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/

1. Austerity reduced the deficit, but the UK was still borrowing every year, meaning debt still went up, albeit at a slower pace.

The bar chart I posted doesn’t show that.

I completely disagree. Many people in the UK wanted out of Europe because all they saw were restrictions, money going into the central European pot and not our own NHS etc and huge swathes of immigrants from Romania, Albania and the like. The mood at the time was quite anti Europe hence Cameron held the referendum.

If you have a basic knowledge of Economics then I imagine you could forsee the impact, if you didn't, were on the minimum wage and waiting years for a hip replacement or whatever, you possibly took a different view.

The war will end. 2027 and 2028 are years that exist. My DC was moreso thinking Abu Dhabi. It's better placed for the career and industry they are in.

how these millions manage?
e.g. this one? AIBU to ask my partner to move out over benefits? | Mumsnet

The mood at the time was quite anti Europe hence Cameron held the referendum.

He was pressured by the ERG wing of his party. It had nothing to do with public mood. In the event only 37% of the electorate voted for it if you count those who couldn’t be arsed to vote.

@BIossomtoes

The 2008 economic crisis had interesting origins some the UK Government could have prevented and some it couldn't have.

It starts with the economic growth of China which was earning significant revenues in Western currencies from its export boom. It couldn't exchange this income into renminbi as this would have crashed their exchange rates making their exports more expensive. So they kept the income in dollars, pounds and euros in Western banks.

These banks then lent out the money to Western governments, mortgages (remember the Northern Rock 125% LTV mortgages), to companies and to individuals.

This created an economic boom that no Government was willing to curtail - no one wants to take away the punch bowl when the party is in full swing!

So who's at fault- the Chinese for not exchanging their foreign income, the banks for being imprudent in their lendings or Governments, companies, home buyers and individuals for borrowing more than they could afford?

The US and Fannymae is where it originated according to most economists. You know the old saying about the US sneezing and the rest of the world catching a cold? We’re watching it play out again in real time.

It's perfectly sensible to say you don't want to be part of a political group that pretends that men can become women

You read one commentator saying how Brexit hurt us and others have articles saying no it didn't, this is how we benefited from Brexit.

Weighing up pros and cons.

I think it's in both parties interest to smoothen the trade situation and ease the frictions. We both gain.

Again, as someone who was an agent for a political candidate at the time and spent an inordinate amount of time discussing the matter on peoples doorsteps, I completely disagree.

"So who's at fault- the Chinese for not exchanging their foreign income, the banks for being imprudent in their lendings or Governments, companies, home buyers and individuals for borrowing more than they could afford?"

Since most of the imprudent borrowing came from low rated and higher yielding corporate bond it was arguable the blame of institutions ,central banks and regulators l.

Ultimately many Institutions took significant risk seeking higher returns which is a feature of financial theory. When these risk led to massive losses government bailed them out . They could have chosen to safeguard only retail deposits not institutional ones.

The cost of these bailouts were passed on to Low earning taxpayers through austerity policies, pensions reductions. In the UK Real terms earnings have not recovered despite this happening nearly 20 years ago. Ultimately resentment at this was one of the causes leading to the Brexit vote, which ironically just made things even worse.

This is a common misunderstanding by many people on the difference between Debt and deficit.
• Deficit = how much the government borrows each year
• Debt = total accumulated borrowing

Austerity reduced the deficit, but the UK was still borrowing every year. As long as deficits exist (even smaller ones), total debt keeps rising.

Year Debt (% of GDP)

2010 ~69%
2013 ~83%
2015 ~86%
2017 ~87% (peak)
2019 ~85%
2020 ~84%

Year Deficit (% GDP)
2010. ~10% (post-crisis peak)
2013 7.4%
2014 5.8%
2015 5.1%
2016 4.3%
2017 2.8%
2018 2.7%
2019 1.9%
2020 2.7%

Objectively speaking, I'm right.

It does greatly, thank you. It proves exactly what I said about a sharp rise in immigration around 97/98 which was the root cause of the desire for Brexit. The Boris wave was non EU and post Brexit so I don't understand the relevance to my opinion that it was the huge numbers of Eastern European immigrants that began to arrive under Blair, that led to a feeling of unfairness amongst certain sectors of UK and this ultimately led to Brexit.

Human rights abuse not a consideration then? If you're willing to disregard the role Abu Dhabi plays in funding the RSF and therefore the Sudan genocide, I suppose not.

I don't think it's entirely accurate to blame the US economy as several countries didn't really suffer from the 2008 financial crisis:

Australia had no recession at all due to its export boom of commodities to China
Canada - had a very mild recession due to strict banking regulations that prevented toxic loans.
Poland
Norway- due to sovereign wealth funds and strong oil revenues.

The OP in that thread is too sick to work and has a disabled child.
I pretty certain that neither of those are a choice.

No it's not sensible at all. In fact it's ridiculous.

The person you 've posted hasn't suggested quitting work to go onto benefits.

They're talking about the financial impact of moving a well paid partner in, who isn't the biological parent of her child, which will leave them financially worse off as they have been declared unable to work either due to their own health, or that of their children.

I posted gov stat upthread - in the last five years 2.6m more people started claiming UC with no work requirements, presumably because of poor health. It's more than 6% of working age population. I find this statistically impossible to be true.

Yes, this posted didn't suggest quitting job, she already did. But she suggested manipulating personal situation to keep multitude of benefits she's having from the state.

ETA: another example of reducing hours to keep benefits:
To drop my hours to 22.5 even though I’m a single parent? | Mumsnet

Another example - having too many children they can raise and thinking of quitting to move on benefits
Do Universal Credit rules require work when you have young children? | Mumsnet

Labour have reduced the LCW/LCWRA portion of UC for new claimants as of this month, so that is being addressed. Although strangely seems to have had virtually no coverage, unlike the removal of the 2 child cap.

On the point about the numbers being ‘statistically impossible’ - how have you reached that conclusion? A rise of around 2.6 million people with no work requirements over five years is significant, but it’s not inherently impossible. Particularly when you factor in an ageing working age population, post pandemic health impacts & increases in reported long term conditions.

Are you suggesting the data itself is wrong, or that there’s some kind of systemic issue in how people are being assessed (e.g. doctors declaring people unfit who are really fine)? Because those are quite different claims and it would be useful to know which you mean.

The OP from that thread is simply putting her children first. No one should be rushed to move someone in with their children just to get off of benefits.

I have no work requirements on UC because I have a disabled child.

The reason for the increase in sick and disabled UC claimants is the migration from legacy benefits.

Her partner was lying to her, and from reading the thread, it sounds like they don't have a great relationship anyway. It is nothing to do with manipulating a situation to stay on benefits. It is in poor taste to use that woman's personal situation to go on about people who are choosing to claim and refusing to work.

Why don't you go an post on her thread instead of trying to encourage a pile on where she can't defend on herself on this thread.

Also, the increase in people claiming UC is in part to people on legacy benefits being migrated over to UC. Where is the headline about the drop in ESA claimants?

Ageing population has nothing to do with this, I'm talking about UC which is for working age only.

It's statistically impossible for over 6% of working age adults, one in 16 people, to be so ill they can't do any job at all, even part time.

Hundreds of GPs tell BBC they have never refused a fit note for mental health concerns - BBC News

There are no assessments in many cases, nothing which can be proven by objective tests like bloods/MRI/CT etc, just your complaints how little you can do because of xyz. Of course this leads to abuse. On the top of very genuine serious cases which absolutely do require a lot of support.