There was some flurry of concern when recently the UK state debt passed £3,000 bn. The debt has trebled since 2010 when the OBR was set up to help control all that borrowing! According to Labour much of the time since 2010 has seen public sector austerity, yet state spending has risen well ahead of prices and state borrowing has trebled.
The truth is £3,000 billion is a number that does not mean much to most people. If that is what it takes to provide public services so be it, say many. It only becomes a problem if one day the government discovers it cannot borrow any more to keep things going at anything like an affordable cost. That is what brought down the 1974-9 Labour government. They overspent and overborrowed. They ended up having to pay 15.5% for a new loan. The shortage of savers willing to lend to them also forced them to borrow from the IMF, with conditions attached to make them rein in spending. Then people get the seriousness of a government that cannot control the money and throw it out of office.
It is easier to understand what is going on if we set out the figures per head of the population. The state debt today stands at £52,000 per adult or £43,000 per person living in the country. Taxpayers have to pay the interest on that borrowing, now running at £1800 per adult this year. The government is likely this year to add another £2400 to the debt per adult as they borrow more to sustain their high spending. Each adult is having to cover benefit costs of more than £6000. State spending is £24,000 per adult.
Of you just take the figures per Income taxpayer then they become larger. State debt is then £75,000 on average, debt interest this year will be £2575, and state spending will be £35,000.
Perhaps the most realistic way to view the costs of the debt is to average it between the 8.5 million people who pay higher rate Income Tax. They are also the ones paying the IHT, CGT, Stamp Duties and higher Council taxes without receiving benefit payments back. They pay the bulk of the costs. So for each of them state debt is now £350,000, state spending £164,000 and state interest payments £12,000 a year. Within the 8.5 m the top one percent of taxpayers have been paying 28% of the bills. It is this group which is depleting as some leave the country to avoid penal taxes. No wonder, when you see the growing costs of the state and the impact is having on the debts those remaining have to help pay for. Each time a rich person leaves the burden gets bigger for the rest of us.
August 31, 2026
I am early retired and 4 years away from receipt of a state pension. My compliment to myself is that I draw down the tax free allowance from my private pension and thus deprive the wretched government of any income tax.. topping up my income with savings interest, etc.
I embarked upon this route because I was very concerned that the country was on the wrong path (to quote Burnham) and did not wish to fund the abuse of the asylum situation particularly.
The kicker is I made this decision in 2020, when the Johnson Conservative govt. was less than a year in. Don’t ask me how I feel now, apart from vindicated..
August 31, 2026
The problem is as liebour are slowly finding out, there are less and less high net wealth paying taxes. Many have fled including a large number of intelligent, skilled people. We have a 70s style Brain Drain.
Capital gains tax has risen this month as people sell assets but this is scheduled to fall as people change their plans.
The government is running out of revenue streams and is unlikely to be able to increase borrowing. We all know ow where that leads.
August 31, 2026
Yes that is what has been borrowed in all of our names, and most of it inefficiently spent and much wasted by our politicians, again in our names.
Meanwhile many of us out here have struggled and attempted to live within our means by limiting our own expenditure, and trying to save a little for a rainy day or for that unexpected expense and our future, knowing that by doing so, we will be limiting ourselves to any future help due to the means testing of Benefits.
The Governments reward for those who are trying to help themselves is simply more and more taxation, thus we are getting the “Why Bother” attitude that is now growing fast, and who can blame them.
Unless politicians change completely the way they think, spend, and act, the doom loop of more debt and higher taxes will continue.
There is now no incentive to even try to be financially self sufficient, because the government treats you like a mug, you are simply waiting to be robbed by the State of what you have gained over a lifetime of effort, and in many cases some financial self sacrifice.
No wonder those who can afford it are leaving for pastures anew.
August 31, 2026
Total global debt sits at roughly $346 trillion to $353 trillion, which amounts to roughly 235% to over 305% of global gross domestic product (GDP), depending on the database and tracking methodology used
These sums are unmanageable, they are so big that there is no realistic hope of ever paying them down. Politicians of whatever flavour blame each other. It was the previous administration’s fault. Or the one before that. Blame net zero or the disabled, who need to be soaked. Too many benefits scroungers/boat people/asylum seekers/etc are playing the system. Etc etc.
The truth is that here in Britain we closed down and/or sold off the means of wealth creation and have suffered twin deficits ever since. The current account gets worse with each manufacturing/services export firm that goes.
The trajectory of global interest rates is up. Both the Fed and the BoE are likely to put interest rates up soon, maybe September, which will make the situation worse. One does not have to be psychic to see that the mother of all credit crunches is coming.
One solution for poor old Blighty would be to take a Beeching style axe to the huge QUANGO sector, which accounts for about 30% of government spending. And we cannot afford to pay their manager’s non-contributory, index linked, final salary pensions funded by the taxpayer
August 31, 2026
Methinks Gold Man speaks with forked tongue based on previous posts. Our host has explained numerous times that wealth creation through industrial production is dependent on cheap energy which has been and is denied to us by various governments this century by their crazy ‘save the world’ policies.
August 31, 2026
Correct.
August 31, 2026
Nobody denies that a national debt at about 100% of GDP, with the Treasury being forced to pay 5% interest, is unsustainable.
Many politicians demand that this tax or that tax needs to go up. Or down. Playing the blame game is a national sport. The welfare budget is frequently blamed by the rich. Or the pensioner’s triple lock
We need an informed national discussion on how this situation is to be dealt with. We need practical solutions from our politicians about spending cuts to balance the budget. Except, of course everyone’s else’s department budget must be ring fenced.
There has been a truly enormous increase in the numbers of civil servants since the pandemic. Rapidly replacing them with AI might be inevitable and would save a lot of money for defence.
There are £billions and £billions of organised crime profits being laundered through the Post Office, literally carrier bags of used notes according to the recent BBC investigation. We are not getting value for money for what we spend on the police. Seizing some of that would help the Treasury.
August 31, 2026
For once you are 100% correct. The problem is the main cause of damage to the UK industrial economy is your green agenda.
August 31, 2026
Correct.
August 31, 2026
Labour’s doom loop economic plan continues, initially kicked off by the dire Rachael Reeves who actually left office believing she had made things better! The main doom loop policies are scrapping non dom, over taxation of everything, the vast NI grab (a breach of their manifesto), the bloated state sector, the workers rights act, the tenants rights act, the net zero lunacy, over regulation of everything, failure to deter crime, over restrictive planning, OTT building regs, English Nature and their bat tunnels and fish discos…
August 31, 2026
& the spiteful and conterproductive VAT on school fees!
August 31, 2026
Tom Tugendhat who was (is?) a big fan of not leaving the ECHR and voted three times for May’s appalling not a Brexit deal is to replace Priti Patel? Really Kemi?
Tom Tugendhat read theology at Bristol and later completed a Master’s degree (MPhil) in Islamic studies at Gonville and Caius. A climate alarmist too who seems to thinks CO2 is dirty!
Not remotely a real Conservative in my view.
August 31, 2026
Her shadow chancellor was the driving force behind IR35 which kyboshed self employed and created shortages of trades. 46 % of Tory MPs support wrecking the industry economy with Net Zero. But most ex Con voters including my bird are going to split the right vote and think the sun shines out of Kemi’s …. while disliking Nigel. The Uniparty is at it again.
Reply Nonsense. Conservative policy is to pursue cheap energy and get rid of damaging net zero targets. The whole party front bench is signed up to that. There is no Uniparty
August 31, 2026
Another way to look at it is to consider the debt added to voter ratio. So for example in the last parliament a Conservative government added about £800bn to national debt thanks to 14 million Conservative voters. That means about £57k per voter. I’d like them to repay that money. If it was the rule you had to pay the cost of your vote, people would be more selective about who they voted for.
August 31, 2026
And the debt of the average American is $114,286.
August 31, 2026
Indeed but look at the growth rate of the US
August 31, 2026
@majorfrustration – debt in itself is not the problem, its having the means to repay it. The UK Parliament cancelled the means to satisfy thier ‘ego’ and self
September 1, 2026
+1
September 1, 2026
As if all Americans were benefitting from the growth of the Gross Domestic Product…
Most of the recent US GDP growth has been in software development and IT services, artificial intelligence and machine learning, financial technology, robotics and automation, biotechnology and pharmaceuticals.
It covers a non negligible number of companies and workers, but I still wonder whether for example the US farmers or labour-intensive sectors like hospitality have seen much of that growth. The K-shaped economy was the new buzzword following the Covid years. It still applies today.
September 2, 2026
You are so gloomy hefner.
Unable to cheer USA economic growth you resort to moaning that not every single sector and not every single citizen has benefitted equally.
If you know of a way any economy can achieve your lofty ideal then do tell us.
August 31, 2026
The government debt is also driving up your mortgage rates hugely. Some people fixed rates are going up by 3 times plus on expiry.
A shame about £1.6 trillion was borrowed and then spent doing doing vast net harms with net zero and so called “renewables”, the botched Brexit, HS2, net harm Covid Vaccines, net harm Covid Lockdowns…
Net Zero fans keep taking of the need for more and better storage but do they understand how much CO2 is caused by building storage this storage and the costs? I assume not as they rarely know very much but it is huge if you do the accounting. RENEWABLES are not exactly low in CO2 per KWH either – when properly accounted for.
August 31, 2026
I’ve been in France for 2 weeks where half of the businesses in towns are closed or about to. French government debt is 260bn euros which is similar to us, and they are paying about 66bn in interest, which is much less than the UK. This would indicate that the UK is considered more at risk of default. It’s interesting [pun intended] that my wife’s French mortgage which was supposed fixed at 1.7% for her French property has suddenly increased to 4.7%. I wonder whether this increase applied to French loans.
August 31, 2026
French total debt €3.6 tn, 115.6 % of GDP.
In 08/2026 the French averaged nationally fixed mortgage rate was 2.99% on a 10-year loan going to 3.29% on a 25-year loan when taken directly from a French bank.
There are some (small) regional fluctuations. Most French mortgages (>90%) are fixed rates, but beware a few unfortunately often offered to foreigners are not and follow a cheaper start then higher rate later.
meilleurtaux.com ‘Baromètre des taux immobiliers- Août 2026’.
frenchpropertyexplained.com 26/09/2025 ‘The ultimate 2026 guide to get a French mortgage as a foreigner’.
August 31, 2026
Median wage in England is £39K per year.
That represents £12,600 in income tax and NI. Assuming that the government collects £1,500 in VAT, £500 in interest tax and £2,600 in council tax from that median earner then that is only 2/3 of the spend per person.
It might be a good idea to set the annual expenditure rate at the likely amount that can be collected. Allowing for stamp duty, CGT and corporation tax that looks to me like a 20% reduction i spending is needed.
Public sector pension contributions at 29% is a good place to start, immigrant costs and sickness benefits are another. State pension should only rise by the level of average earnings rise and benefits should only rise by 1% less than average earnings.
Scrap foreign aid fall all bar events like Nepal and make the armed forces defensive and fully funded.
August 31, 2026
It might just be my imagination but I think people are getting more concerned about “things”.
The check-out lady at the supermarket on Friday commented that she was about to take some “holiday”. When I enquired where, she said she would be staying at home – as she didn’t want to venture “too far at the moment”. Yesterday at a social gathering, the half-dozen ladies present started taking about stocking up on canned food. I asked the lady who started the conversation why she was doing so? She didn’t have a clear answer, just that it seemed to be a good idea “with everything going on”. A number of the ladies nodded in agreement. I was somewhat suprised, although we’ve been quietly doing this ourselves for a while now. One of the gentlemen present commented later that he felt we ( ‘Boomers’ ) had been the “lucky” generation – enjoying 80 years of relative peace and prosperity. Unfortunately, it’s beginning to look like our children and grandchildren might not be as lucky.
August 31, 2026
It won’t help.Tinned supplies would only last a few months and then what?
September 1, 2026
Frankly I’m thinking more about supply chain disruption than Armageddon MBJ.
We have a freezer full of food too and that wouldn’t survive a long power cut. However, we like to take advantage of ‘special’ deals etc to stock up. Food inflation isn’t going away any time soon.
With regards ‘Armageddon’ (and having recently watched a “Prepper” video out of curiosity) I don’t think there’s much we can do here in Wokingham. When society does break down, my concern will most likely be from Pelotons of feral Lib Dems running (cycling?) amok in the neighbourhood, looking for ICE vehicles to set alight. Fortunately, we don’t have a cycle-way outside at the moment, so we may be spared the worst of it..
August 31, 2026
This government is out of control and will continue to spend whilst damaging growth in the economy
August 31, 2026
Your post highlights the point that the bulk of taxation, and in particular, income taxation, is paid by a small percentage of the population, so that for the great majority, the tax burden is something they are happy to ignore, and therefore there are very few votes to be won by reducing it. The logic behind the ill sold Community Charge, was that it should give everyone a stake in paying for what was spent on them. Thus far flatter spread of the tax burden could well be a first step in getting support for reduced expenditure, but I cannot see that happening from any of the present party leaders.
Mrs Badenoch even appears to think that Tugendhat is a Conservative.
August 31, 2026
That’s £3trillion in the new maths
August 31, 2026
Yesterday the Express ran a similar item
Starmer and chancellor Rachel Reeves instantly went on a tax-and-spend spree. Reeves raised taxes by £66billion across her first two Budgets and spent an extra £100billion a year. By 2029, total extra spending under Labour will exceed £650billion
Then to add to ‘Our’ personal Dept…
Burnham promised £2 bus fares, 5% reduction in VAT on electricity around £1.4 million in promises from the the get go.
Then Burnham has promised £442million to tackle rough sleeping, £60million for free 24-hour bus travel for disabled people and £2billion for zero-emission buses in the West Midlands. He’s also lined up a £39billion Social and Affordable Homes Programme. His proposed National Care Service could cost up to £18billion a year
There is no Parliament sitting, so even if they were inclined to hold him to account they can’t – these are the ruler Burnham’s promises. He is spending ‘other peoples’ money like there is no tomorrow.
The magic bit the UK Parliament has cancelled, industry, production enterprise and the means for the Country to ‘earn’. He is achieving the WEF Socialist Dream, you work for the State, they will provide (with what?) and if you are lucky you may be allowed spending money
August 31, 2026
These figures are truly shocking.
Successive governments, starting with Cameron’s coalition, increased the point at which one starts paying tax, at the insistence of the Lib-Dims. This daft policy continued, meaning that vast numbers of citizens now have no interest in keeping tax rates low. Of course with inflation, under Labour, the position is being reversed a little, but that is more than countered by the sheer number of people now living entirely on benefits.
In 1980, we moved to Germany for five years, where my employer paid our tax bill. When we returned, the tax burden was OK, but under Blair, it rapidly climbed and with a wife and two young children to support, I realised that, as well as ourselves, my income tax alone was supporting the full cost of at least one unmarried mother and her flat !
At that point I redressed the situation by becoming self employed.
Now in retirement I still manage our investment portfolio which includes quite a selection of buy-to-let properties, acquired between 1985 and 2000. We would have sold off at least half had Brown not removed Taper Relief and Osborne not gone on to increase the rate.
The BTL’s no longer make any money, in fact, we will be lucky to break even this year, but selling will result in no cash surplus thanks to CGT. In fact, our sons would pay no more in IHT than we would in CGT but it seems that Labour are actually thinking about charging our estates with CGT then levying IHT on top, after which they will be left with nothing !
I was
August 31, 2026
Chris S
Yes the Government like the idea of double taxation, the same will apply after April 2027 with unspent pension funds, 40% IHT on death, and then Taxed at their own personal rate (20-45%) when withdrawn by the survivor.
A Life long saving plan obeying all of the rules at the time, now out of the window and into Government coffers to be hosed down the drain, like so much of our taxes.
“Why bother” may as well hose it down the drain myself and save 40% on foreign cars, goods, holidays, and cruises, given we manufacture/make nothing much I now want to purchase in the UK.
Shame as my kids (that have poor pension arrangements, as not being employed in Government departments) would have found it useful to help maintain a reasonable standard of living when I have gone.
They have said “spend it Dad, you earn’t it”
August 31, 2026
Lord Redwood, you of all people should have realised by now this Socialist UK Parliament doesn’t do figures, maths or budgets. As long as their ‘ego’ tells them they are doing a good job they will believe.
After all the State is growing recruiting, they are awarding higher wages for their State Workers still maintain their free pension and not delivering on anything. They have increased and raised the amounts in the benefit pool.
The UK’s Parliaments new leadership has made promise after promise without a single question or challenge. Theses promises are read as a given, a fact something already achieved.
The missing link, besides a brain cell to be shared around the UK Parliament is the ability to ‘earn’, for the Country and the People paying Parliaments bills to earn – the UK Parliament has cancelled that, cancelled everyone’s future future.
The undeniable rule ‘its the economy stupid’
August 31, 2026
The size of our debt shows what appalling governments we have had over the last 25 years. There is no way the UK can carry on like this without a financial crash. Our new PM has already shown he is a dreamer and a drifter, but not one who will take the hard decisions needed. Government spending is out of control, Taxation is far too high, immigration is far too high, Civil Service employment is far too high, the cost of Quangos is far too high and yet spending where it really matters, on defence, is put on the back burner!
We have a Chancellor who resigned a couple of months ago because the then Chancellor/ Treasury refused to fund defence at 3% by 2030. So what does he do in his new office? He refuses to fund defence at 3% by 2030!
Burnham and Healey are just two more straw men with no backbone.
August 31, 2026
It has become very clear that the people who have been running this country since Thatcher was overthrown have done a lousy job with the economy, but when did they ever face censure? The threat of losing power is certainly not enough to make them perform adequately, for our advantage.
MPs and others put themselves up for the top jobs knowing they are not up to it and fail to adapt to even the most basic economic lessons of the last 100 years. They put forward their irrational programs that depend more on ideology than considered logic and best practice. They should face penalties for making things so bad!
We need better quality MPs. It’s no longer enough to be vetted by a party’s machinery for criminality – we need to know they have some marbles and know how to use them. They must have potential as well as experience, but clearly they must have had a good British education.
Personally I would exclude anybody that admitted to being a socialist by nature, simply because this class of MPs has failed us so frequently, but also because so many of them hate the fact that Christianity was one of the things that made us great.
September 1, 2026
I’m rubbish at intellectually arguing for the role of Christianity in our great civilisation and culture but I highly recommend people listen to and read Tom Holland and John Lennox on this.
August 31, 2026
A potato at the Dorchester is the same as a potato in your balcony garden.
August 31, 2026
In spite of all alarm signals<or doesn't give a damn?One Dame Rachel De Souza is pressing Burnham for
even more handouts/financial support.Some falling on government and lots falling on employers private
local government and ministerial departments.Undoubtedly she is a very capable woman(Boris was
persuaded) but she gives the impression that her cause is rightful and not subject to debate.She has
carefully weighed-up her innocent prey
August 31, 2026
Our media rarely take the time to explain our national debt and especially tax implications and who actually contributes the most. Today’s diary lays it bare. Labour and Lim Debs remain ignorant preferring an ever larger welfare state disregarding reckless levels of borrowing. There is so much waste within government departments and quango institutions. Our cherished NHS, bloated beyond belief, and dreadfully inefficient, and the MOD must waste billions of taxpayers money each year. Even Burnham’s No. 10 North is costing millions in policing and security. I’m unsure this vanity gimmick can be justified? Eventually and it could be soon, the bond markets will call time on UK levels of debt and we will be facing a huge crisis.
September 2, 2026
When Labour won the vote to seize power over private pension pots the writing was on the wall of their next moves.
Then Usuala von der Leyen let the cat out of the bag saying money stuck in household bank deposits is ‘lazy’ – yet that money isn’;t in a vault or stored in gold its lent out already. Labour is on board for the UK and want to rewrite financial regulations, they’ve already rewritten pension rules. Whilst always protecting their MP schemes and other public sector defined benefit pensions.
As public finances are seriously stretched as you indicated, they need to dip into our safety nets to fund their green transition and other promises to economically inactive people. When our country has six-year-olds seeking mental health services we’re in the path of the tornado.