Do you remember what it was like during the 2008 crisis?

[bushproblems]

I’ve seen a few comparisons of today’s economical situation and the 2008 crash. I was in high school at the time so heard a lot about “the credit crunch” but didnt really know what it meant.

Are we in a worse or better position job wise, cost of living etc than my parents were? How were you affected?

Im at risk of redundancy so I’m freaking out about the job market and the astronomical cost of basically being alive!

Lower taxes do not automatically mean lower tax revenues. High tax can inhibit some behaviours that lead to growth.

Business leaders will always say don’t raise minimum wage because they are addicted to government subsidies - eg UC to top up wages that are not enough to survie on.

These benefits are for the employers, not the employees.

Paying workers less than competitors and eroding workers rights is why businesses can’t find or keep qualified workers. Which is why they aren’t “nimble”. It is why the country is having a brain drain to other countries- Australia, Canada, the EU.

True, but the UK 2025 corporate tax rate of 19% for small businesses and 25% for large is average for OECD nations.

In all honesty it didn't affect me much, nor most people I knew. I wasn't working as I was a carer and I continued being a carer. I lived in a council flat in London and it didn't affect my housing situation or expenses. No one in my family or close friends had jobs that were affected. There were cost of living rises which affected everyone, but for me also coincided with gaining more income so overall I was no worse off.

Growth can come from being innovative with the tax system and super attractive to investment and business creators. Infrastructure certainly helps but there is so much we could do ahead of that.

Low energy prices would be a great place to start.

We should also cap the outflow of business creators to the US.

This government has no ambition or innovative thought. They are doing the same old thing that previous governments have done and failed at.

I probably had a very artificial positive experience of 2008. I was young, returned from travelling, made money off a redundancy, got another job straight away, ex h started a business that made money, saved a deposit as we were lucky enough to pay lower than market rent in a family property and bought a house post crash very cheap. Mortgage interest was high but the house price was so low it didn’t really matter. Made loads of money on a short time when prices increased.

This time I have a pretty decent job but a medium size mortgage and lots of kids, things aren’t looking so great.

I’m not just talking about corporation tax. The tax code in the UK runs to many thousands of pages and creates negative behaviour in so many areas of our lives.

One example is the way small landlords are taxed. This change in 2016 has seen many exit the market leading to increases in homelessness and rents. Local councils are paying for people to live in hotels. The courts are backed up with evictions. And to what end? Any revenue the government makes from the tax change is swallowed up by the cost of dealing with the consequences.

Of course landlords are hated so not much fuss is made. But that’s one example of a tax system which is in serious need of reform.

Ok, might have wanted to specify that you were referring to other taxes in a convo revolving around business taxes.

In all honesty, it didn't effect me at all. I'd gone back to university full time the year before as a mature student so was skint anyway. I hadn't inherited anything then either so no money to lose in investments etc.
I met current partner in 2007. He bought us a house end of 2007 at probably a reasonably high price but I had the security of him whereas I'd been used to doing it all myself before.

Growth can come from being innovative with the tax system and super attractive to investment and business creators. Infrastructure certainly helps but there is so much we could do ahead of that.

But we need the growth first…

This government has no ambition or innovative thought. They are doing the same old thing that previous governments have done and failed at.

Its almost like there is no easy fix

I don’t recall being affected at all. We both worked in education and healthcare. We weren’t planning on moving house, we didn’t have savings. We just carried on as normal.

Well there is a fix - which is cutting government spending. However no political party with ever get elected with that as their manifesto.

So it's back to the same policy pursued by both the Conservatives and Labour which is managed economic decline.

Yes public sector didn't have pay cuts or redundancies. They were all bitching about low wages when I'd had a 10% pay cut, got made redundant and then took a job paying £10k less that it took me years to work back up from.

I think that there are two key differences. The first is that the current cost of living crisis is affecting everyone as, regardless of where you shop and what you eat, food prices have gone up. The financial crisis affected some people hugely but others were unaffected and others gained from it. The second thing is the state of the country at the time. The financial crisis occurred towards the end of (and partly as a result of) Labour benevolence. There was still a welfare net and public services existed in a way that they just don’t now. That meant that there were more things for people to cling to than there are now. Now, everything has been so stripped back that I’m not see who or what what you look to for support

@HauntedBungalowits ok working as a nurse in the NHS during Covid had its low points too! I find laying out 10-15 dead bodies a day starts to put a damper on your work life balance!

We’d bought a house right at the fecking top of the market with in 2007. Interest only mortgage as we had nursery fees to pay. Nursery fees and mortgage were practically the same amount. In 2008 the property lost £60,000 or £70,000 of value putting us into negative equity. Thankfully the interest only mortgage was for a chunk of time. We didn’t stop paying interest only until our second child started primary in 2015. 😱 fortunately value had recovered enough for us to afford to move to a repayment mortgage. For various reasons we still have 19 years to pay on our mortgage (right up to retirement basically) but at least the LTV is now in our favour. We own 60%.
The credit crunch as was totally changed all our plans and held us back about 10 years I think.
if it hadn’t happened we’d have been able to move to repayment much earlier and would be so much further down the line of paying that off. I’ve never really sat down and worked that out. Huh. That’s a bit shit actually.

@USSAthena and someone on a different thread was wondering why more people don’t just have interest only mortgages and plan to use equity to pay it off. This is the reason they don’t.

@rainandshine38 well the lending criteria for an interest only mortgage is much stricter now.

One of my relatives had an interest only mortgage for years, it enabled them to buy the bigger more £££ house. The house is worth many multiples of what they paid. The landscape is so different now

What do you mean ‘we need the growth first’? Growth comes from freeing up the private sector. Governments do not create growth themselves, they allow others to do so.

There is no easy fix but there are fixes. If you can’t imagine that, we are all fucked.

The conversation was about growing the economy by lowering taxes. You were the one who mentioned corporation tax specifically.

I was fine, everyone I knew was fine. There were some grocery price rises which i remember seeing and I think maybe utilities went up a bit. But our mortgage was fixed, we didn’t have savings in the stock market. We both had jobs.

I think it’s worse now. Seems to be less jobs overall and more inflation.

It was nothing like now in terms of cost of living. The years of austerity and cuts to public services were terrible though and have left deep scars in our economy and society.

Prior to 2008 I bought a small flat. Minimum credit checks. Got 110% mortgage which helped furnish the flat. Then sold a year later for twice what I paid. Life was good.
after the crash I sold again to upsize to a bigger place. The housing market was stagnant. We sold the place for what we bought it for , thankfully not losing money. Mortgages were much more difficult to come by. But muddled on and tried to be frugal

Personally i was temping in professional rles and did get let go rather suddenly from one( was supposed to be there a year) but still managed to get other work relatively easily. Compared to being out of work for 6 months in 2024 and it felt much much harder to get back in employment.

The 2008 crash felt like it progressed through the worst of it a lot quicker and a couple of years later the recession was over, whereas now seems like it is going on forever with no end in sight and doesn't feel like a recession so much as a reset.

I'd say now is much worse, due to the lack of hope that we will come out of it any time soon.

@TeenagersAngst I’m not sure what you are confused about. Before we tinker about with the tax system (which does need overhauling) we need growth and as I said that needs to come from investment which requires a lot of money. The issue is we are stuck & as I already said an ageing population puts more pressure on public services.

There is no easy fix but there are fixes. If you can’t imagine that, we are all fucked.

And yet no government has managed to implement these fixes 🤔

To attempt to fix things would require radical change and a lot of the electorate will simply not vote for the changes needed. We are fucked!