Coffee House Shots Why is Britain's economy so unhealthy?
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Jun 14, 2025 In this enlightening discussion, Paul Johnson, Director of the Institute for Fiscal Studies, and Ruth Curtice, CEO of the Resolution Foundation, dive into Britain's troubled economy. They question whether the looming tax rises highlight deeper structural issues. The duo examines the lingering fiscal impact of the COVID-19 pandemic and the surprising disconnect between public expectations and government capabilities. Intriguingly, they share bold policy ideas, like overhauling tax systems to combat child poverty—imagine being an economic dictator for a day!
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UK's High Taxes Yet Poor Services
- Britain’s tax burden is at an all-time high, yet public service quality feels poor and demands have risen sharply.
- Increased debt interest, an aging population, higher social care costs, and defence spending drive this structural fiscal challenge.
Post-COVID Tax Rise Realities
- Post-pandemic, tax rises maintained spending levels amid rising demand and debt servicing costs.
- NHS demands consume an increasing share of public spending, reinforcing the need for adequate tax funding.
Austerity Misconceptions in UK Economy
- Despite public perception, the UK is not in austerity; recent spending growth slowed but did not reverse.
- Political narratives often misrepresent spending trends, confusing real term growth with austerity cuts.
