Best of the Spectator Coffee House Shots: why is Britain's economy so unhealthy?
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Jun 14, 2025 Paul Johnson is the Director of the Institute for Fiscal Studies and author of Follow the Money, while Ruth Curtice is the Chief Executive of the Resolution Foundation and a former Treasury fiscal policy director. They delve into why Britain's economy appears unhealthy, discussing the disconnect between high taxes and declining public services. They explore the lasting effects of COVID-19 and the public's mismatched expectations. Both guests share their dream economic policies, tackling issues like child poverty and housing taxation, offering insightful solutions to complex problems.
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Why Britain's Economy Struggles
- Britain's tax burden is at an all-time high but public satisfaction with services is low.
- Higher debt interest, aging population, rising social care costs, and increased defense spending strain public finances.
Rising Expectations and Shrinking Budgets
- The UK has become structurally poorer due to higher debt interest costs post-COVID.
- Public expectations are rising while available spending is shrinking, necessitating honest taxonomy and spending conversations.
Austerity Perception and Reality
- Public perception often lags reality, with many still believing austerity is ongoing.
- Spending is growing in real terms but at the slowest rate seen outside austerity periods.
