These two charts used to be the opening data in budget reports. Now they are consigned to the very end, but they do give a feel for where money comes from and goes to in the UK economy, and so are worth sharing. I stress that they are predictions:
I have deliberately shown spending first, as that is the correct ordering. Money is spent and then reclaimed by taxation.
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“where money comes from and foes to in the UK”: ‘foes to’? Shouldn’t that be ‘flows to’?
Corrected
THanks
Yes – because money in this context is a concept of sovereignty – as in who is in charge. The bankers in 2008 knew this, as do those bankers who have messed up do now.
But you/we – we are not encouraged to know this nor to benefit from it. What we get is austerity.
I will be adding this to fiat money in the glossary this pm, I hope
Debt interest £10 billion less than twice the defence budget!
But most is just an accounting adjustment
How much of that £116bn “debt interest” is inflating principal on indexed linked bonds that won’t become payable for many years (and may never be paid at all, if inflation falls to low levels again)?
I suspect half is non-cash charges for index linked bird payments that might actually be settled 18 years hence
Very patient birds waiting 18 years!
Sorry, couldn’t resist it.
I know you meant bonds.
Richard. Any chance of constructing a set of 3 to 5 year forward looking quasi budget diagrams or maybe just time series graphs – for illustration – to indicate how a public sector- led economic revival might work?
Eg improving public sector pay, recruiting, retaining, training more staff (some immigration? ) investment in green energy, infrastructure, housing etc. Removing subsidies to fossil fuels, banks, etc .Taxing monoplies… Some QE directed at people not inflating rich assets, taxing the rich etc. Negotiaing a quasi – single market deal with EU to improve trade. Mayvve pushing growth up to 2.0-3% p.a.?
Could be used as a lever to talk to Labour, Libdems, Greens, unions, etc.
As Aditya Chakrabortty Guardian says – a rich country – but as Burn Murdoch(FT) says with mainly poor people and a few rich.
That is an enormous project……
I’ll discuss it with a Danny Blanchflower
Maybe it wouldnt have to be too disaggregated – the main point being to show that there are levels of spending, taxing, ‘borrowing’ , & QE that would be a feasible way of delivering better living standards, rebuilding the NHS and getting higher growth /productivity based on green investment etc.
Reeves and co are just intoning the ‘fiscal rules’/’fully funded’/’taxpayers money’ mantra and just goes schtum when asked ‘what would you do /how would you pay for it?’.
Make better fiscal rules then?
Employees and the self-employed can take great pride in being the main sources of government income – i.e real people, with the Corporate contribution being pathetically small really. Yet who got all the tax breaks in this budget? Employers almost certainly pay more in Employers NIC than they do in tax on their profits. Is there a breakdown of Income Tax and NIC between employees, self-employed and (or IT) investors inc. rental?
What would be nice is a charge of where it comes from and goes to in terms of private wealth, corporate wealth, to be inherited etc and what is privately taxed (offshore landlords effectively privately tax shelter and there is no IHT) so it grows on it’s own.
Would be nice to see these dynamics over time.
That would be intensely complicated