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..