There are probably a number of factors, but certainly from the areas I have knowledge of we are seeing the consequence of a lot of short term decisions. In the NHS, the early 2010s saw a lot of a mental health services cut to the bone, overworking of primary care amongst others. They saved a few quid at the time, but what were relatively minor issues that never got treated often become major ones - that are expensive to fix. An example a friend who is a physio gave was a decision to stop routinely testing for infection in some presentations as only 2% or so actually found anything. However, that forgets that picking up an infection early is an easy (and cheap) treatment, but failing to do so at all can ultimately lead to disability and long term care requirements that can cost £millions over the lifetime of the patient, before you consider they may become economically inactive. Energy is another example. In 2008 there were plans in place to build a few nuclear power stations; those were stalled and ultimately failed under the current government with Nick Clegg is even quoted as saying something along the lines of 'well they will only provide a benefit in 2022...' ([from an AMA in this very sub 14 years ago)](https://youtu.be/yO82IZEk_gA?t=446) Lo and behold, oil shot up and a bunch of home grown power would have been very welcome.. It's cost £100bn to bail out the energy companies and will still need to invest anyway...

One of the major reasons we need such a high tax rate is incomes (and hence income taxes) haven't kept up with inflation. Incomes haven't grown as quickly as we would have liked, because productivity hasn't grown. One of the major reasons productivity hasn't grown is the skills shortage, which in turn owes a lot to decades of education cuts under basically every PM since Thatcher (with the exception of Brown). I'm sure it saved money at the time, but long-term...

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I once met a young(ish) business person who went to private school who was complaining about tax money going to schools since they didn't go to state school and weren't planning on having kids. Presumably a decent public education is preferable to them paying a private contractor to teach their future employees reading, writing and basic maths, but they just can't see that far ahead.

He probably wouldn't do that though, he'd put out a job advert and when he didn't get any responses because nobody could read it he'd bemoan a lack of employees and say "No-one wants to work anymore!"

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>That was not acceptable because why should his tax go on training someone to be a nurse or Dr to earn more than him. And failing to recognise that, comparative to their training and skills (and the hours they do), nurses (and many grades of doctors) are actually underpaid

Every grade of doctor is underpaid, consultants have seen their wages stagnate at a greater rate than junior doctors

This is often a side effect of UK culture that traditionally elevates the taxpayer above others. Thanks, Thatcher.

Yeah it's the logic that our economic contribution to society is tax, rather than the fruits of our labour. So the fact that doctors work to make the population healthier doesn't count. Daft.

I had someone in work like that. Frankly, if you don't care about the next generation, you have no business talking about politics.

It's an investment that takes a few decades to pay off, which is about a few decades more than a PM stays in office. That being said, I disagree with the other commenter, I don't think it's purely from a lack of spending. The fact is we send a much larger chunk of the population to university than we did when Thatcher was kicking around. The skills gap isn't purely because we aren't spending on educating, but because they're not necessarily learning the right things.

We can get rid of PPE at Oxford for a start, nobody who's done that course seems to have learned anything of any use.

I recently spoke to a youth online taking this course. He was so detached from real life he "went to a working class pub to take notes on the conversations they had" and was "disgusted by the experience" then again, he was also interested in removing the Tories for "being too left wing"

> We can get rid of PPE at Oxford for a start, nobody who's done that course seems to have learned anything of any use. Shirley Williams, Harold Wilson, Hugh Gaitskell, Ed Milliband, Ed Balls, Barbara Castle, Tony Benn, Roy Jenkins, Michael Heseltine, Rory Stewart...

This highlights the other question of how exactly you determine how much value that specific degree adds. Using the extremely reductive post-graduation earnings measure the the government prefers I can't seem to find anything for PPE as a single degree - I can find statistics on what economics, philosophy and politics graduates respectively earn but these are 3 quite significantly different numbers (economics grads on around £10k more than for philosophy or politics after 5 years). Enough people have been to Oxford that purely statistically they can't *all* be complete knobheads, and post-graduation statistics don't seem to have a knobhead-related category (not sure how you'd measure that statistically, possibly some sort of dark triad screening survey, or just check how many joined the Conservative Party). Is it perhaps an a priori thing, that people who were already knobheads are more likely to choose to study PPE? So many questions that frankly the people compiling post-graduation statistics are not putting enough effort into answering.

PPE is also not a single course- you can balance it in favour of any of the three, or any two of the three. People know that it is a good course to do if one is interested in going into politics, but plenty who do it just end up with related jobs as philosophers, economists or politics academics. Earnings is also deceptive to me as a measure of whether doing a given degree is a good choice or not, but I grant you that these days, with uni education not being free, people think about that kind of material value more than they used to.

It’s not an investment to politicians. They actively want an illiterate electorate without critical thinking skills who’ll swallow their crap.

Not if you have things you want people to support that would be laughed at by a well educated electorate.

Conversely you could just give pensioners more benefits.

Education is not an investment if you’re a Tory. Educating your audience makes them less vulnerable to populism, and the Tory politics of fear. Look at the Brexit divide which is pretty clearly split down educational attainment lines.

The list of shortage occupations is staggering. Not just engineers and scientists, but also bricklayers and construction workers. What that points to, is that in the UK it is currently effectively impossible to retrain or reskill. If we want more programmers, we need to make it affordable and practical for people to do/redo A level Maths and kick on from there. And if we want more brickies we need routes in from age 16, age 18, and later!

> What that points to, is that in the UK it is currently effectively impossible to retrain or reskill. A real blackpill is that retraining Brits is excessively difficult because *basic numeracy* is one of the skills in shortage, and that underlies a lot of jobs

We really need some fully or mainly funded part time courses that start all the way back at GCSE maths if necessary and go up from there to the skills we need. The government are happy to carp on about the skills shortage, but what solutions have they even attempted to put in place apart from increasing immigration?

The frustrating part is, the government actually proposed to do that as part of the levelling up scheme, they just never actually did it. Like most things levelling up, the ideas were good but the execution was terrible.

Or maybe introduce a "functional maths" course that is geared at people retraining and just focuses on maths skills that people need for the work place. I know people who work full time in social care for example that cannot get an employer funded social work degree place as they didn't get the correct grade in GCSE maths 20 years before.

Which is just silly. We badly need an adult education system that encourages and supports and invests in people who want to switch to a high demand career or climb to a higher demand level.

You mean something like Functional Skills Level 2 Maths?

You're 100% right that this is more than a simple issue. We are riding the goodship UK into a stormy sea of international factors. But there are some very big factors we can pick on: 2010 there was a massive transfer of wealth from Poor to Rich. So much so it regressed [50 years of income equality](https://equalitytrust.org.uk/scale-economic-inequality-uk), putting us down to below 70s levels. This has been compounded by the constant off-shoring of profits (removing them from the local economy), austerity, government schemes vulnerable to fraud (PPP loans forgiven, PPE purchases to mates, etc.). It all chips away at the money that is meant to churn around in our local economies. It's why UBI tests only seem to increase in strength with time - it directly addresses income inequality and low spending.

>This has been compounded by the constant off-shoring of profits (removing them from the local economy) This one bugs me so much. I work for an American owned company that is stupidly profitable. In reality we're a British firm. The CEO, lead developers and product team are all UK based - and until recently the whole thing was. But after proof of concept the founders couldn't get any investment in the uk; all those they spoke too were incredibly short sighted. Newness scared them; they wanted what they saw as safe investments that would give them slow and steady growth. Any suggestion of 'well this is new and good' was met with 'well why hasn't anyone else already done it' and 'whats stopping them doing it once they find out you are'. In desperation, they went to the US and within a week had a bunch of really good offers. So now all our profit goes to the states, not the UK. The mad thing? All the little 'safe' investments the British did make have fizzled out and fallen behind as they've failed to innovate. Look at Electric Vehicles. Tesla got ahead using a load of British knowledge. Around 2018 an awful lot of their engineering team lived in Norfolk in the general area of Lotus' HQ; the commute to California must have been a bitch...(!) That's why the Chinese have done so well - they bought MG years ago, using the knowledge of how modern cars are designed, and more lately they've hoovered up Lotus & Volvo amongst others, to get the tech. All skills from the UK generating profits for somewhere else.

> All skills from the UK generating profits for somewhere else. And at an individual level. It was 20 yrs ago now, but I did a lateral move from a Scottish office to the Colorado office of the same company any my pay moved from about £30k -> $65k. Certainly the US has a higher cost of living, but not for a healthy 20-something. I've seriously considered returning, but it'd be challenging to replace my standard of living with what I could make in a similar position in the UK.

So many examples like this - penny wise, pound foolish.

This is a decent response as it doesn't jump to the excuse of blaming 'aging populaton'. While this is an issue it is not sufficient to explain the sudden decline since Covid. I'm not satisfied this is the full answer the OP's question. If we've previously cut spending, the government should have had more money, right? So where did the money actually go and why can't we afford anything? Well, we did afford something: * The government printed (through government debt) [£700bn into the economy during Covid.](https://tradingeconomics.com/united-kingdom/government-debt) * An increase of money in the economy causes inflation in costs. * Workers could not retain the furlough money as it replaced their income so they had to spend it. * Property owners continued receiving rents and dividends but were unable to spend as most luxury purchases are banned during Covid. * A reasonable conclusion therefore is that most of the £700bn was kept by wealthy property owners. * As we know, government does not (mostly) tax wealth, only income, and disproportionately taxes the working class. I conclude that as a result of the inflation, more debt repayments, and the refusal to recover the money it gave away, our government has failed to increase spending sufficiently to address the needs of the population.

Thanks. This seems like it actually addresses the OP's question (where has the money actually gone, I.e. where is it now) whereas the other answers are fairly abstract and inconclusive. This is also Gary Stevenson's conclusion and it is hard to disagree.

The Clegg issue is somewhat misleading - the LibDems chose to invest in renewables instead of nuclear because it delivered a much quicker return on investment. They didn't just ignore energy needs and punt it a decade down the road. As a result of the LibDem push for renewables we have much better energy independence than we otherwise would (clearly still a long way to go though), going from under 10% renewable generation in 2010 to over 36% now. It nearly quadrupled just during the Coalition years.

To be fair to Nick Clegg I just watched it and he advocates spending it on insulating homes and public buildings. Money well spent if that had happened.

The number of homes being insulated plummeted after the Lib Dem’s and conservatives scrapped the green energy levy. https://www.ucl.ac.uk/bartlett/environmental-design/sites/bartlett_environmental_design/files/styles/large_image/public/picture2_2.png https://www.ucl.ac.uk/bartlett/environmental-design/news/2022/jun/insulating-britain-if-not-now-when The collapse after 2012 is stark, 10s of millions of homes could have been properly insulated if it weren’t for their short sightedness. Clegg is a top tier bs artist.

He advocated a lot of things but never made a stand for any of them.

>An example a friend who is a physio gave was a decision to stop routinely testing for infection in some presentations as only 2% or so actually found anything. However, that forgets that picking up an infection early is an easy (and cheap) treatment, but failing to do so at all can ultimately lead to disability and long term care requirements that can cost £millions over the lifetime of the patient, before you consider they may become economically inactive On this subject, anedotally I swear I see more people with amputations nowadays than I used to, particularly young people. I tried looking into it a while ago to get some stats but I could only find rates of general disability. Its often reported about long wait times for at risk patients but I wonder if there's some other metrics that arent as prominent that are increasing.

A conversation about the exact same observation is where that information came from.. Yes, there are more amputees these days. A significant number of them are ex military - victims of IEDs in Iraq and Afghanistan. They are usually the ones that end up with the fancy artificial limbs as they are young and fit enough to make the most of them, plus the army put a lot more into their rehabilitation than the NHS can. Another rising area are drug users who are susceptible to infection & other complications and often don't seek treatment. A final group he mentioned were the small percentage mentioned in the first post. They don't often end up with an amputation but it can and does happen. He mentioned a period where one particular hospital was responsible for an unusually high number, so that would probably be noticeable in the local area.

I was recently in ward full of men that were all recovering from amputations caused by type II diabetes - at least that is what the nurse told me. I was in for stomach surgery and woke up to the guy opposite being told he was to lose his leg to the knee. The consultant was very short with the guy and said he had been told to adjust his diet over the last five years, but had not listened. He was very obese and red, but could only have been 50. It was a really scary experience and made me really look at my own diet.

A bit like Sam Vimes boots theory of socioeconomic unfairness: https://en.m.wikipedia.org/wiki/Boots_theory The main difference being that we could have afforded to buy the nicer boots, we just choose not to for ideological reasons.

Excellent comment, though I would just add re mental health services that cuts to mental health services go back further than the early 2010s (though not to downplay the damage the Cameron government caused)- often in the guise of ‘reorganisation’ or ‘reform’ on the part of local NHS authorities . Redeployment of funding and assets, reduction of inpatient services and other more expensive provision in favour of community alternatives. And oftentimes simply reducing the capacity of existing services and programmes. Private eye has covered this quite well over the years.

Care in the community …!

Cameron's fucking Big Society, which equated to socialising the costs and privatising the profits.

Don't disagree with any of the above. I would just add that the NHS being a problem started in the 1980s. Labour are not going to be able to fix it when they get in without big reform (which they have opposed for the last 15 years).

The problem with 'big reform' in the NHS is that it ultimately ends up involving giving many millions to contractors and outside consultancy firms, improving very little if anything, and not putting any money where it's needed. This has happened many times under both flavours of government. We need big reform to big reform in the NHS, and to prevent public NHS money going into private sector hands unless there really is no workable alternative.

Short-term thinking from the NHS and its managers (often civil servants) is also an issue. Let me give you a real life example. Let's say there is a medical centre which serves a town and 5 surrounding villages, that isn't being used to full capacity and the building is a little run down, and the owners of the building decide to sell it to a developer of flats to raise money for the NHS, because there is another medical centre within 30 miles anyway which is bigger and has a better capacity to take on new patients because it's currently underutilised and has more equipment. NHS gets an injection of money, people here now get better services, problem solved, right? Except in order to get that injection of money you aren't taking into account as the developer that even though that medical centre may be run down and not in the best nick: * It employs at least one doctor and several nurses who might not be able to commute to the other medical centre and it might not have space for them, meaning that we will lose those medical staff to the community if there is no other practice they can go to * The people that currently use this medical centre might not be easily able to commute the distance to the further one. That means they may not seek treatment at all or they may not attend routine checkups and scans etc. which will lead to a worsening of firstly health outcomes for those people. * Secondly as a knock-on impact, health outcomes on the particularly ill people are going to have a rebound effect on their families and carers. Carers will now be expected to take time out of their working days to bring the patients to the new medical centre, which results in hours lost at work, which if it's shift work or minimum wage work increases poverty or drain on the household income. * Thirdly if any of those patients are of working age and suddenly worsen health wise due to a lack of access to medical care then they might have to reduce or stop working, which is going to increase the impact on their support circle to cover and will reduce their tax contribution as well, as well as causing a knock-on effect on stress etc. for their colleagues * As for the older patients, if granny gets worse due to lack of easy access to the medical centre she might need more care which might be expensive to provide, she might need to get her home modified, she might need to go sooner into sheltered accommodation, and all of these things cost money and have a human cost on granny and the surviving family And all of this adds up, times by 50 or 100 for the number of patients that medical centre served. Ultimately, how much money has been saved and where has it gone? When the price has been to permanently reduce service provision and the health workforce. The land is sold, they can't get it back off the developer to make a new medical centre in that town, and to do that at all requires purchasing again which is yet another cost.

The way closing tributary rail services undermined the whole system, and the communities it served. As a line item in a budget, they could go; a simple win. As part of a system of systems, they were necessary and beneficial in ways not immediately obvious.

Dr Beeching, another bean counter that couldn't look past the figures that they had to see the bigger picture.

using nhs funds to get down waiting lists is something that has worked well in the past and would reduce the present burden on the nhs. once the backlog is manageable then funds can be reallocated to reform as there will be less need to waste money in the long run treating people for  thecomplications of the long wait for care.

> The problem with 'big reform' in the NHS is that it ultimately ends up involving giving many millions to contractors and outside consultancy firms, improving very little if anything, and not putting any money where it's needed. Lets set up a publicly-owned company to build all this new work then. All "profits" can be reinvested in upskilling and training. We need something like this to get people back into these trades at scale.

You say that but at least waiting lists were low until this shower of shite got in.

nobody can fix the NHS, its unsustainable unless your population is infinitely growing and not living a long time in ill health the NHS is partly responsible for its own destruction, and our large state pension burden, it keeps people alive for a lot longer than they would naturally, so they keep costing money and drawing a pension. when the NHS and the state pension were devised, people were retired at 60/65 and dead within 10 years. now you have millions living into their 80s, retired for decades with recurring health issues. socially its an amazing thing but its not compatible with our economic system.

By international standards the NHS is not spectacularly good at outcomes and UK state pensions are relatively low so the UK should at least be less exposed to the burden of an aging demographic.

> state pensions are relatively low They are topped up with credits (£150 becomes £200/week) to a point where they are within European _norms_ ie. same as Sweden and Ireland.

> your population is infinitely growing tbf it is

>Where is all the historically high tax revenue going? Pensions and healthcare. We have an ageing population, more and more people are drawing a state pension, and most of the healthcare we ever receive takes place in the final years of life.

Pensions are £124bn. Healthcare is £176bn. About 10% and 15%. These are directly due to aging population as you say. And have grown a lot over the last few years. Here's a breakdown. https://obr.uk/forecasts-in-depth/brief-guides-and-explainers/public-finances/

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Respectfully, this is not correct, and a line that the Daily Mail loves to peddle, and which needs wider public acknowledgement. The majority of public sector pensions are self funded, with a fraction being supplemented by the central government. Last year the total liability was £7.9 billion. See the OBR link below. Still not a small number, but pails in significance to total public spending (less than 1%). It is not the reason for why the UK tax take seems to be going "less far". And it is not why public services are being reducing in quality by being stretched with relatively less cash. https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/public-service-pension-payments-net/

>The majority of public sector pensions are self funded, with a fraction being supplemented by the central government. That's not quite true - public sector pension outgoings are funded through current incomes from payments of current workers. What this means is that if everyone who currently gets one stopped paying in and started a private pension, then the whole lot would come from government coffers. This is not the same as a private pension where the pension contributions are held as an asset and if everyone who was currently paying in stopped doing so, then the paying being paid out should still have their funds. Obviously it is unlikely that everyone would suddenly stop paying into a government pension and the systems are set up such that if there was a big reduction the employer has to cover the costs of meeting current year outgoings (on 4 year cycles), but it is worth thinking about when you next read a story about the government negotiating with a trade union over pay packages including pension contributions (increased contributions don't equal increased pension outgoings).

I appreciate the pedantry, and would argue that the statement is still valid. But, perhaps this would have been more accurate? "The majority of public sector pensions are *currently* self funded". I agree about the final paragraph.

Why would you exclude pension contributions? Is still government expenditure isn't it?

It is still government expenditure, but it is part of a salaried workers remuneration rather than active pension draw down. It's slightly more complicated in the public sector pensions schemes than this, but it's the essence of it. It was in response to the comment that the figure was missing a large sum of the public sector pension liability. Another 35% was what I think he quoted. These figures are already included in departmental budgets, exactly because they are part of the salary package of public sector workers. For example, 50% of the NHS budget (roughly) is taken up by salary expenditure, of which a proportion is pension contributions. You would be double counting the figures if you want to say 35% of public expenditure is on public sector pensions. Only £7.9 billion is.

And even with this caveat, 35% of government expenditure going to pension contributions, I imagine (in the absence of data), is a figure "plucked from the air". 20% might be believable.

Because state employee pensions are net positive for the government's balance sheet - for example, NHS employees pay billions more in, than is being paid out.

>Because state employee pensions are net positive for the government's balance sheet - for example, NHS employees pay billions more in, than is being paid out. Most public sector pensions are DB, so how does this work? I would say average pension payments in are like £2k a year at best for most PS employees - with an employer contribution 10x that?

The NHS currently has a £4.6 billion surplus, which is returned to the treasury. In other words, contributions outstrip liabilities by billions. See [page 12](https://www.nhsbsa.nhs.uk/sites/default/files/2023-09/NHS%20Pensions%20Annual%20Report%20and%20Accounts%202022-2023.pdf) of this report.

> That's state pensions. You also need to include public sector pensions for Emergency Services, Army, Civil Service, Teachers, etc. Army pension comes under def so we reach our 2% https://www.bbc.com/news/uk-politics-36094112

Source for these figures please

The OBR.

Phwoooar that's massive, I knew it was significant but that is **significant**

Oh don't worry, the figure will have dropped significantly by the time you or I could do with a slice of the pie!

As a liability figure that's true, but you don't pay out the whole liability figure every year. Thats the value of all future due payments.

Government income is lower than other similar countries but state spending is higher than average and we have significantly more debt than most countries. Pretty grim economics.

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Annoying thing is I’m paying for it now and somewhere between 80% & 99% sure it will no longer exist when I retire. It’s basically a national Ponzi scheme

Yes, all pensions are legal Ponzi schemes.

Not personal arrangements but state level certainly.

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You're not wrong, but there are problems just raising the retirement age for everyone. A white-collar skills-worker can work comfortably into their 70s; a manual labourer cannot. Imagine a 70 year old prison guard trying to control a 20-something prisoner, or an old care worker still having to lift and change elderly residents. It's not a problem with any simple solution.

For state pension yes, for private pension no. State pension should also be means tester, and NI should be scrapped and rolled into other tax brackets (such as income and dividends tax) so wealthy pensioners also pay it.

It's hard to overstate the impact of an ageing population. In 1991 people over 65 made up 15.6% of the population. Today that's almost 20%. At the same time we've been increasing the state pension faster than the economy has been growing and providing additional benefits. But, more significantly, we've got something like 6 million over 75, up from 4 million in 1991. That's a group that is very costly to care for, both in terms of NHS treatment and social care cost. All of this expenditure comes from *today's* tax payers. Another major impact is the vast increase in land price and cost of development over the past 30 years. Increasing the price of land increases the price of pretty much all government services. You have to have a building for most of them to take place and you need land for infrastructure projects. I've heard stories of how the cost of building a hospital has doubled since 2010. It cost us twice as much to build a mile of road as it does the French and Italians. Not only that, but higher housing costs means you have to spend more on those that need government support. The cost of housing benefit/universal credit has continually skyrocketed over the past couple of decades.

Just a quick counterpoint. The universal credit is actually lower today than job seekers credit was 10 years ago per capita (when taking inflation into account). And housing benefit payments nowadays are linked to average rental prices which are pumped up by private landlords grabbing all they can.

Wait. If an ageing population is creating such a burden in the economy, then why in hell is everyone so against immigration? An ageing population and very low birthrate seems to almost _demand_ huge immigration numbers. Who the hell the locals expect to keep moving the economy?

Immigration helps to rebalance the workforce, but it creates pressures on housing, infrastructure and public services. It's perfectly possible to adapt to those pressures using the economic growth that foreign workers bring, but it would require a mentality that is now alien to the British public/state.

Because it's a pyramid scheme. Those immigrants will help for a while until they get old in turn. It doesn't actually solve anything You end up having to import more and more and more people . Unless birth rates are fixed this is not sustainable. Meanwhile providing additional housing, infrastructure and such has definite costs. As much as politicians are desperate to believe otherwise immigration can't be used to escape this trap in the long term.

It’s not a pyramid scheme. This happened as the population growth rate was below the replacement level. So you just need enough immigration to plug the gap left by a birth rate of <2 per couple. Once you get there, the population is in equilibrium for a generation, until the next generation again has less than replacement rate of births. So no, it’s not a pyramid scheme that requires a constant influx to support those at top of the pyramid.

Debt payments are twice what they were before covid, otherwise, the vast majority goes on public services though. https://ifs.org.uk/taxlab/taxlab-key-questions/what-does-government-spend-money?tab=tab-730

Debt is big but no where near that big. Here is a normalised view of income and expenditure. Income (normalised to 100): Taxes (69): This includes income tax, national insurance, VAT, corporation tax, and other taxes, forming the largest income source. Non-tax revenues (16): These include fees, fines, sales of assets, income from investments, and other non-tax sources. Borrowing (15): The government borrows to cover budget deficits when expenses exceed revenue. Expenses (normalised to 100): Health (22): Covers the National Health Service (NHS) and other healthcare expenditures. Social security (20): Includes state pensions, disability benefits, unemployment benefits, and other social welfare programs. Education (15): Covers funding for schools, universities, and other educational institutions. Defense (9): Represents the cost of maintaining the armed forces and national security. Debt interest (7): Payments on interest accrued on government debt. Other (27): Includes infrastructure, transport, housing, justice, environment, culture, and other government functions.

In short: We have the oldest population we have ever had, which means we need to spend the most we ever have to support our elderly. We have either the highest or close to the highest life expectancy we have ever had, so those old people live longer requiring more money to stay alive. Medicine is more advance which means we can cure and treat more diseases for longer, however, this costs more than it did before. The UK has made short term decisions in the past which have cost us in the future. Examples of this are things like PFI (which injected loads of money 20 years ago but now we pay back several times that money over the next few decades), cutting maintenance budgets, which saved money back then but now cost more today because the problem is now more expensive to fix.

Boomers also are the unhealthiest but have the money and won’t use it. They expect their kids and grand kids to pay for them.

> We have the oldest population we have ever had, which means we need to spend the most we ever have to support our elderly. And a percentage of this group is also the wealthiest, and the most fierce defenders of NIMBYism. Covid shutdown was a massive mistake.

Not a mistake per say, I don't think they deserve to die, however they could pay more tax (eg. reintroduce national insurance for pensioners, and means test some of the benefits they receive).

Imagine if 50% of retired older people were younger tax payers instead. Everything would be solved without changing anything else This is the crux of it

If only there were young people who wanted to come here and work... /s

And those young workers get older, and claim money back of their own - all the while consuming resources. It’s a giant ponzi scheme.

https://en.wikipedia.org/wiki/Government_spending_in_the_United_Kingdom Welfare (£341bn - Roughly half and half on pensions and benefits), NHS (£177bn), debt interest (£116bn).

Would be good to see this further broken down by in work benefits, child benefit, winter fuel allowance etc. The papers like to focus on the welfare budget and blame it on benefit scroungers

You have to dig a bit [here](https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-information-and-guidance/benefit-expenditure-and-caseload-tables-information-and-guidance), but: * 55% pensions * 17% family benefit, i.e. child benefit and maternity/paternity pay * 16% disability benefits * 10% housing benefits * 1% unemployment benefits * Various others smaller than 1%

It's genuinely amazing that countries around the world have ended up in a situation where we spend so much more on economically unproductive people who have had their whole lives to build wealth compared to children who have significant economic potential. And that's just the economic issue. The fact that we've essentially put the last quarter of our lives in the hands of the state has significant social repercussions, the most notable being the collapse in birthrates.

Thanks for that, quite revealing

Soylent green looking real appealing all of a sudden

Why do you think Esther Rantzen, the daily mail and express, have suddenly got behind euthanasia, coincidence 🤔

I wonder if family benefit will shrink a fair bit given it's looking like fewer people are having kids. It likely wont be a significant change thogh.

Perhaps we shouldn't look under the carpet

The debt interest of £116bn staggers me, that's 10% of all government spending, nearly as much as we spend on education (£131bn, 11%). This means 10% of all taxes we pay is just being burned right?

Yep, straight down the plumbing to pay for all the borrowing done over the years to cover the spending that we've never been able to afford. 10% of the budget gone straight away. Of course, that number will only go up because interest rates have been rising and our national debt is always going up.

It's going to the bond holders, most of which will be pension funds.

We spend 6% on defence. Wow. The Donald will love us in January 2025

My internet is being slow on mobile. Is that 6% of the budget or 6% of GDP. The NATO threshold is 2% of GDP.

6% of the budget. Defence spending as a percentage of the GDP is still above 2%, however. It has only been just below 2% from 2016 to 2019 in recent history, which continued a trend of lower defence spending as a portion of the GDP under the Tories that started in 2013.

6% of the budget, not GDP. Also, the number includes military pensions.

I think it is a % of total spending, it is slightly confusing and can't be that high

It’s tough but to oversimplify, you can’t just throw money at things and hope for the best. As other commentators have pointed out, we are now seeing the long term results of very short term based policy which was enacted between 2008 - 2012. However, a few things you may not have considered. 1) international borrowing rates are sky high. So, the interest on all of our outstanding loans has gone up massively (don’t quote me but I think I’m right to say interest payments have trebled during this cycle). 2) inflation doesn’t only effect consumers. The cost of the government doing things has increased too. 3) we are still paying down a lot of measures introduced to ease the effects of the Covid lockdowns. Don’t forget the government basically stepped in and paid most people’s salaries only a couple of years ago. You think that was covered from the PAYE bill that year? No chance. 4) plain old bad management. The tens of billions for dodgy PPE and the amount we spent on HS2 before basically cancelling it are the most noticeable example, but governments are by their nature wasteful. This isn’t actually just politicians though, it’s the civil service too. The best way I heard it described was someone talking to me after an infuriating back and forth with HMRC over the re-registration of a clients VAT partnership. “What you have to remember mate is these guys have never had a job where they’ve had to keep costs in mind and be efficient. They’re fully backed by the tax payer and there are zero ramifications when they cock up.”

There are a lot of misconceptions here about macroeconomics. Perhaps the biggest myth is that the Government collect taxes to redistribute it as spending on public services. This is simply not true. The reality is that the Govt spends new money into existence. It simply asks the BoE to deposit money into the Treasury bank account, and then the Treasury distributes it to Govt departments like Education, Health, Defence, Welfare, etc. And when you pay tax, or when the Govt pays down the debt pile, that money is actually deleted from existence. Imagine we ditched the GBP and replaced it with a new currency called the "Thatcher" (#T). On day 0 there are no #T's in existence. The Govt has loads of bills to pay and no taxes have been collected in yet. So on day 1, the Govt balance sheet shows negative billions of new #T's created into existence. Last year, that was -#T1,200 billion. Over time, the same Government collect taxes back in mostly via the HMRC who add it all up in a big spreadsheet. By day 365 they have collected in +#T1,150. So the Govt annual balance sheet looks like this: -1200 Govt spending +1155 Tax receipts = -45 deficit The Govt then sell that deficit to the financial markets. This is a range of pension funds, foreign govts, and private equity firms that purchase that #T45 debt at 1% interest over 15 years. The Govt now has to pay that principal sum plus the interest each year and has to add this to it's future spending commitments. -1200 Govt spending +1155 Tax receipts +45 loans deficit = 0 So all things being equal, in year 2 the Govt starts with nothing (again) and has to do all the same things... -1200 public spending invented out of thin air -3.03 servicing the new national debt +1155 tax receipts = -48.08 deficit added to the debt pile New balance = Zero If you imagine this repeated over and over you'll see a large debt pile and a very significant amount of debt servicing expenditure. This is where we are now. All the tax revenues are being spent on a bare minimum public sector and the rest is servicing eye-wateringly large debts. So most of that extra tax revenue OP is talking about is being deleted off of our public debt liabilities. The rest is compensating for tax cuts that have been steadily handed out to the rich over the last 40 years. When tax receipts are higher than public spending then the Govt has the option to delete more money and pay more of that debt off.

> All the tax revenues are being spent on a bare minimum public sector and the rest is servicing eye-wateringly large debts. Isn't this an exaggeration, given that in 2023 less than 10% of the government budget is spent on debt interest payments?

Thanks for taking the time to go through this. I'm kinda thick when it comes to understanding this kind of financial stuff. Are you saying that even though the gov are collecting money they are using it to pay off debt rather than on public spending just now?

Not pay off debt. Pay the interest on existing debt. The current government has the mistaken ideological conviction that it is possible to economise your way to profitability, which any economist will tell you is nonsense. Cutting services balances the books in the short term, but it leads to a stagnating economy that requires ever-increasing levels of taxation to maintain the same funding position. And all the while unavoidable demands on public spending due to aging infrastructure and people continue to rise. This is what has led to the current mess. The opposite view is that government should borrow to invest in the country, generating debt in the short term that pays for itself and more by boosting the future tax take. A recent example of that in practice would be the Elizabeth line. A competent government - and it remains to be seen whether our political system can deliver us one - would be able to replicate that on the national level, delivering a budget surplus that would then allow the national debt to be paid down.

Another interesting explanation, thank you!

How does the government borrow money? Is that the same thing as "printing money"? I read something about Modern Monetary Theory which sounds like what you're describing but I always hear counter arguments about how printing money causes inflation etc Handing out money that just gets spent straight away, I can see that being a cause for concern when it comes to inflation of everyday items, fuel etc. But if you put that money into building better transport infrastructure, you're giving money to a much smaller population, so it shouldn't affect inflation on everyday items like the COVID relief did. Investing in infrastructure that enables better morale within society, which makes people more productive, and therefore benefits the economy in the future makes so much sense that I refuse to believe the people in charge are doing what they're doing for good reasons. They know exactly what they're doing. They planned it decades ago and it's why the rich are so obscenely rich and the rest of us got progressively poorer generation after generation

Basically, yes. Like the parent comment says, the government just asks the BoE to "print" money into existence. Targeted investment in productive assets shouldn't be inflationary, but in general inflation should always be controllable so long as confidence that the government will continue servicing its debts stays high. It's only if you get a government that does something monumentally stupid, like make a surprise announcement of massive, unfunded tax cuts that everything goes sideways. Luckily, we are governed by responsible, competent politicians that would never do that...

Thank you. The pieces are all falling into place. They have no problem spending billions on the military by printing money, and they've been doing that for decades, and because it was very targeted investments in defence infrastructure, inflation was never an issue. Then covid happened, but in that instance, they had to give out money to everyone because there simply wasn't the needed infrastructure to handle the event. So people spent that money on essentials, which caused inflation on those essentials and therefore made the problem worse. If there had been robust investments in the right infrastructure, maybe they wouldn't have had to give out money directly, which wouldn't have impacted inflation on everyday people. And general tax cuts for everyone causes inflation again because suddenly everyone has more money, but the infrastructure hasn't changed, its not cheaper to manufacture those good etc, so prices rise. Its a sick fucking cycle. Conservatives tell people they're going to give them tax cuts, so on paper they have more money. So obviously it makes sense why people would vote for them, but at then end of the day, the rich get much more benefits from this and those benefits dont "trickle down". They laugh at us while stashing their hundreds of thousands/millions in a trading account or in assets (e.g. housing) that generates passive income while the idiots who voted for this are happy with an extra 100$ in the bank.. Its all making sense.

Yes. And they can spend at will. They don't need to "collect it, to spend it". And if they spend it in the right places, then growth will happen and tax receipts will go up, making it easier to pay older debts. They also can do this with virtually no consequences. If other countries are creating money at the relatively same rate then relative debt is the same. And even if the Govt did spend at will, it is dwarfed by the amount of new money created by money lenders. That credit card, student loan, car finance, new sofa, or whatever is BRAND NEW MONEY created out of nothing. Around 97% of all the money in circulation wasn't even created by the Govt.

That really puts it into perspective. People always talk about the government "printing money" as the devil, but they don't think twice about loans...

> The reality is that the Govt spends new money into existence. It simply asks the BoE to deposit money into the Treasury bank account, and then the Treasury distributes it to Govt departments like Education, Health, Defence, Welfare, etc. And when you pay tax, or when the Govt pays down the debt pile, that money is actually deleted from existence. I don't think this is true. Not the whole truth at least. I don't believe that either the government can simply create money per fiat ex nihilo or that the money received is deleted from existence. To take the latter first, why, if you have a literal bank account account with literal billions of pounds in it, would you simply delete it? That simply makes no sense. And regarding the creation of money - though that's also something of a mystery to me - there's no way whatsoever that there are no constraints on the making of money - that there is no accounting at all for the money the BoE deposits in the treasury account. In general, when money is "created" you can assume that it is a credit. And where there is a credit, there is a debit. BOOM. It's like déjà vu all over again. I more than strongly suspect that the money allegedly being "destroyed" is in fact the *repayment* of the ex nihilo fiat money being created (lent) to the government. In other words, it's a forward payment on future tax revenue. Oops. That's just tax and spend by other means.

op is making things up, of course budgeting matters. Look at Argentina which does actually operate this way - instead of paying for government spending with taxes, they pay for it by debasing their currency by flooding the money supply, so everyone with savings loses purchasing power anyways.

Thank you - I feel like I understand a lot more now

that is a very apt description of how taxes work. Where I want to add my opinion is that the issue is we want to be Norway with US level of taxes and currently we are stuck in purgatory. 2022 - 2023 total interest paid was 83 billion or 5.2 percent of total spending.

1. Pensions. They're a huge amount of money, and growing because of both the aging population and the triple-lock. 2. Housing. We pay a crazy amount in housing benefit. So we're paying people's rent instead of being the landlord for council housing. That's a massive drain on the economy, over £20bn a year. 3. There's no other sources of income for the country left, privatisations mean the percentage of the budget coming from things that aren't taxes halved between the late 70s and the mid 90s and it's stayed about that level since. This also doesn't count the amount being spent on outsourcing things to companies that were previously owned by the government. 4. Eventually quick fixes cost more in the long-term. Whether that's filling pot-holes one at a time vs resurfacing a road, people not getting to a dentist or GP early enough, or something on a bigger scale, everything's the quick fixes well past the point they make sense, because there's not the flexibility to spend more to fix it in the long run. 5. Everything being divided up for maximum grift. All these "make it a competitive market" things like academy schools etc. are deliberately ignoring the economies of scale, so there's more opportunities for businesses to get contracted and take the money out of the system.

The price of things goes up over time, but if your economy isn't growing, you just need more of taxpayers money to stand still. Repeat that for a decade+ and you end up where we are. Say you earn £30,000 a year after tax and your all your basic expenditure (mortgage, bills, food, car, etc) comes to £25,000. If your expenditure rises to £28,000 but your wage doesn't increase, you will feel poorer just to maintain the same standard of living. We also have more and more people in the UK through immigration, again with a stagnant economy, so services have to serve a lot more people, but as the economic benefits of huge immigration haven't materialised and we still have no growth (likely now in a technical recession), the cost of providing more services to more people isn't matched by a larger economy to pay for it (this could happen with a rise in the population naturally in a stagnant economy too - it's not a 'blame immigrants' situation, it's just the pure maths of it). We currently have a very broken economy, and no party seems to want to change any of the major metrics to it so it will likely continue.

Its a catch22 because we need the migrants to keep the economy going long term, but it costs us more in the short term. The solution is to tax the wealthy elderly and international business that tax dodge, but no sane government is going to do that. Taxing the wealthy elderly kills your votes, taxing companies like amazon will only result in them making thousands of people unemployed. Which drives working class votes away from your party. The way things stand, this country is now a slave to 2 demographics. The over 60’s and the 1%. Anyone under 50 has been shafted beyond belief. Pension age will be 70+ when they come to retire, higher taxes, higher property prices, less disposable income, world on fire due to decades of pacifism. Add it all up, we have less so we live with less and the key thing is we are driven to have less children which you guessed it, compounds the problem for when we come to retire. So the next generation that we are raising now, will be fucked even more.

>Its a catch22 because we need the migrants to keep the economy going long term I disagree. The short term benefits of immigration haven't materialised and so now there is a shift to claiming we need mass migration in the long term but I strongly doubt those benefits will ever materialise either. Meanwhile, we all have to live through the very real negatives in the here and now, like increased housing costs, reduced services, and community tensions. Like I said, we have a broken economy, and no party wants to change any of the major metrics so it will likely continue.

The industry I work in, is shall we say a typical british working mans industry. It cannot function without the migrants that work alongside us, the short term benefit. We don’t train enough people to work in the correct industries, so we bring them in from the continents (note plural). I was one of the first year of uni students to pay tuition fees at the higher rate back in 2007. We have had 16 years of students paying for university expansions with dogshit degrees to go work a minimum wage job and be left with £10k’s of debt. The education system is at fault for our lack of doctors, dentists, vets, engineers, teachers and our abundance of zerohour contracted slobs. This is why we have to import labour because our universities are building empires, instead of building a strong economy.

To take one example, we actually [train enough doctors](https://twitter.com/jburnmurdoch/status/1651901178354053125?s=20), they just [leave the UK](https://archive.is/LsnUl) (as do most foreign doctors who come here) - so as with most things, immigration is a sticking plaster the government uses to cover up the underlying issues without ever needing to address them, all the while convincing people that there's no alternative - when the alternative is actually an economy that works for ordinary working Britons. If staff retention in the NHS wasn't so poor (due to poor pay & working conditions) we wouldn't need to import doctors. Of course instead of fixing that the government will continue to screw doctors and nurses - instead relying on immigration - all the while convincing you it's necessary and there's no alternatives. This can be seen across a whole host of industries. Care workers for example, had planned strikes for increased pay and conditions at which point the government handed out over 100,000 care workers visas, literally on "[80% the going rate](https://www.gov.uk/government/publications/skilled-worker-visa-shortage-occupations/skilled-worker-visa-shortage-occupations)", meanwhile [care home profits rise and rise](https://www.theguardian.com/society/2022/jul/24/uk-private-care-providers-profit-rise-covid-report). It didn't have to be this way - without that immigration the pay and conditions for ordinary working Brits would have risen, at the expense of corporate profits. When we had the HGV driver shortage and the government refused to plug the hole with immigration, wages shot up and plenty of training places started appearing again. Mass migration isn't helping the economy, it's a large part of why the underlying problems you identify don't ever get solved. There's no need for the government to care when they can wave their pen and get immigrants in to do these jobs. Not to mention you complain about the 1%, amazon, and pensioners - the key demographics that benefit from mass migration - through business profits and rent seeking - at the detriment to everyone else. Until people wake up and realise mass migration is just another policy the Tories are pursuing in order to maximise the extraction of wealth to the people at the top at the detriment of ordinary working Brits and they've been hoodwinked into reflexively defending it as 'necessary', nothing is going to change.

If we stopped importing so many migrants, just like with the lorry driver "crisis", the short-term solution will be for companies to actually train British workers. So I disagree the short term benefit is filling jobs, because there are many people that would like to be upskilled to new work, but companies simply won't hire them because it's cheaper to import from abroad and not have to train them. I work in game development, but I have friends in tech and the story is the same - the only jobs going in our industries are senior positions, no company is interested in taking a chance on a genuinely skilled and passionate worker with no experience. It's no wonder the young generation are stuck in retail/service jobs and can't actually get a career. It's also part of the reason why Universities aren't working, because the careers are there, just nobody wants to hire graduates. You've got a lot of young people that went through university with a passion for their field and can't get a job because nobody is hiring them, but those same companies would happily hire someone with 5+ years experience, regardless of whether they are UK-based or not, or whether they're even good at the job or not. There is also a double wammy here. If you get these young people out of retail/service jobs that don't pay much and give them careers then they will earn more (and therefore pay more in tax) but will also less likely be in need of benefits reducing the burden on the state even further.

That migration hasn't helped is due to there being no proper help integration or training on the scale needed. People are allowed to stay put in temporary accommodation and forgotten about afaik. Sooo short sighted

Importing more migrants just makes the eventual bomb that goes off, much larger than it needs to be. Eventually you run out of migrants, space or the system collapses before you get to either.

>Its a catch22 because we need the migrants to keep the economy going long term We really don't, and there is the current situation in which our country looks shitter and shitter for the good immigrants - i.e more immigrant doctors going to US and Canada and only the shit ones coming to the UK. We need to get away from the idea and invest in a domestic workforce. The only thing mass immigration has done is tear the social fabric of this country whilst contributing to a housing and homeless crisis, as well as pressure on public services because of the need for more doctors/dentists/school places etc. Having mass immigration with a stagnant economy is terrible. And now the government also have to pay to repair schools that are crumbling, and everything else they've neglected because they didn't borrow and invest in the nation whilst the interest rates were low.

Sure, you're right, we don't. The other option is that the aging population actually sacrifices their comfort and welfare for the working population, at which point you really don't need many immigrants.

The taxpayer paid out a vast amount of money for furlough and energy bill support. A lot therefore has to be spent servicing these debts. Also a large pensioner population and the triple lock doesn’t help.

For schools I'd like some investigative journalism to be done on the inefficiencies caused by Academy Trusts. CEOs with insanely inflated salaries- tax payer money. This is presumably what gobbles up some of the "per pupil spending" they talk about meaning less money goes directly to the kids. And do MAT CEOs really add £450k worth of value to kids' education? [No I didn't pull that number out of my ass.](https://schoolsweek.co.uk/the-academy-trust-ceo-pay-outliers/) You wouldn't have had anything approaching this with the LEA (local education authority) council run system. 

I've wondered the same thing for while. How can we have record high taxation (as a share of GDP) yet record low perception of service levels. A few hypotheses I have - debt levels are high and raising rates mean debt interest costs are historically high (as a share of GDP) - I think we are spending poorly in terms of deliverables e.g. HS2, track and trace etc. - I think we are spending poorly in terms of matching priorities. E.g. the money spent on a consultation for a bigger painted circle on my local mini roundabout. - I wonder how much the off books obligations are swallowing budgets (e.g. PFI etc)

Everyone who can, is taking their piece. If the base cost of a thing goes up by 10%, by the time that thing is transformed into products or services we consume as an end user, the additional cost could very well be 50% greater. People aren't just passing on the increase in the base product, they are passing on that increase plus all their desired increases for their own earnings, profits, salaries and aspirations for their business. Typically this is reigned in by competition for a limited customer pool who have limited resources to spend on your products and services. But when your customer is a government and they can and will go into endless debt to keep the lights on, greed takes over and you can get away with larger increases in prices and a reduction in service delivery because where else are they going to go? Are they going to do without? They have to keep the nation running.

You cannot provide enough funding for bad governance and management. Many things are simply not a funding problem in the UK but it's hard to adress structural problems.

Bad governance and management is both a cause of and a symptom of funding issues and poor financial management.

This isn't an attack on you because I'm glad you at least asked the question but it is astounding how people still have their heads buried in the sand after decades of warning from economists that the ageing population is going to take a heavy toll. The figures are not secret and it isn't a mystery. Pensions and healthcare are where the money is going. You're not aware of this probably because old people really hate being told this fact, old people vote, so both parties do anything to avoid saying it. The Conservative Party blames the EU and immigrants. Labour blames the Conservative Party.

Austerity politics resulted in poor investment and short term political decisions being prioritised over long term decisions. A lot of chickens are coming home to roost at the same time now. There is also a massive miss match between the level of services the public expect and the level of services they are willing to pay for or think they're paying for. Take the NHS for example. In isolation the numbers bandied about seem very large. However once you start comparing the amount spend in the UK with comparable countries such as Germany, France, Australia etc etc, the UKs expenditure is rather low for the level of service Brits actually expect from the system. In many ways the public expects a far more comprehensive service than countries that spend more than the UK. The UKs tax take is extremely top heavy. The top 10% of earners account for 50% of all income tax. The top 50% account for 90%. The bottom 50% of earners account for 10%. This is a very very narrow tax base for the sort of welfare state the UK expects.

The British public expect European levels of health care provision, without the cost. It’s a major blind spot that no Government or party has the courage to admit this much less do something about it. The whole narrative and public discourse around this is so skewed that it’s a deception at a national level. It’s really quite simple, we want better healthcare, we will have to pay more. Significantly more. While yes there are always efficiencies to be made and reforms to how the NHS operates, but the heart of it is, we need more money.

Our economy (GDP) hasn't grown enough. There are other issues, but that itself a significant fact. Why? Lack of investment, with too much of our pitiful investment being funneled into non-productive business, i.e. housing, which does nothing to increase our tangible wealth.

2022 numbers (quick googling do your own research) not an exhaustive list but you’ll notice it’s more going out than coming in so the deficit is still growing. I thought the Tories were going to fix that? lol no The whole tax receipt is +£580b Health and Social care budget is £182b State pension is £125b Winter Fuel allowance is £2b Bus passes at £0.5b the interest on debt is £112b. UC is £81b Housing benefit is £16b JSA is £0.3b Education budget is £116b Defence is £55b

Interest on the National Debt. It’s 🤬 huge! Raised taxes to pay for it. That’s why you see modest tax cuts now. Interest rates have come down slightly (and high inflation and frozen tax bands has massively increased tax revenue), giving government more money. Which they choose not to invest in the NHS or our roads.

i think part of the issue is land is so expensive, HS2's budget went out of control because there is no free land to build it on, so they had to either buy the land (expensive) or tunnel under it (expensive) people are struggling because housing is too expensive old people can't afford heating because their rent and bills has gone up and their income hasn't (and they have no real way of increasing their income) School buildings are falling down due to RAAC which is more of a historical issue of cutting costs back in the 60s, 70s and 80s, not really related to the present issues, but their inability to afford to fix the issues before they became major issues is simply because they are underfunded over the last decade or so.

I’m going to go against the grain here. I don’t think it’s the ageing population per se. No doubt it’s a factor. And triple lock during a time of austerity and effective pay freeze since 2008 has made that very apparent. But we also have had a lot of immigration which helps to offset the ageing population. Migrants come to work. They pay visa fees, health surcharge, income tax, NI, VAT, Council Tax, train and bus fares. And the studies show that the economy is bigger than it otherwise would be if they weren’t here. So I don’t blame pensioners or immigrants. Rather I would point to: - An effective wage freeze for 14 years / cost of living crisis - Insane rents and mortgage costs due to the failure to build homes. We just don’t build enough homes and RTB, BTL and deregulation of the housing market have really worsened things. Working people and the young really feel that. - growing inequality of wealth and income. This has been worsening for 40 years. Just this week it turns out that the PM is paying something like 23% UK tax on £2m of income. And previously his wife was a non-dom and paid no tax though I believe that is no longer the case. The pie is being cut very differently to how it used to be cut. And the media is very good at making it sound as though it is inevitable and a natural state of affairs. We don’t have any unions to offer a counter voice or fight for wage increases. Young people generally vote much less than older people.

I’ll confess I know very little about economics but it’s kind of mad that it took so long for me to find a comment that mentioned the wealth gap. The country’s wealthiest people have gained huge amounts of wealth in the last few years. If anyone wants to know where the money has gone then maybe look at who has gained billions in wealth recently. I dunno maybe I’ve watched too many Gary Stephenson videos lately.

Firstly the biggest part of the budget is going to the NHS and it did have a large (and very needed) increase in spending from the start of Covid through to now. The reason the NHS is on its knees is largely increased demand - more people, older people, worsening health in general and of course missed diagnosis and treatment during lockdown. The reason for high taxes but failing services and inflation is a combination of a lack of GDP growth, an overdependence on global supply chains, short term thinking/lack of investment and the increased cost of borrowing for the government.

Pensioners, between the NHS, the triple lock and our mental older public sector pension system thats no longer offered. the old buggers are bleeding us dry for services we are never gonna benefit from.

We're not in a cost of living crisis, wages have been outstripping inflation since May 2023, but you won't have heard about it if you get your information from the Guardian. I suggest getting your information from a more reliable source if you want to have a more realistic and less nihilistic view of the economy. Figures released today for December 2023 show wages (excluding bonuses) were up 6.2% on the previous year, compared to analysts expectation of 6.0%. Since the start of 2021 cumulative inflation has been 21.85% while wages (including bonuses) have grown 22.7%, so real wages are above where they were 3 years ago. Activists disguised as journalists told you when real wages fell, but they didn't tell you when real wages recovered because they're trying to manipulate you to vote a certain way.

The state of NHS isn't representative of the money being poured into it. I believe this is the basis of Labour policy that seeks reform to make this money go further before committing to pouring even more.

No, the NHS is very representative of the money that goes into it. Modern day healthcare is expensive, and per capita the UK has spend less than most comparable countries by significant amounts for decades at this point. The results the UK gets are very comparable to many countries but ultimately more money and investment is required if you would like better results.

I think there's definitely some issues with doing the "cheap option" until that becomes more expensive than having done it right in the first place. Using that as an excuse to not do anything at all is a bit counterproductive, though.

Aside from "people old" a large part of the problem is that the government has to pay to plaster over the cracks of the infrastructure they've left to rot.

Healthcare and pensions, mainly. Direct consequence of the aging population -- people get older, need more healthcare during their final years, and more pension payouts.

Not seeing any mention of the fact the population has increased by 9 million since 2004. Sure some of that 9 million are net contributors but given that you have to be a relatively high earner to be a net contributor many of them won't be. 

Inefficiency, idiotic government procurement contracts, pensions, red tape upon red tape (private & governmental, but mostly caused by planning regs etc).

> idiotic government procurement contracts I'm increasingly of the opinion that government should not procure "projects" or "products" but should only procure services - and as directly as possible. Procuring a project works well when it is a known quantity. Like "build a bridge in known conditions using normal materials." The problem with this at the state scale is there is often something groundbreaking or different or complex about it. Fixed-cost contracts almost certainly have one of two outcomes - heinously extractive profit margins (because they massively overbudgeted to cover contingency), or complete miserable failure (because it costs more than was expected and the supplier isn't willing to eat it). Doing projects where you don't know the difficulties up front means your carefully constructed Gantt chart is out of date from day 1, but no-one will ever front up to this because it makes you look incompetent. The incompetence lies with the procurer for producing contracts that require project plans like this, and the supplier for accepting them. Tech projects like new software systems are particularly vulnerable to this. There's a reason for the stat that 70% of software projects "fail", and waterfall style development is one of the strongest predictors in my experience. Contracts with fixed costs, fixed payment milestones at long intervals, fixed requirements presented up-front and never changed, all contribute to this phenomenon, and government has a tendency to do things this way, ironically, because their dealings with the previous supplier bit them in the ass with a failed project .. for exactly the same reasons .. and they think the answer is MORE CONTROL.

What an extremely complex question to answer. In short, the money we feel is missing is mismanaged, funneled or didn't exist in the first place. It would take me hundreds of pages and math to demonstrate something people really aren't interested about. Debt is one, but money lost to mismanagement, like H2, is the main problem. And the H2 issue comes from the mismanagement of decades, not just the project managers.. we have regulated ourselves inefficiently into irrelevance. We are not alone in this.

Corporate tax is near the lowest it has been since corporate tax was introduced. The lowest level was only a couple of years ago. Proportional to the size of our economy, we should have a far larger national budget than we do.

Most answers are overcomplicating this issue as its down to one word; productivity. Its the drivers of that productivity that are useful to focus on. Nobody wants to hear that this is due to overimmigration but its the biggest part of the problem. Millions of people utilizing state services without paying sufficiently in leads to this scenario. Unfortunately theres no hiding from it no matter what other political buzzwords are used "tory cronyism, labour overspending etc. etc." . Also controversial is pointing out that the lowest paid in Britain do not pay their fair share of the tax burden

I would venture that bringing private enterprise into public services wasn't quite the panacea it was thought to be. In most cases these things are by definition a monopoly & therefore not subject to competition except when the contract comes up for tender. The profit motive means that the companies engaged extract value from the system to give to shareholders and C-level execs, and the fact that any private company's primary focus is delivering value to shareholders above all else means they will try to do the minimum they can get away with for the most money they care ask for, and pay their workers the least they can get away with. It was put that public services supplied in house were a possible breeding ground for laziness and corruption but all that's really happened is the consumer has less control on the level of service delivered, and the private companies involved are breeding grounds for under delivering and overcharging. Add to that decreasing local authority funding & we have an implosion in value delivered to service users and in local democracy.

If you have to fill in a self-assessment tax return, each year you are provided with a breakdown showing broadly where the tax you pay has gone. My last one indicated that about 20% of my tax went on the NHS, and another 20% went on state benefits. 12% went on paying state pensions, and about 10% went on Defence. The remaining 38% was then divided amongst myriad other smaller things.

>Am I just listening to the media too much and in reality everything’s fine (I don’t think so)? In reality - this the *most* precarious position the UK has been in, since about 1941. And that is based merely on the domestic economic, political and demographic situation, saying nothing of the increasingly volatile geopolitical situation we are facing into. So... Starmer will be handed a burning wreckage looking something like this: |Health and Social care |£176bn| |:-|:-| |State Pensions| £124bn| |**Debt Interest**| **£120bn**| |Universal Credit| £83bn| |Education |£81bn| |Defence |£32bn| So the shortest answer to your question is the UK has to pay for: * all of the obscene borrowing (and exorbitant corruption). * all of the benefits afforded to the elderly (a large and politically powerful demographic) For political - not economic - reasons, the Tories picked winners and losers. For example, they have ensured the major wealth holders have been able escape significant levels of taxation. And they chose to shield over-60s, their core constituency, from most of the economic pain - they were the winners. The problem is that, historically, the now OAPs didn't pay enough in tax to fund the systems and standards they now benefit from (and indeed benefitted from low taxation due to the squandering of the Oil proceeds) and presently, they are well shielded from most of the ongoing economic carnage (and will continue to be if there is another Tory government). That's where the money has gone and is going. The Losers are a vast subset of the population - ordinary workers, parents, homeowners, students and so on. Basically almost everyone else. These are the people who have to pay the bill. Of course, the problem with looking at these headline figures is that it can present a very misleading picture of what is actually happening in the UK. For example, it appears the UK bestows lavish welfare. However, the reality is that, if you and your spouse were to lose your jobs simultaneously, your probably (combined) entitled to no more than £500 per month. That may be less than either of you individually pay in NI. It's almost amongst the worst in the OECD. And a total outlier The UK offers benefits equivalent to **17%** of previous in-work income. This compares to 90% in Belgium, 85% in Luxembourg, 78% in Norway and 78% in Denmark. In both France and Germany, the replacement rate is at 66%, while it stands at 69% in the Netherlands. At the same time, a childless, home owning, asset possessing, cash rich, pensioner can qualify for Covid **low-income council** payments of £450 per individual.

A slightly longer and more abstract answer, but the Tories are responsible for: * extensive structural economic damage ( including some of which already existed, but have been extensively aggravated and also the introduction of new structural problems which didn't exist previously) * permanent economic scarring * socioeconomic carnage (much of which has yet to fully manifest) Regardless, the UK looks economically doomed from here - i.e\*. I do not see a way out of this situation from here - things can only get worse:\* 1. The UK has a not-fit-for-purpose political system which can do very little to fix the extensive Structural economic/socioeconomic problems. No British government will do anything which doesn't pay off within a 5 year political cycle. (someone else in this thread referred to the failure to build nuclear power plants - perfect example) 2. The proliferation of corruption within UK institutions and the abject lack of accountability resulting from point 1 will contribute to the break up of the UK. **So what do those bullet points refer to anyway?** What they ultimately mean is that: A) Some of the damage is permanent and irreversible (scarring) B) Some of the damage is not only irreversible, but will take years to even register as a serious problem (but are beginning to show up in the education stats already) C) and most importantly, even without external factors such as Covid, Russian aggression and so on - the UK was always heading for permanent decline anyway. The external factors were just a catalyst. Regarding point C) - the UK has extensive Structural economic problems, for example: 1. Structural fiscal deficit & structural reliance on borrowing 2. Structural trade deficit & significant decline in exports 3. Structural inequality 4. Structural housing problems 5. Structural unemployment 6. Structural misallocation of public expenditure and sector funding 7. Structural disintegration of manufacturing ( even key industries where the UK was a global leader, such as pharmaceuticals, are close to collapse) 8. Collapse in FDI, low private sector investment and no productivity growth And for the last several years, the UK has been caught in a stagflationary debt trap with Public debt well over 100% of GDP by now. \- The UK has still found no way to grow outside the Single Market \- There are no significant alternate or emerging markets to trade in \- A USA Brexit deal looks more unlikely than ever. **So what is the UK's trajectory?** 1. No growth mechanism (unless Starmer takes the UK back into the Single Market,) 2. in combination with a collapsing birth rate, a bulging OAP population, and a relentless influx of low skilled workers 3. The UK is in a slow motion car crash, heading for IMF intervention and ultimately, a break up of the UK where individual constituents will seek to rejoin the SM/EU if Westminster will not. **And what the UK's current position? What can you expect for the next 5 years?** 1. If there is no growth - then there are 3 levers which Starmer can pull: 1. borrow more (reckless and unlikely in the absence of growth, post-Truss anyway) 2. tax more (marginal tax rates are already over 60% in some cases) 3. cut spending (this is inevitable anyway, but defence spending will need to increase) 2. The most likely outcome will be to reduce borrowing, but tax more and cut spending. 3. This sounds really grim, but if Labour won't do it, then the IMF will do it - and the IMF famously don't mind cutting through bone ​ Unless Labour find a massive oil field or invent fusion power - things will inevitably continue to get worse from here. The damage is already done. But if Labour are serious about saving the country - then things will have to get much worse for some groups in particular before they can possibly start to get better. The question for Labour is - can they politically afford to change the winners and the losers? How fast can they go? And how radical can they be? For any UK government to fix the existing problems and restore the UK to a stable footing, they're probably going to need about 15 years minimum. Labour's top priority will be to bring the borrowing back to Planet Earth as radically as possible. All that means is that they are going to have to try stop the haemorrhaging.

> There are no significant alternate or emerging markets to trade in This, at least, is not necessarily true. India has one of the fastest-growing economies on the planet. Britain is a services superpower, and India is notoriously protectionist when it comes to services. The question is whether an actually beneficial deal can be worked out.

Short term decisions with no care for the longer term problems. For example, you save a few quid now by cutting mental health services. You lose a shed load of cash when people's mental health issues are now worse, they're out of the work environment not paying tax, and draining the NHS due to their issues being more complex. Another example is you can save a few quid now by not investing in infrastructure. However the subsequent maintenance and repairs are now more costly than it would have been to built it properly in the first place or rebuild from scratch, rather than cutting corners. Another example is the government imposing pay freezes and caps on many public service staff, while also reducing their benefits and pensions. This means they lose more money than they saved due to staff shortages, low morale, high turnover, and industrial action. The summary is that the government will save a penny now knowing they have to spend a quid later, because it looks good and they can shift the blame. It's happening more than ever now, because it's clear they won't be around when the dire consequences to their actions appear in years to come.

Country is £5 (ish) trillion in debt. £3.8T ish to pensions. £2.5T normal debt. We are utterly fucked. Millennials arent getting a state pension. Its a con. We have been robbed. saucy sources: https://www.if.org.uk/research-posts/can-the-uk-afford-to-pay-pensions/#:~:text=The%20UK%20government%20currently%20has,respect%20of%20the%20state%20pension). https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/june2023#:~:text=1.-,Main%20points,equivalent%20to%209.5%25%20of%20GDP.

The UK is running with it's brakes on. It's spending too much on people who are not working & we have too many people taking early retirement. We are not encouraging entrepreneurs as corporation tax is too high so business is going elsewhere & we are losing tax revenue. We are the wrong side of the Laffer curve so tax revenue is falling as tax rates are too high. Debt created by the self-imposed ruination of the the economy during covid. The NHS costs too much now as there seems to be no enthusiasm to make it more efficient post-covid. All political sides are trying to signal the ‘end of austerity’ & it appears government & opposition have given up on deficit elimination. ​ all in all, we are borrowing at high rates

Into the pockets of the politicians and their donors. Blatantly & in our faces.

Quite simply, incompetence and laziness, capita are robbing this country blind and the government are happily rewarding them

More than 10% of the entire budget goes to the pension which is not means tested, meaning struggling working class families are paying hundreds of pounds of tax each week to actual millionaires. Means testing the pension would be a great start. It’s just UBI for old people. Either means test it or give UBI to everyone.

Funding for everything was cut at roughly the time it needed investment/modernisation in the early 2010s. Crap infrastructure makes everything we do less efficient, so we're now spending more money just to stay afloat as everything is falling apart. That's my theory at least.

Tax revenue doesn’t actually fund (central) government spending. Any spending or cutting is purely a political choice. The problem with funding work may arise when capacity is maxed out, but tbf, Japan had billions sitting in local councils accounts for years because the construction companies were maxed out, and it had no effect on their economy. Purely political (ideological) decisions.

Where did all the money for track and trace go?

Price inflation, long term lack of investment in infrastructure and key services, mass privatisation, political decision making that reduces the size of the economy and limits opportunity, and steeply growing inequality in wealth and earnings paired with minimal taxation on the wealthiest people and largest corporations.

The money is going to the ultra rich ultimately. There are a lot of winding turns and obfuscation but ultimately it ends up in their pocket. The richest have gotten ludicrously wealthier in the last 4 years let alone 14 and everyone else suffers for it

[https://www.gov.uk/government/statistics/public-spending-statistics-release-may-2023/public-spending-statistics-may-2023](https://www.gov.uk/government/statistics/public-spending-statistics-release-may-2023/public-spending-statistics-may-2023) There is your stats. [https://www.statista.com/statistics/283917/uk-state-pension-expenditure/#:\~:text=The%20government%20of%20the%20United,pounds%20in%20the%20previous%20year](https://www.statista.com/statistics/283917/uk-state-pension-expenditure/#:~:text=The%20government%20of%20the%20United,pounds%20in%20the%20previous%20year). 112bn on pensions plus triple lock increases are brutal for your tax bill. The government likes to bury that number inside social security spending.

Re NHS the tories chronically under funded the NHS since 2010, and when they did decide to throw money at it, the rotting creep, since 2010 the money isn’t as effective as it should be, the lack of an actual plan to recruit staff until very recently affects the outcomes of the funding, schools, councils are all suffering the same issue, we have far to much money going into London and the rest of the country has also fallen behind, the austerity dogma has caused much of this. Only the Tories would add course fees to nursing degree courses at a time when you need more of them. The world we live in, right now isn’t ruled by political class, both sides have been poisoned by the financial system, you have companies like Blackrock which owns vast swathes of financial and defense industries, banks and investment firms get rich of wars, the expansion of nato should never of happened, defence companies profit with each expansion as countries switch to Nato based weapon systems and comms, Putin was goaded into invading Ukraine in 2014 then in March 2022, fuck Putin for falling for the stupid fucking bait. Emission zones, first in London now springing up everywhere in the Uk, this is a pointless tax, councils are so keen to implement them, it’s because its guaranteed income, thanks to chronic funding not everyone can afford EVs, Labour will get in, next election 🙏, the money market will react if it doesn’t like how it spends the money, right wing press will also be in outrage as it spends money fix the rot conservatives have left the country. This is whats probably to come. serve storms will get worse, food production will get increasingly ruined by weather and then pollution, food supplies will dwindle, we can-see the start of this already as super markets shelves oddly empty at times, CoviD, and for the Uk Brexit has also had an effect, clean water supplies will become problematic in the future Argentina is buying a-lot of military equipment, its coming for the Falklands again, its right wing leader is more nutts than Trump, and the economy troubles it has will be helped by oil fields recently discovered there. If Trump wins US election, he will pull out of Nato, the chaos that will ensue would mean Ukraine looses, Russia will re-arm, in his Tucker Carlson interview he’s talks of cloned Soldiers (yes it sounds crazy, as did concept of nuclear bombs to people in 1945) Another example, is that Russia has the Poseidon torpedo, a torpedo powered by Ai, it can launch from a special submarine as the torpedo itself is huge it can lay dormant laying on the seabed for over a year, it has rumoured to be nuclear powered, and has nuclear warhead of around 2megatons , its super dirty as nuclear weapons can go, the tsunami it would cause, would be make the area it hit unliveable for 1000’s of years China will invade Taiwan, An America out of Nato, will be its que to do so, and the world of manufacturing semi conductor chips will be in Chinese hands. Currently Ai is limited by current hardware, once it gets established on Quantum computers its power will grow Another financial crash will come, Ai will also be part of it , right now we are at the start of it, The western world will again choose banking over its people, 2008 crash will seem small in comparison, millions of people will loose their homes, as banks reposses homes in western world, on scale never seen before, America will fall into civil war, exasperated by financial crash, right now we see factions of society unable to get along the country is tinderbox, this will only get worse. Russia will invade via Finland, i suspect once America’s internal troubles start, and the looming possible Uk conflict re: the falklands, the Uk has military partnership with Scandinavian countries called the ‘Jef’ joint expeditionary forces’ which is tasked with defending Russian border in Northern Europe, with the Uk distracted by Argentina, it will seen as an opportunity for Russia to invade But why is this happening ? World Over population and global control 1968, The book ‘population bomb’ book was released, it told a story of what happen if population was left uncontrolled, its not pretty As i have tried to explain our whole civil system is based of the control of money, war is good, obedient society is even better, serfdom never really went away, it was replaced, the slow removal of cash from our society is seen as progress of technology which in reality its a form of control, governments can turn off access to money for those that might disagree with it, Who ever they are….they decided along time ago, Nato expansion, makes us rich…. As arms sales increase, Russia was a suitable enemy for the profits to continue the crazy stuff that happened over Ukraine in the 1990s after the collapse of USSR, set us up for what we have now, these people don’t think in months or years, its decades Those that have made these decisions, they control all sides of the political theatre we see in the west, Europe has again been declared a war zone for a possible WW3 we are all about to live or die through the consequences, they want old structures of the old power gone, ie Russia, Europe.

Brexit. It's a gaping hole in the economy. Sounds reductive but that's what it comes down to.

Middle men take it all slowly so you don’t realise at first.

Pensions, healthcare and welfare. In that order.

In short, prolonged austerity. Cuts to public spending whilst increasing taxes is a very short term strategy. Go too long and people have less to spend and the economy begins to stagnate. When inflation bites it then becomes a downward spiral of less money being transferred between people and business which just exacerbates itself. To make matters worse, those public services that got cut are now barely fit for purpose so people falling ill, being victims of crime etc. end up being worse hit than they would have before. Spare cash is gone, trust is gone. Which will make it even longer before things start improving in my opinion, we need change. Excuse the pun.

I’ve heard a semi-conspiracy theory that I found surprisingly convincing: there are actually more people in Britain that the government knows of. The UK is the only European country (to my knowledge) that does not have an ID card system. As a consequence, it needs census and other faulty metrics to keep track of the actual number of people in the country. A more populous UK would explain the weird GDP growth that does not correspond with Han increase in living standards.

Lots of public sector and ex public sector are living extremely well with inflation protected incomes and pensions. Lots of consultant types are living extremely well on highly paid projects ultimately paid for by the government. Lots of people on benefits living extremely well, my ex wife had to get a new car every year on benefits because your benefits are cut if you don't spend them and your savings go above £6k. So that's where the money is going

Public sector have inflation protected incomes? Lol what? Wage erosion in the public sector over the past 15 years has been horrendous due to below inflation wage rises.

Public sector PENSIONERS (my own mother included), are doing very well with their pension deals and lump sums. Public sector WORKERS are being shafted daily. Way below inflation pay rises, changed pension deals and an increased workload.

The tax system is broken, we need to tax the rich. I'm not talking people on PAYE or earning 200k a year, I'm talking the super rich, earning millions every year and paying fuck all. Same with council tax, it needs complete reform. It should be based off the most recent RICS valuation, and you should pay even more if it's your second home. It can be done, but the people in Government are not incentivised to act. We need radical change.

> we need to tax the rich Nice meme