We, as a country, are broke. If interest rates go up, the cost of borrowing for the government goes up. This means more taxes and a never ending spiral. We haven't decreased the defecit at all, but increased it. Our debt is worse than Greece, Ireland, Portugal, Spain. There will come the day when the government will stop us taking money out of the bank or out of the country. Remember Northern Rock ? If they told us that we were in trouble, there would be a mass stampede for cash. The way out ? More taxes. This doesn't work though, because successive governments have tried it. To quote Winston Churchill " it's like lifting a bucket with the handle from the inside " Think the Rolling Stones have clicked with Doom and Gloom
No we aren't and no it isn't. UK assets are huge and far exceed debts. Greek debt is truly excessive for the size of its economy (which is small), but all other nations, including UK, Ireland, Portugal and Spain, have quite manageable levels. Attempts to bracket other countries with Greece are simply mischievous.
Some of this is dependant on how you define broke and manageable and I`m not sure about the asset value either as a paper price is not the same as the achieved price after a sale. Regardless of that I feel we owe too much , the debt is rising and I`m not happy with how my money is spent, or yours for that matter. When you add the income tax, vat, insurance tax, airport tax, fuel tax etc together then I am not comfortable with the % of salaries that is taken.
Ha-ha. The UK percentage tax take increased slightly during Margaret Thatcher's time, as it happens. Is that what you are referring to? It has hovered roughly between 36% and 39% for many years, and remains there.
Corrected for you Roy. Still, she did shut the mines down, creating 40,000 job losses, compounded. But back on topic, we might come to thank the hideous bitch for that yet. When the gas powered power stations go to the wall because the russians decide they want to keep it for themselves, we, will, at least, have a mining industry again.
Well, that won't be a lot of use will it? The Govt are just about to shut down half a dozen coal fired power plants..... Still, I suppose we could always boil some coal in a kettle on a gas stove........to make gas (Ack. to James Watt.........I think) AL
In the world of political rhetoric and media hype, Tory governments supposedly favour reducing taxation and expenditure, while Labour governments favour increasing taxation and expenditure. But in the real world of actual figures, the differences down the years have been very small. For example, Margaret Thatcher claimed credit for (or was blamed for) reducing taxation, but did not actually do so at all. I refer to tax take as a percentage of GDP, obviously (what else would it be?).
People tend not to understand the true figures and only look at the headline rates - 20% VAT, 40% Higher Rate Income Tax, 25% Basic Rate. The interaction between the various taxes - direct, indirect and things that are a tax but are called something else - and how they affect people - is less well understood. I remember watching a Budget on TV years ago where the Married Couple Allowance (added to the Single Persons Allowance for one of the spouses) was "frozen" at, oh I think it was £1720, but instead of being a deduction that affected your marginal rate of taxation, it was then capped at 10% (the lower tax band at the time). I realised immediately that this meant that taxpayers in the higher tax rate bracket would no longer get a tax deduction of up to 1720 @ 40% = £688 off their tax bill; basic rate taxpayers would no longer get a deduction of up to 1720 @ 25% = £430. Both sets of taxpayers would in fact get only 1720 @ 10% = £172. When the Chancellor had finished, I said, "This is going to cause a hell of a stink". It did, but only a year later when the changes were felt in people's pockets. People don't understand the figures.
Should have added the chart below is red for labour government and blue for tory. You didn't say that though, it's not so obvious in your post Pete. I don't think you've been brainwashed though, but do think your 39% is a bit high? In the last 14 years the £ take has doubled, but the % of GDP has only increased by 2%, that would suggest the economy has grown significantly? Tax as a % of GDP might of course be influenced by how successful the government is in collecting tax and which tax it is being successful in bringing in, but I'd agree that there is a general misconception on tax receipts on who is in power. VAT & NI bring in roughly the same amount. Income tax about equivalent to those added together. Corporation tax and Business Rates only a third of Income Tax. Fuel duties only brings in the same as Business Rates. So where the above mix is weighted makes a difference to how the public will view it. Certainly multi-nationals avoiding corporation tax ought to be a quick win target for any chancellor as long as it doesn't scare them away from inward investment.
Thanks for useful the table of figures. Oddly enough, the highest percentage in the table is during Margaret Thatcher's time and all later figures are lower! It's difficult to make accurate comparisons over a long period because of structural changes. E.g. What in 1980 were parts of government departments or nationalised industries are now privatised - any profits made then would go straight to the exchequer (not as tax), but now contribute to corporation tax. Some taxes (e.g. local government parking and congestion charges) are disguised as "charges". All figures are approximations. Perhaps I should have written 35%-38% instead of 36%-39%. Never mind. The point I was making was this: some people are asserting that taxes today are far higher than previously, but that is simply not true. The balance between different taxes has altered a lot, but the overall total not much at all.
Look at the £ tax receipts at the start of Thatcher and the end of Major, a 4 fold increase compared to the start of Blair to the end of Brown. I haven't adjusted for inflation, but it wouldn't take a lot of work to do that. This is simplistic in the extreme, but bigger growth in GDP under the tory government, North Sea revenues perhaps?
The £ figures surely tell us very little. GDP, inflation, exchange rate, public sector industries, oil revenues - all these have changed or fluctuated over time and would affect the raw £ figure. I suggest the GDP %age is more informative, if what you are trying to identify is the proportion of national income which passes through government (as opposed to the proportion remaining in private hands).
Yes, but WTF are the government spending all that money on? We have I'd argue poorer services than we did 25 years ago, yet revenue is 3 times higher, inflation would suggest it should be twice as much. That's a £200Bn difference?
