The Briefing Room
The UK’s financial headache
Sep 21, 2023
Guests Paul Johnson, Mehreen Khan, and Torsten Bell discuss the challenges of managing the UK's national debt, increasing taxes, the financial implications of the NHS long-term workforce plan, the cost and benefits of the UK's net zero plans, aligning economic policy with market interests and voter demands, and the strategy behind economic promises in UK election campaigns.
28:32
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Quick takeaways
- The UK's national debt is projected to remain around 100% of national income, the highest since the 1960s, posing challenges for major parties committed to reducing this debt in the medium term.
- Despite the UK's tax revenue reaching record levels, it is still insufficient to meet demands of public spending, with rising healthcare costs, low growth, and high interest payments. Other European countries have higher tax rates generating significantly more revenue.
Deep dives
Projected State of Public Finances
Despite borrowing levels decreasing, the overall national debt in the UK is projected to remain around 100% of national income, the highest since the 1960s. This poses challenges for both major parties as they are committed to reducing this debt in the medium term. However, paying off debt interest payments, increased taxes, and tight budget plans make it difficult to achieve this goal.
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