Wednesday 11 February 2015

Tax spend shock - servicing the National Debt - the General Election

HMRC sent me an email recently announcing "Your personalised tax summary is now available online, showing how much tax and National Insurance you have paid, and how it is spent by the Government".  Hmm - interesting, I thought.

The breakdown of how my tax is spent is VERY interesting:

25% on Welfare
19% on Health
13% on Education
12% on State Pensions
7%  on National Debt interest - whoa, £1 in every £14 of my taxes is used to service the nation's debt ... this is more than is spent on Defence (no, I'm not defending that), Justice, Transport, Business Industry, Government Admin, Culture. Environment, Housing and utilities, Overseas aid, and lastly (at 1/10 of those interest payments) the UK Contribution to the EU budget.

This shows to me very plainly why as a country we must reduce our Debt.  Yet if I understand correctly, all the austerity so far is only reducing the rate of increase in the Debt.  We have to do more than balance the books, we need a surplus to pay off the loans and we need this to be sustainable over decades.  

If this is achievable at all, then it needs intelligent, far-sighted strategic management which does not rely on the magic fairy of growth (which is no longer reliable), does not rely on market forces (because we want a fair society, not one at the mercy of the greedy and unscrupulous), and does not rely on passing the challenges and solutions up to a semi-federalised Europe (because that will lead to less visibility and less direct action just when we need more of those things).

I am mortified that my generation, now approaching retirement, has lived well at the expense of future generations.  So who am I going to vote for in May 2015?!  I honestly don't know.

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