(Edit - apparently what I can tell is not quite accurate, but it’s possible the UK is paying 8-15% of the government budget in interest each year, which is still quite a chunk)
From what I can tell from listening to a lot of UK news still, the country finds itself economically stagnating while suffering from a level of debt that makes debt repayment the second largest chunk of government expenditure after the NHS.
There’s so little room for manoeuvre that successive governments are left tweaking the edges of the budget but unable to carry out any major plans or reforms.
And on the subject of Reform… they think they’re going to axe fat from the administrative budget at every level by emulating Elon Musk, when it’s not clear there is a lot of fat. There’s only so many diversity officers to fire.
Hard to see what the future is there at the moment.
Sometimes you can tell which politicians are serious about bringing order to budgets by seeing which ones are talking about what hard cuts they would make. Are they talking about cuts to entitlements and military? Or are they talking about cutting the park service and "diversity hires"?
It's like the family drowning in debt who decides to cut mom and dad's weekly trip for Starbuck's Latte at the Farmer's Market. Yet won't look at the two car payments, the USD500000 mortgage, or the private school tuition for the kids. Maybe in their hearts they believe it truly is the way out? But a good financial advisor would probably tell them not to worry about the fly on their toe when there are 4 or 5 elephants stacked on their chests.
And it can be hard to receive those kinds of messages. As hard for individual families as it is for nations.
Not to mention the ongoing spending programs of continuing the past tax cuts of Sunak, Johnson, May, Cameron, Brown, Blair, Major and Thatcher. Tax cuts are spending programs.
I'm just saying that things like the Park Service are the least of the worries. To the extent that it makes people feel good, please, go ahead and make cuts to the Park Service. But that can't be the plan to restore good financial order. It takes wayyyy more than that if we're being honest.
> that makes debt repayment the second largest chunk of government expenditure after the NHS.
Are you sure about this? If you scroll down to the pie chart on the following page, health is not the largest chunk of expenditure (that’s social security) and interest on debt is fifth.
There is both a lot of fat and also cutting it won't solve the problem. The fat is worth cutting for political reasons alone.
It's still years away from the next election so it's hard to know what economic angle Reform will run on. But it will probably have to be one similar to the 2010 coalition, where the need for spending cuts was explicitly advertised and voted for.
You should look at the total effect of debt if your intention is to study what would happen without debt. So the total effect is:
1) 150 billion per year net new borrowing
2) 115 billion per year interest payments
Conclusion: the effect on the budget of stopping this whole debt thing would be a net cost of either 150 or 265 billion per year (because you "lose" the new debt, but you still have to pay the interest payments), or about triple the current budget cost of debt, or 12% to 21% of the total government budget.
The cost of making the debt fall as fast as it was rising would be 150b + 150b + 115b = 415 billion per year, call it 33% of the government budget.
In contrast, making the problem worse at the current rate has a 3% positive effect on the budget. This will not change in the near future. It's exponential and it itself rises at about 8% per year, in other words, next year it'll be 3.2% (and the government could choose to force the banks' hands to get that down)
In other words: the government will do the opposite of what everyone's suggesting here, regardless of labour vs conservatives. Either party will increase lending and make the problem worse, faster. Why? Simple: they sure as hell aren't about to give up a quarter of the budget, especially when worsening the problem actually still has a positive effect on the budget (and a strong negative effect on the problem). Note that the interest payments are actually the smaller part of this. Not borrowing fresh money is between 60% and 70% of the "cost".
Which also shows that the problem is not the rich. Well, unless you count the government. And yes, I count organizations that spend 10% more than they "can" as rich. If spending more than your fair share isn't being rich, I don't know what is.
Furthermore the "reduce debt" is a trap argument. It ignores forget ... we die. Most of UK government expenditure is labor. In other words, reducing the debt, even just stopping the rise in debt, is effectively asking us to work harder now, in trade for the country being in a (let's be honest - slightly) better position in 10 years. So you're expected to give a lot up now, in trade for giving the rich more money now (and less in the future). But you'll die, and if you're 40 or above, the calculus will show that you'll get more government services before you die at 72 if we let the situation become worse, rather than fix it.
From what I can tell from listening to a lot of UK news still, the country finds itself economically stagnating while suffering from a level of debt that makes debt repayment the second largest chunk of government expenditure after the NHS.
There’s so little room for manoeuvre that successive governments are left tweaking the edges of the budget but unable to carry out any major plans or reforms.
And on the subject of Reform… they think they’re going to axe fat from the administrative budget at every level by emulating Elon Musk, when it’s not clear there is a lot of fat. There’s only so many diversity officers to fire.
Hard to see what the future is there at the moment.