Three Charts That Show the Devastating Impact of Lockdowns on U.K. Finances as IFS Warns There’s No Room for Tax Cuts or Spending Splurges
Three charts show the devastating impact that Covid lockdowns had on U.K. public finances as the Institute for Fiscal Studies (IFS) warns that neither Labour nor the Tories have any room for tax cuts or spending splurges. The Mail has more.
Labour was given a stark warning today that it will not be able to cut taxes and pump money into public services if it wins the election.
The respected IFS think-tank has poured cold water on signals from both main parties that they will ease the burden on Brits.
Keir Starmer’s allies have been hinting that income tax and national insurance could be in their sights – while the Tories are also looking at inheritance duties.
However, IFS director Paul Johnson said this morning that he is “surprised” by the speculation given the state of the public finances.
He told BBC Radio 4’s Today programme that “all of the pressure” was in the direction of spending more to shore up services, suggesting those levels could not be maintained while cutting overall taxes.
Making a New Year speech in Bristol today, Sir Keir cautioned his party that it cannot resort to the “big state cheque book” to solve problems.
But the scale of the challenge faced by politicians is laid bare in charts revealing how Covid and spiking inflation has pushed Britain towards becoming a ‘high tax, high spend’ state.
As a proportion of GDP, public spending is predicted to run well above pre-pandemic levels in the coming years, despite complaints that services are being squeezed. …
Charts produced by the Treasury watchdog [the OBR] showed how Britain struggled for years to recover from the shattering blow of the Credit Crunch, with the Coalition pushing through tough austerity measures in a bid to balance the books.
But Covid triggered a whole new level of chaos, with public spending going into overdrive as the state paid furloughed workers, bailed out stricken businesses and propped up the healthcare system.
If that was not tricky enough, the recovery phase from the pandemic saw inflation run riot around the world – and hit the U.K. particularly hard due to the open nature of the economy.
The devastating impact of the lockdowns on Britain’s finances can be seen in the following charts from the IFS.
Worth reading in full.
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This government has cost the country billions upon billions of pounds due to lockdowns and other covid-related nonsense (PPE, track and trace, eat out to help out, useless gene therapies, etc). This money can never be recouped but something that can be done is to dramatically cut public sector spending.
The non-conservative Tories have expanded the state beyond all recognition and this needs cutting with a scythe. There needs to be a cull of the hundreds of thousands of useless public sector jobs, starting with the DIE managers. If they have a modicum of talent, they may be able to get jobs in the private sector as admin assistants.
Spot on. Unfortunately, this is one of the main reasons that the Tories are hemorrhaging support. Since Mrs. Thatcher was ousted, the spineless, dripping wet majority in the party have never had the cajones to cut back the state nor reform the NHS. It’s taken 30 years for many of them, but more and more of their supporters can see how much the party has let them down.
And so say all of us.
I’m an old school Conservative. Two things I wanted when voting for Bojo.
Won’t be voting this year way things are. Reform – yeah, but Tice is a nobody.
Better to vote Reform and shake thing up than not vote. If you don’t vote, you can’t complain about the result. Tice is a smart and competent businessman.
Tice is a “don’t scare the horses” leader: pleasant, easy on the eye and with sound business experience.
Farage, Habib and Widdecombe supply the passion.
Where is the Magic Money Tree when you need it?
Already been stripped bare.
Uprooted indeed
Recession….incoming!
All going to plan for the Davos Deviants. Once this country is in hock to the central bankers we are well and truly Tom Ducked.
Jonathan Lis on Talk Tv via New Culture Forum !! What a leftie Chunt !!…
Then cut spending – reduce the civil service; privatise more of the NHS (overdue anyway); get rid of some benefits; cut overseas aid; stop assistance for migrants?
Go French. Their system works jus fine. Problem – we don’t have the nous to effect the switch and there would be a public sector general strike – “Save our beyond useless NHS” would be the slogan
https://edmhdotme.wpcomstaging.com/why-the-health-service-works-in-france-11-2022/
‘….the scale of the challenge faced by politicians….’
The IFS highlights the symptoms.
The disease is socialist fascism.
The real challenge faced by politicians is, first, to reform themselves:
Get rid of the ‘payroll vote’ by dramatically reducing the size of government, the cabinet, double MPs salaries to improve their calibre and increase their independence. Abolish the House of Lords and set up a professional second revising chamber appointed by an independent commission.
None of this will ever happen so, instead, a system of proportional representation is required. First past the post has run its course.
Oh, and remove parliament from the ‘Palace of Westminster’.
They deserve a modern building of utilitarian design.
“They deserve a modern building of utilitarian design.”
Totally agree. I believe the very large warehouse style building that was once occupied by Staples, the office supplies firm, in that fine place called Stevenage New Town, is empty. Stevenage has great transport links by road and rail, affordable (for the Southeast) housing, great shopping. What more could they wish for?
The British parliamentary system was invented by aristocrats as a way of governing in an aristocratic way. Aristocrats went up against other aristocrats and were elected by people with money or property. As the pressure came on for reform of the voting system (otherwise revolution might ensue), they had to modify it to suit this new, wider franchise. So we still have an aristocratic system that is well past its sell by date perhaps. We also need to be done with the Norman feudalism that is the Royal family. The sovereign still owns everything – you hold the deeds to your house ‘freehold’ (free to hold unless the sovereign decides otherwise). So we are all still serfs working within a Norman invaders rule set. I suggest PR for MPs, and only 150 of them. An elected revising chamber also of only about 100 members. And perhaps keep the royals but with no powers to approve any legislation whatsoever Also we should have referendums for all legislation. The people would be the final approvers of laws. The MPs and revising chamber would only advise us. Also that way there would probably be a strong brake on too much legislation because it… Read more »
The UK is over £2trillion in debt and November’s debt interest payment was over £7billion so around £80nillion a year, give or take a few billion!
With our levels of debt and ever-increasing public sector, taxes cannot be cut without increasing taxes elsewhere.
So the question for every politician to answer is – What services will you cut to make savings?
A few ideas to get the ball rolling:
Turn the NHS in to a social insurance model and introduce competition
Scrap the Climate Change Act and Net-Zero
Reduce the Civil Service, Johnson promised to get rid of 90,000 of these leaches.
Scrap the public sector pension scheme and replace with a defined contribution scheme
Fulfil the “bonfire of the quangos” the Tories promised to carry out
Socialists always run out of other people’s money.
1997-2009, it was the Red Socialists who did it.
2009-2024, the Blue Socialists have done it.
Now it seems, it’s to be the Red Socialists turn again.
Unless a miracle happens and we get REFORM.