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/

It's not divisive, if you're entitled to the benefits you get them. You say that it disproportionately goes to people not even from this country. What did you mean by that? Some people may not be born here but they can be eligible through indefinite leave to remain, or a settled asylum claim. Why is this an issue for you? As I explained previously, those on work, family, or student visas have no recourse to public funds

UK personal taxation rates are lower than most of Europe.

Lifting the two child benefit cap disproportionately benefits ...

People from immigrant families.

Evidence? A link would be nice.

No they're not. The UK ranks in about the middle - and it's the highest taxation bloc in the world

And that's a problem because?

They are. All of Scandinavia, France, Germany, Spain have higher tax rates than the UK.

https://taxfoundation.org/data/all/eu/top-personal-income-tax-rates-europe/

We are an immigrant family. Settled here years ago. We've never claimed a penny in benefits. No child benefits, no free childcare. Raised our 3 lovely kids, sent them to grammar schools etc.

We just worked and provided for ourselves.

Even your short post demonstrates how you've benefited from the welfare state.

Stop being so scared of collectivity. We all need to depend on each other; it's how society functions.

We didn't claim welfare.

Who do you think paid for three grammar school educations? That amounts to around £150k.

Do you mean benefits?

The welfare state encompasses more than benefits. You said your children went to state school. Perhaps you used the NHS? Maybe you also availed yourself of other resources provided by the state to ensure a basic, decent standard of living for its citizens.

So yes. Don't be so frightened of interdependence. It doesn't signify personal weakness, nor does it put you in the same class as those you despise.

Does this mean that you didn't claim benefits you were entitled to? Or did you have no recourse to public funds?

We earned too much and didn't qualify

For benefits.

Well it's good that you checked whether you were entitled to claim anything. No shame in investigating whether there's anything that could make your life easier.

That put you in a minority. Not everyone can earn like that.

What happened to equality?

The people needing the benefits getting the benefits seems pretty equal to me.

The link literally shows the UK in the middle!

Nineteen countries in Europe have lower personal taxation levels than the UK and several others have the same.

I'd like to know what that poster meant by "non British citizens" too.

Meh, the hospitality industry was one of the biggest beneficiaries of covid support money. It survives on government handouts tin the form of income subsidies to low paid, zero hours workers. Now its asking for more tax subsidies compared to other businesses.

I disagree with a number of the changes which have made it more expensive and difficult to employ someone but wholesale subsidies to businesses paying very low wages is still adding to a benefits bill and for what? So that people buy more cheap food outside of the home?

The hospitality industry absolutely exploded in the late 90s/00s until many high streets consist entirely of hospitality venues (plus a few service industry outlets). Its probably due a natural reset unless the tax payer is going to subsidise it long term.

Not all pensioners have "worked their asses off".

I'm also "working my ass off" - just for much less reward than those of current pension age due to the insane cost of housing and stagnating wages now.

All benefits should be means tested, including state pensions. State handouts should be for those who need them to live. As a country we can't afford anything else.

This is possibly the stupidest point you have made.

Self ID was and is a matter for the individual jurisdictions. The rules vary from country to country within the EU.

In 2016 the Tory government was enthusiastically planning to bring in self ID (Maria Miller, Teresa May, Amber Rudd, Caroline Nokes and others all strongly in favour).

The Brexit vote had nothing to do with the legislation on self ID in the UK.

But of course your mate in the company of (checks notes) a whole 1000 people thinks Brexit had no notable impact on the economy. Funny that, they must be the only 1000 people in UK tech who hold that opinion - most of the rest were actively involved in and affected by Brexit.

Skill issue

You still haven't addressed the issue of who paid for your children's grammar school education. That will presumably have been the taxpayer. Nothing wrong with that but at least admit that you did make use of public funds.