If I may just intervene with an apolitical fact. There is a noted decline in affordability of services. Political figures left, right, and centre like to discuss the cause of the decline and the party responsible using the now familiar array of true and false tropes around migrant, people living longer, the global financial collapse, covid19, scroungers, more dependence on services, the rising costs of providing services, Brexit etc, etc.
All true and valid for discussion, but critically in order to manage the decline, there needs to be a recognition - we no longer can afford what we've had. The North Sea revenue has been mostly extracted and spent. Without another such bonus around the corner, the only source of income is tax, otherwise there is borrowing without fixed interest rates. In other words the economy is volatile and vulnerable at the same time.
The apolitical fact. State pensions and benefits are both needed and unaffordable under the current model. In rounded numbers, the number of people whose NI payments were required to fund one state pension was 13 to 14. Today is less than 3. Some say the official figure for next year is 2.1 - unverified, but let us suppose for our purposes that it is close to accuracy.
I do know that people here hate Copilot, but I asked it to draw these graphs for me from the data.
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Leaving about Copilot to the side please, the graph shows the trend and the problem. We must surely agree that the trend can not continue.
As workers age, they may hope for promotion and increased pay. Largely I think we'll manage to agree this happens. We can note that certain professions encourage early retirement ages, teachers, police, etc etc. When one examines the direct tax gap this creates, it is something like £2.1 bn lost. When the direct and indirect tax gaps are summed this produces a shortfall of around £6.3bn.
This while the numbers of state pensioners increases, and the number of benefit claimants increases, and the lost days to sickness increases.
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This is clearly an unsustainable model. Further ...
The number of jobs vacancies in the UK is in the order of 950 000.
There number of people temporarily unable to work due to NHS waiting lists is in the order of 800 000.
The number of migrants / asylum seekers prevented from working by government policy is hundreds of thousands.
Opinions are sure to vary, but governments of any stripe will tend to tinker around the edges rather than set out bold policies.
Ultimately, the choices are increase tax income to fund services or cut services and ignore any potential losses to GDP.
The choices are who the government decides must pay.
Nobody wishes to pay. Some can not pay. Some can pay and not be left short.
The moral impediment - maintain the government covenant or let those with money keep it.
Solutions on a postcard to Rachel in accounts please.
