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/

Because the people earning more can only do so with the support of the people earning less. Obviously

It’s not the only thing, some realise Labour’s policies cause more redundancies, higher unemployment especially for young people and then more needing state support.

That’s not good for anyone as you get stuck at home and it’s getting harder to find a job.

How quickly the lessons of Covid have been forgotten. It was those “low skilled” people who kept the wheels turning while the rest of us sat in our gardens.

All jobs are essential. We were working and not collecting furlough.

As all jobs are essential, don't you agree that the lowest paid should be paid enough to live on?

Obviously they’re not or furlough wouldn’t have been needed. A lot of jobs are being made redundant by AI and guess what? They’re not minimum wage ones. I predict that jobs which can only be done by a human - which are often the lowest paid - will be those in most demand in a generation or two.

Is that supposed to be a dig at people that were furloughed? Hardly their choice was it. What would you have done if your industry closed down? Just kept turning up daily anyway?

They get paid what the market says they get paid.

Many industries operate on razor thing margins, how will they magic up more money?

The same way people on minimum wages seem to be expected to magic up more money to live on without benefits when they don't get paid enough?

Tesco’s isn’t operating on a razor thin margin. Neither is Amazon. The fact that taxpayers had to subsidise their workers while they pursue eye watering profits is mad.

This. There's actually fuck all reeves can actually do against a backdrop of global inflation, wars, covid, the mental health focus

They get paid as little as their employers can get away with.

Their policies that make it worse for SMEs and jobs won’t help, the opposite.

Not a dig at them at all. I'm saying that everyone's job is essential to them. Like just because the gov says someone job was "essential", it doesn't mean everyone else's job was "less essential".

I'd understand a lorry driver, nurse or care worker being described as essential. Just because an 'influencer' deems their work essential, I'd struggle to find someone in the general population that does.

I know people who work multiple jobs, do extra hours, have extra shifts or a side hustle.

Understand that it's not easy if you have children or have to care for people. But if you're just on your own I think you can at least work hard and strive for self sufficiency.

But after consideration, I realise costs of living have has outpaced wage growth. Housing has been hurt by local opposition and poor planning laws. Global shocks have hurt energy bills as well.

Divide Tesco's profits by the number of customers.

Divide Tesco's profits by the number of staff.

Divide Tesco's profits by the number of stores.

You soon see they're not "eye watering" when you break them down in those ways.

Of course a "huge" company is going to make "huge" profits. But break them down as you soon see the profits aren't that different from much smaller businesses.

But what she HAS done has made things worse for business, especially small businesses.

That's one way to put it, I guess. Like any prices, wages are set by supply and demand. NMW just puts a floor under them. The supply of people who can operate a cash register or stock shelves is high, so their wages tend to be low. The supply of skilled tradesmen is low, so their wages are higher.

Would you pay a plumber more than their normal wages just because you had the money to do so? If not, aren't you paying them as little as you can get away with?

Dividing Tesco’s profits by customers, staff or stores doesn’t change the underlying point it just reframes the same total figure into arbitrary units that don’t reflect what profit measures.

Profit is a total surplus after costs, not a 'per person fairness' metric. If you slice it per customer or per employee, you’re not assessing whether profits are large or small in an economic sense.

More importantly, those divisions actually hide scale effects rather than explain them. A small profit per transaction multiplied across hundreds of millions of transactions is exactly what creates the large headline number in the first place. That scale is not incidental, it is the point of a large retailer like Tesco's business model.

And when people say “eye-watering profits,” they’re usually talking about absolute profits relative to the sector, profit margins on essential goods & the market power that comes with scale. Not 'profits per customer', which isn’t a standard or particularly meaningful economic metric.

Tesco's margins are tiny. So are the other major supermarkets. Absolutely tiny. Some under 1%. Some were loss making a few years ago.

Amazon's margins as well. Profits only look big due to massive sales volumes.

How do we all "know" that their workforce is getting UC top ups? I haven't seen any studies on this.

I didn't say all their workers. But it's inevitable that some will be.

But if you had 10,000 small independent shops each making 1/10,000ths of Tesco's profits each you wouldn't be complaining about their "eye watering" profits. That's the point! What's the difference?

Yes, headline profit figures for Tesco are huge, but they have huge investments in stores, huge amounts tied up in stocks, etc.

You have to scale things to make the numbers mean something.

Most people can't comprehend "big" numbers which is why there's so much angst about the likes of Tesco.

The reality is that your local private owned independent convenience store probably makes more profit per customer, more profit per staff member employed, but because it's a "one off", no one thinks it's profits are excessive!

Well of course not, because they wouldn't have a share of each others profits would they?

You're still missing the point.

What difference does it make if it's a big chain of 100 shops making a total £10 million profit or 100 small independent shops each making £100k profit?

It's exactly the same.