 18 per cent lower than the counterfactual path had Brexit not occurred. The authors describe the Brexit process as a long and protracted shock that depressed investment, restrained hiring and reduced productivity growth.

https://www.kcl.ac.uk/news/new-research-finds-uk-investment-up-to-18-per-cent-lower-as-a-result-of-brexit

I'm not wedded to anyone's policies. But am quite happy to lay the blame at the feet of those who deserve it.

Brexit was a disaster for the hospitality trade due to the loss of freedom of movement. The minimum wage increase hasn't really helped either

When this letter comes out would you mind linking to it?

Also, just for clarity. I don't call out the bullshit to women, just the bullshitters.

It’s a radio interview I heard the lead in, googled and only one headline came up I’m sure it’ll be picked up after it’s aired. If you google John Vincent / Leon you’ll see that headline, but it has copyright.

Times Radio today or R4 today can’t recall which I was listening to.

He is laying the blame at the feet of Labour. I think a few bought the lies pre GE and probably even voted for a party that would be ‘good for business’. 20 odd months in they can see how the poor policies are impacting them.

As said below no vote for Brexit here, but Labour is adding to it.