{"id":295587,"date":"2025-06-15T20:02:33","date_gmt":"2025-06-15T20:02:33","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/weekend-reading-the-british-disease\/"},"modified":"2025-06-15T20:02:33","modified_gmt":"2025-06-15T20:02:33","slug":"weekend-reading-the-british-disease","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=295587","title":{"rendered":"Weekend reading: The British disease"},"content":{"rendered":"


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What caught my eye this week.<\/em><\/p>\n

I<\/span> don\u2019t remember spending reviews being such a media event in previous years. But this week\u2019s got nearly as much attention as a Budget \u2013 despite telling us almost nothing we didn\u2019t already know.<\/p>\n

I suppose it\u2019s because the free-spending days for Britain are long gone. Everyone is now watching their pennies.<\/p>\n

Of course even before the financial crisis, Brexit, Covid, and the war in Ukraine, there was never enough money.<\/p>\n

But after all these shocks the country has become like a working class family of yesteryear who has fallen on hard times.<\/p>\n

The head of the household budget takes the too-slim pay packet from the breadwinner \u2013 and any pocket money scavenged up by the kids \u2013 and parcels it out into envelopes and jars to budget for the month ahead.<\/p>\n

Food. Rent. Money for the coal man.<\/p>\n

A few little treats for the baby.<\/p>\n

It\u2019s tough. More money is going out \u2013 but not enough is coming in.<\/p>\n

It\u2019s not that Rachel Reeves is taking us back to post-financial crisis austerity.<\/p>\n

Real terms spending is set to rise<\/a>.<\/p>\n

Rather it\u2019s that not enough money is being generated at the top of the funnel to pay for the British state that we\u2019re used to, let alone the one we aspire to be.<\/p>\n

Tax\u2026<\/h3>\n

This lack of cash persists even as the government taxes us until we squeak.<\/p>\n

The average Briton was handing over all their income to HMRC until the Thursday just gone \u2013 the so-called Tax Freedom Day for 2025.<\/p>\n

To quote the right-wing Adam Smith Institute:<\/p>\n

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Tax Freedom Day [fell] on the 12th June.<\/p>\n

This year, Brits are working 162 days solely to pay taxes, six days longer than last year.<\/p>\n

But [we] expect that by 2028 the UK will have its latest Tax Freedom Day ever, 24th June.<\/p>\n

This would mean that the tax burden could be higher than it was during WW2 and The Napoleonic Wars.<\/p>\n

This is based on current Government taxation and spending plans, and OBR projections.<\/p>\n

By as soon as 2030, Tax Freedom Day could fall over half way through the year with taxation exceeding 50% of Net National Income.<\/p>\n

The research also shows that the rich are carrying an increasingly large proportion of income tax.<\/p>\n

Cost of Government Day, which factors in borrowing as well as taxes, is July 22nd \u2013 the latest since the pandemic.<\/p>\n<\/blockquote>\n

The Adam Smith Institute has its own agenda to promote. But you can\u2019t really argue with the numbers.<\/p>\n

\u2026and spend<\/h3>\n

I didn\u2019t find much to object to in the spending review, in terms of where the money is going.<\/p>\n

The tilt towards thinking about the future versus short-term bungs is admirable, in so far as it went.<\/p>\n

Support for infrastructure and house building is sensible. Insulating Britain\u2019s draughty homes and money for more nuclear reactors are no-brainers if you believe like I do that humanity is behind in the battle to avert serious climate change.<\/p>\n

Higher defence spending is inevitable. Albeit frustrating in that if it works as a deterrent, then we (hopefully) won\u2019t ever use in anger much of the expensive hardware we\u2019ll be paying for.<\/p>\n

Personally I\u2019d like to see far more spent on education and training. A better educated and more skilful population could help to address Britain\u2019s lamentably low productivity.<\/p>\n

More capable homegrown workers are also necessary to fill the structural vacancies following Brexit, especially if \u2013 as I accept is politically required \u2013 immigration is to really be brought down.<\/p>\n

Not least when it comes to building those 1.5m new homes we\u2019re promised.<\/p>\n

Little Britain<\/h3>\n

Of course we all have our priorities as to how the government should redirect that tax money it takes in.<\/p>\n

Have a read of the links below. Applaud or fume to suit your fancy.<\/p>\n

What did dismay me though was the nationalistic tone of some of Reeves\u2019 rhetoric.<\/p>\n

Britain will make this! British workers will do that!<\/em><\/p>\n

As if this isn\u2019t obvious.<\/p>\n

And as if doing it ourselves is always the best solution versus trade.<\/p>\n

Well, it\u2019s not.<\/p>\n

Just one example is the hullabaloo over British Steel. Despite various governments intervening and spending to keep this industry on its last legs for decades, the total number of workers employed has fallen from over 330,000 in the 1970s to barely 30,000 today.<\/p>\n

We\u2019re producing vastly less steel too.<\/p>\n

But is that such a tragedy?<\/p>\n

If you are a steel worker and you can\u2019t find work elsewhere, then yes \u2013 and Britain for sure did a lamentable job in helping its skilled workers as their industries declined through the 1970s and 1980s.<\/p>\n

But from a national perspective?<\/p>\n

The world makes far too much steel. That\u2019s why there\u2019s a glut and why these plants are permanently imperilled. And with our high energy costs and general dislike of dirty and polluting industries, Britain is one of the worst places in the world to make it. Not that we even need so much of the stuff these days.<\/p>\n

But that\u2019s fine. We can just import it and do other things we\u2019re better at!<\/p>\n

It\u2019s called comparative advantage<\/a> and it was all hashed out hundreds of years ago.<\/p>\n

The idea that Britain can \u2013 or should \u2013 have an independent steel-making industry is for the birds, and for Reform voters.<\/p>\n

Britain isn\u2019t even self-sufficient when it comes to food. In any now-unthinkable conventional war where imports were somehow permanently blockaded, we\u2019d half-starve.<\/p>\n

Besides even if we have steel plants, we don\u2019t produce our own coking coal or iron ore anymore. So that would need to be imported anyway.<\/p>\n

\u201cWell we should be digging that up too!\u201d<\/em> you might retort.<\/p>\n

I fervently disagree, but understand that if we were to go down that path it would mean billions and billions more in government subsidies and interventions that could instead be spent on boosting something we\u2019re actually good at and the world wants more of from us.<\/p>\n

As a nation we\u2019d be poorer as a result of your sweatshop fetish<\/a>.<\/p>\n

If we must have a more secure steel supply, then let\u2019s just import five year\u2019s worth of it as a buffer while it\u2019s cheap, stockpile it in a few giant warehouses, and call it a strategic reserve.<\/p>\n

I\u2019m sure we\u2019ll never need to draw upon it. But it\u2019d be a cheaper solution than to keep making the stuff with everything against us.<\/p>\n

Votes have consequences<\/h3>\n

Then again, all the jingo-lite stuff wasn\u2019t in the spending review for me.<\/p>\n

It was aimed at peeling off Reform voters by reminding them that yes, shock horror, the overwhelming majority of spending done by the British government goes on British interests. Not on bunk beds for asylum seekers or goats for Burkina Faso.<\/p>\n

And sadly, these numpties are still calling the shots as the marginal power players in British politics.<\/p>\n

It\u2019s a sorry situation. You would think that after the absolute failure of Brexit to deliver anything material except the loss of \u00a340-50bn a year in tax receipts due to lower-than-otherwise<\/a> economic growth, that Nigel Farage\u2019s flush would be thoroughly busted by now.<\/p>\n

But his support has never been about facts, it\u2019s all about feelings. Anyone<\/a> still backing Farage\u2019s nationalistic agenda for economic reasons can\u2019t use a calculator, let alone a spreadsheet.<\/p>\n

Of course it\u2019s true that many Reform voters don\u2019t believe or care about the consequences of Brexit-y policies on economic growth.<\/p>\n

At best they are staunch constitutionalists and are happy to pay the price for that \u2013 which is fair enough.<\/p>\n

Or maybe they just prefer a Britain that was more like it was and less like, say, London has been getting. Not my view but also mostly fair enough, if it\u2019s expressed nicely and politely.<\/p>\n

Many Reform voters have unrelated worries that would be better tackled by any other party than Reform.<\/p>\n

And some are just xenophobes and racists.<\/p>\n

It\u2019s a broad church and you might think Reform would never be elected to run the country, so who cares?<\/p>\n

Well firstly, never say never. Look at the polls<\/a>.<\/p>\n

But more pertinently, the resultant accommodation of Faragian language and even thinking by the mainstream parties expands the Overton Window<\/a> of what\u2019s acceptable.<\/p>\n

This doesn\u2019t just make immigrants feel unwelcome or scared, say, which you might say you can live with.<\/p>\n

It will also lead to wrong-headed choices for the country, do yet more damage to the economy, and leave us with even less money to spend in future years.<\/p>\n

So if you\u2019re annoyed your taxes are still going up, these are the people to blame.<\/p>\n

More to read:<\/strong><\/p>\n