Rafa Pardinas

Andy Burnham, in two weeks of being PM, has perfectly illustrated the main problem in UK public finances. Week 1: there's a cost of living crisis, so to help you we've taken £45 a year off your electricity bill and capped bus fares at £2. Week 2: we don't have enough money to fund everything we want to do, so we're taking £630 a year out of your salary. Same government, same month. Credit where it's due first - taking VAT off electricity from October is real money, so is the £2 bus cap in January if you're on a bus twice a day. Immediate cost of living relief is genuinely needed by most people. But I'm not sure how someone who couldn't manage without that £45 a year of relief is supposed to now manage with £630 a year less in their pocket? The £630 is a 1.8% levy on income to fund a National Care Service costed at £18bn a year. On a £35,000 salary it's £630, on £50,000 it's £900. It's charged as a percentage of your income. It's collected out of your income. It is not, apparently, income tax, because they're going to call it a levy. It also only applies to taxpayers over 34... So you turn 35 and take a pay cut, at the exact age most people are stretched on a mortgage with childcare costing more than the mortgage. But the UKs ACTUALLY problem? Spending is too high. And it's too high in ways that are fixable if anyone was willing to challenge the status quo rather than buy more votes with handouts. This is where £1,383bn goes this year: Health, £269.6bn Pensions, £236.3bn Welfare, £204.0bn Education, £126.7bn Debt interest, £104.6bn Defence, £75.2bn Everything else, £367.1bn Health, £269.6bn: We need mandatory health insurance as an employment benefit and a hybrid model. Everyone hears "insurance" and pictures America, someone bleeding out over a copay, as if no other model exists on earth. The Netherlands has mandatory private health insurance. Insurers are legally required to accept everyone. They cannot charge you more for being chronically ill. A risk equalisation pool moves money towards the insurers covering the sickest people. It's consistently ranked top three in Europe. Welfare, £204.0bn: Income tax raises £330bn. So almost 2 of every 3 pounds of Income Tax taken from every working person in this country is spoken for by the welfare bill. Welfare should be for people who cannot work. Disability, genuine incapacity, the people it was built to protect. It has drifted into a general income top-up, and the number that proves it is 4.2 million working age people now claiming at least one health related benefit, up a million since 2019. Change how we determine eligibility, fix a lot of spending issues immediately. Pensions, £236.3bn: The state pension is a Ponzi scheme, and I mean that technically rather than as an insult. There is no fund - the ONS says so plainly. Your National Insurance is not being put aside and invested for your State Pension, It just pays the payouts for last year's pensioners. Yours depends entirely on there being enough workers behind you. Which, btw, there won't be. The ratio of pensioners to workers goes from 27% to 48% by 2050 (and these estimates are before we've seen the proper impact of AI/automation on jobs. Australia already fixed this: 12% of earnings into a private fund with your name on it, mandatory, employer paid. It's your money, it compounds, it doesn't need a bigger generation behind you to work. We could mandate the same tomorrow and let the state pension run down over the next 40 years, eventually saving £236bn a year. You can't levy your way out of these problems. A 1.8% charge on everyone over 34 raises £18bn. It doesn't even cover the interest on our existing debt. And in the meantime... If we're going to borrow anyway, why is none of it buying anything? Norway found oil in 1969 and put the money in a fund... That fund is now worth $2.049 trillion. It holds a stake in roughly 1.5% of every listed company on the planet. We found oil in the same decade and spent it. The UK's National Wealth Fund is capitalised at £27.8bn. Norway's is about 73 times bigger. So where is our position in AI, in data centres, in grid scale renewables, in batteries, in electric vehicles, in any of the things the next fifty years actually runs on? We borrow £133bn a year and almost none of it buys an asset. Fix government spending immediately, increase government income over time (without milking people for every penny of 'levy' you can find), and quality of life will genuinely improve as people have more money in their pockets. The UK has a spending problem, not a tax problem.