The Student Room Group

Is it possible that things would improve in the UK?

Either in terms of livelihood, domestic politics or global standing. I have the impression that our country has been stuck in a state of stagnation. What do you think?
Original post
by ABBAForever2015
Either in terms of livelihood, domestic politics or global standing. I have the impression that our country has been stuck in a state of stagnation. What do you think?
Yes, obviously.

Lots of countries have managed to turn things around following patches of decline/stagnation. But it requires the general public to understand that with an aging population, you can't simultaneously have lower taxes and have improved public service provision.

Reply 2

Original post
by BenRyan99
Yes, obviously.
Lots of countries have managed to turn things around following patches of decline/stagnation. But it requires the general public to understand that with an aging population, you can simultaneously have lower taxes and have improved public service provision.

Good morning. And good to wake up to a note of optimism - something of a rarity these days! As I have said before, it's always a pleasure to read one of your posts.

I'm curious about that comment on lower taxes and improved public service provision. Could you expand on that a little?
Original post
by Supermature
Good morning. And good to wake up to a note of optimism - something of a rarity these days! As I have said before, it's always a pleasure to read one of your posts.
I'm curious about that comment on lower taxes and improved public service provision. Could you expand on that a little?
I can only expand on it to the extent of saying it was a typo - the cost of typing on my phone on a busy tube carriage this morning. I have since corrected it to "can't" from "can".

Reply 4

Original post
by BenRyan99
I can only expand on it to the extent of saying it was a typo - the cost of typing on my phone on a busy tube carriage this morning. I have since corrected it to "can't" from "can".

I thought that was the case, which is the main reason why I intervened.

And I could not agree more. It brings to mind that Mervyn King comment:

'The challenge is if we want European levels of welfare payments and public spending, you cannot finance that with American levels of tax rates, so we may need to confront the need to have significantly higher taxes on the average person.

There isn't enough money there among the rich to get it back.'

https://www.bbc.co.uk/news/business-63364240
Original post
by Supermature
I thought that was the case, which is the main reason why I intervened.
And I could not agree more. It brings to mind that Mervyn King comment:
'The challenge is if we want European levels of welfare payments and public spending, you cannot finance that with American levels of tax rates, so we may need to confront the need to have significantly higher taxes on the average person.
There isn't enough money there among the rich to get it back.'
https://www.bbc.co.uk/news/business-63364240
Good ol'Lord Merv.

He used to be fairly insightful, unfortunately he now just spends most of his time banging on about the M2 money supply and QE in HoL Economic Affairs Committee hearings - which poor economists such as myself have to listen to if they're talking with an important guest.

Reply 6

😆 Point taken!

But he's right in that quote, don't you think?

If you feel inclined, I should be interested to hear - in a nutshell - your formula for turning things round (including how to approach that 'you can't simultaneously have lower taxes and have improved public service provision conundrum.)

We could do with a bit of hope amidst all the gloom.

But hope tempered with realism.
Original post
by ABBAForever2015
Either in terms of livelihood, domestic politics or global standing. I have the impression that our country has been stuck in a state of stagnation. What do you think?


The brexit has ruined Britain and the economy in particualr. Was a bad idea to change the customs union for a common wealth. When Britain is able to remove the brexit, I see hope for improvements.
Original post
by Supermature
😆 Point taken!
But he's right in that quote, don't you think?
If you feel inclined, I should be interested to hear - in a nutshell - your formula for turning things round (including how to approach that 'you can't simultaneously have lower taxes and have improved public service provision conundrum.)
We could do with a bit of hope amidst all the gloom.
But hope tempered with realism.
I don't think there is any nutshell-sized formula that gets us to a more prosperous Britain. Moreover, given the quest for higher productivity cuts across dozens of different areas of economic and social policy, I don't think I have the time nor the energy to actually flesh out a proper considered response.

Nevertheless, one thing I've been thinking about over the past week is that a lot of the change is going to need to come from de-regulation. I'm not one of those neoliberal red tape cutting maniacs, but equally, the scope to driving higher potential output via labour and capital seems pretty limited to me. Raising the state pension age, cutting NHS waiting lines, improving cheap childcare provision, etc, are all sensible but are unlikely to really move the needle for the labour component of potential output. Similarly, consolidating council pension funds, higher public investment, etc, probably isn't going to do a whole lot for the capital stock. Therefore, I think a lot will have to come from reducing the regulatory burdens around home building, energy and infrastructure.

Am I confident that this will happen? Not particularly. Labour seem to be saying some sensible things on housing, albeit with little action. My glass half-full view is that the limited scope to drive growth through other factors of production means Labour might come to see de-regulation as a necessity, thus going ahead with it. But organisations and individuals like to complain when you de-regulate, so I'm concerned it will be a very slow process and that Labour don't really have the desire to drive proper change.
Original post
by Kallisto
The brexit has ruined Britain and the exonomy in particualr. Was a bad idea to change the customs union for a common wealth. When Britain is able to remove the brexit, I see hope for improvements.

PRSOM

Brexit was the worst thing that could have happened. We are, once again, the sick man of Europe.
Original post
by PinkMobilePhone
PRSOM

Brexit was the worst thing that could have happened. We are, once again, the sick man of Europe.


Is it possible to get back into European Union? it has lasted so many years to leave after all.
Original post
by Kallisto
Is it possible to get back into European Union? it has lasted so many years to leave after all.

Maybe someday but I can't see it happening anytime soon, sadly.

Reply 12

Original post
by BenRyan99
I don't think there is any nutshell-sized formula that gets us to a more prosperous Britain. Moreover, given the quest for higher productivity cuts across dozens of different areas of economic and social policy, I don't think I have the time nor the energy to actually flesh out a proper considered response.
Nevertheless, one thing I've been thinking about over the past week is that a lot of the change is going to need to come from de-regulation. I'm not one of those neoliberal red tape cutting maniacs, but equally, the scope to driving higher potential output via labour and capital seems pretty limited to me. Raising the state pension age, cutting NHS waiting lines, improving cheap childcare provision, etc, are all sensible but are unlikely to really move the needle for the labour component of potential output. Similarly, consolidating council pension funds, higher public investment, etc, probably isn't going to do a whole lot for the capital stock. Therefore, I think a lot will have to come from reducing the regulatory burdens around home building, energy and infrastructure.
Am I confident that this will happen? Not particularly. Labour seem to be saying some sensible things on housing, albeit with little action. My glass half-full view is that the limited scope to drive growth through other factors of production means Labour might come to see de-regulation as a necessity, thus going ahead with it. But organisations and individuals like to complain when you de-regulate, so I'm concerned it will be a very slow process and that Labour don't really have the desire to drive proper change.

I'm with you all the way on targeted de-regulation but I think the crux of the matter lies in the dilemma that you posed in your earlier post:

'You can't simultaneously have lower taxes and have improved public service provision.'

which echoes those words of Lord King:

'The challenge is if we want European levels of welfare payments and public spending, you cannot finance that with American levels of tax rates, so we may need to confront the need to have significantly higher taxes on the average person.'

As a nation, we need to decide which path we want to go down and what sort of economic model we want to adopt: a European 'social market' model, a US style laissez-faire capitalist model or something in between.

Once that's decided, we need the political will, the discipline and the willingness to make sacrifices that would be necessary to stick to the chosen path.

Were we able to do that, we could halt the decline and turn things round. But it would take 20 years.

I'm not sure that the political will yet exists. I agree wholeheartedly with your last paragraph and particularly its final phrase: Labour don't really have the desire to drive proper change. That's not a criticism of the Government. They (or any future government we may end up with) has a monumental task ahead of them.

Reply 13

Original post
by Kallisto
The brexit has ruined Britain and the exonomy in particualr. Was a bad idea to change the customs union for a common wealth. When Britain is able to remove the brexit, I see hope for improvements.

Most economists would agree with you that Britain leaving the EU when it did was something of an 'own goal', at least as far as its short to medium term prospects were concerned.

But things have changed. The EU of today is a very different place to the EU that Britain left. It is engulfed by political turmoil and internal dissent. The taxpayers of Germany, France and The Netherlands (with minor contributions from other wealthy countries with small populations) are having to prop up an ever expanding group of poorer nations, arriving with a begging bowl. And they are getting increasingly restless. If Ukraine were ever to join, it would make matters worse still. Absorbing Turkey would cause the whole project to implode.

The EU was at its best in 1995 when there were just 15 Western European countries with broadly comparable political, economic and cultural outlooks and when it was often accused of being 'a rich man's club'. It has expanded too far, too fast.

Sir Keir Starmer is right to express the hope that the UK will not need to choose between the US and the EU. But navigating that upcoming divide is going to be extremely tricky now that Mr Trump is back in power.

Reply 14

Original post
by Supermature
I'm with you all the way on targeted de-regulation but I think the crux of the matter lies in the dilemma that you posed in your earlier post:
'You can't simultaneously have lower taxes and have improved public service provision.'
which echoes those words of Lord King:
'The challenge is if we want European levels of welfare payments and public spending, you cannot finance that with American levels of tax rates, so we may need to confront the need to have significantly higher taxes on the average person.'
As a nation, we need to decide which path we want to go down and what sort of economic model we want to adopt: a European 'social market' model, a US style laissez-faire capitalist model or something in between.
Once that's decided, we need the political will, the discipline and the willingness to make sacrifices that would be necessary to stick to the chosen path.
Were we able to do that, we could halt the decline and turn things round. But it would take 20 years.
I'm not sure that the political will yet exists. I agree wholeheartedly with your last paragraph and particularly its final phrase: Labour don't really have the desire to drive proper change. That's not a criticism of the Government. They (or any future government we may end up with) has a monumental task ahead of them.
I somewhat disagree. The point I was making in the original post was that the government needs to drive long-term change of a structural nature, and this can sometimes (depending on the specific policies) require changes to the tax-spend mix.

But I don't think shifting to a US style system with low tax & spend, or shifting to a European system with higher tax & spend, is necessarily pro-growth for the UK. What matters is which taxes and areas of spending you change and by how much - and is this politically feasible. This is why the lack of room to manoeuvre for Reeves on conventional demand-side policy, makes other forms of policymaking (i.e. supply-side/de-regulation) that much more important in this parliament. So I disagree with the idea that we need to pick whether to adopt the US/European model.

Moreover they're very different economies to ours so there's little reason to suggest their models would be any more appropriate for our specific economy.

Reply 15

Not in our lifetime. The issues run too deep, and are too complex and intermingled with each other.

Brexit was by far the worst decision a country has ever made in history. Choosing to actually put up trade barriers is killing small business in this country; but now, no government will ever reverse it because heaven forbid someone tell the xenophobic halfwits that voted for this they were wrong.

But then deeper than that, those xenophobic halfwits voted that way because they have been utterly let down for over 40 years by a government which instead of giving them incentive to work has simply supported their poor life decisions.

Reply 16

Original post
by BenRyan99
I somewhat disagree. The point I was making in the original post was that the government needs to drive long-term change of a structural nature, and this can sometimes (depending on the specific policies) require changes to the tax-spend mix.
But I don't think shifting to a US style system with low tax & spend, or shifting to a European system with higher tax & spend, is necessarily pro-growth for the UK. What matters is which taxes and areas of spending you change and by how much - and is this politically feasible. This is why the lack of room to manoeuvre for Reeves on conventional demand-side policy, makes other forms of policymaking (i.e. supply-side/de-regulation) that much more important in this parliament. So I disagree with the idea that we need to pick whether to adopt the US/European model.
Moreover they're very different economies to ours so there's little reason to suggest their models would be any more appropriate for our specific economy.

That sounds a little like my 'something in between'.

I did not mean to suggest that we should adopt any existing model, rather that we should decide which end of the spectrum we lean towards: lower taxes or improved public service provision.

I completely agree that, 'What matters is which taxes and areas of spending you change and by how much.'

I'm not sure how politically feasible it is to reach a reasonable degree of consensus on that - but it will certainly take some doing in the current political climate. One only needs to look across the water to France to see what happens when a nation's sense of direction becomes totally fractured.

Your final paragraph is absolutely true. We need to devise a model that works for us.

Reply 17

Original post
by Supermature
That sounds a little like my 'something in between'.
I did not mean to suggest that we should adopt any existing model, rather that we should decide which end of the spectrum we lean towards: lower taxes or improved public service provision.
I completely agree that, 'What matters is which taxes and areas of spending you change and by how much.'
I'm not sure how politically feasible it is to reach a reasonable degree of consensus on that - but it will certainly take some doing in the current political climate. One only needs to look across the water to France to see what happens when a nation's sense of direction becomes totally fractured.
Your final paragraph is absolutely true. We need to devise a model that works for us.
Tbh, I don't think you need to find a very reasonable degree of political consensus. It's less than six months into a new administration and they've got a working majority of 165 (factoring in the speakers), so you'd need over 80 labour MPs to rebel for you to fail to drive something through. If you can't enact long-term supply-side changes through under these conditions then we might as well just pack up and head home.

You don't need a broad consensus with a large majority, you just need a dose of bravery and ambition. So far I've seen some modest signs they're up for the battle, but it's difficult to be convinced of anything yet. Starmer's government is still trying to figure out how to be a technocrats in an age of rising populism - it hasn't actually worked out how to sell its policies without the fear of losing voters. Looking for reasonable political consensus is just looking for open goals in a world where there are very very few.

So to sum: the foundations are in place to drive long-term positive change, some of their ideas are good, now they really need to work on policy execution and comms.
(edited 1 year ago)

Reply 18

Original post
by PinkMobilePhone
PRSOM
Brexit was the worst thing that could have happened. We are, once again, the sick man of Europe.

Worse than leaving the WTO?

Reply 19

Original post
by ABBAForever2015
Either in terms of livelihood, domestic politics or global standing. I have the impression that our country has been stuck in a state of stagnation. What do you think?

In terms of global standing our perception is not actually that bad amongst the leaders that matter. It's only bad among the mandarin class and liberal intelligentsia who believe that the height of a civilized country is spluttering money on foreign aid or aligning with EU regulations.

In terms of politics thats largely subjective. It's possible that Starmer may not see 5 years or that Reform could be making a lot of noise.

In terms of livelihood the answer is no. Nothing that Labour has said will meaningfully change the economy thus far.

Quick Reply

How The Student Room is moderated

To keep The Student Room safe for everyone, we moderate posts that are added to the site.