The Uk Government balancing it's financial books.

I think that borrowing to invest is sensible.

I don’t think we should be cutting taxes when our public services are so dire. I do think the things government has wasted so much on to impoverish this country should be examined - giving vast sums to foreign firms and Tory donors for one, privatising essential utilities is another.

Or do you think we should we go further, into owing money?

Well, fancythat, a good many of the people and institutions the UK appears to 'owe' money to, don't actually want it back.
When I suggested on a Premium Bonds thread that the government could 'pay back' the money they had invested in PBs they didn't want it at all. PBs are all counted as government 'borrowing.

All that government 'borrowing' is is people's and institutions savings and investments. They like to save and invest with the government because they know their money is safe with it. They will get the interest the government promises on their investment and if they want to redeem their bonds, or draw from their savings accounts, they know that the government will be able to repay them.

A significant amount of the government 'borrowing'' figure is the £900billion or so created by quantitative easing since 2008. This will never require 'repayment' because the Bank of England, owned by the government 'created' the money for it. The government can't owe itself money. It's a technical 'debt' only.

So I'm not bothered about it.

What I am bothered about is that the government has very little to show for all the money it has 'borrowed. It certainly hasn't spent much of it on public services.

It is something that concerns me very much. We have a thread at the moment about student loans; the current prediction is iirc correctly that only 61% will be repaid, yet still there is a belief that everyone should be able to attend university if they want to, regardless of whether they will ever repay the costs, and some believe that university education should be free. At the same time we have posts about NHS waiting lists and some posters believe that the government should give in to the doctors’ wage demands.

Many posters want to see a Labour government because they believe there will be much increased spending in the public sector - Labour of course has form for such spending and for borrowing in order to fund it.

I would like to see cutbacks in NHS management and waste. The more the NHS is given, the more it will waste. I have said before that my own experience of working in local government is of unaccountable people happy to spend the taxpayers’ money while doing the minimum to get by, letting backlogs pile up, clock watching and having their coats on ready to leave on the dot. Similar experiences in two public authorities over 13 years cannot be a coincidence. It is what I came to call ‘the public sector mentality’; I left for the private sector where hard work, not leaving work undone, earning one’s salary and being accountable were the norm. Any increased expenditure on public services , including the NHS, should be conditional on increased efficiency, the possible exception being education from nursery to 18 as so far as I can tell teachers and teaching resources are badly overstretched and the majority of teachers go above and beyond.

As regards benefits, I am fully in favour of claimants of working age being rigorously tested for ability to work.

I would not wish borrowing to be avoided by increasing taxation.

I am not expecting my views to find favour with the predominantly left wing GN posters, but the question was asked and I have given my answer. I expect, once again, to be accused of being extreme right wing. No, I expect a fair day’s work for a fair day’s pay and everyone who can work to do so - and I don’t expect those who earn a high salary to be expected to pay more tax to pay for those who don’t want to work or want to scrape by doing the bare minimum needed to avoid a P45.

Thank you for the detailed and thoughtful replies.
I do wish I knew more about the subject. I think on here, I am going to run into difficulties pretty quickly.

Personally I see the government balancing it's books in the same way as I would hope people do with their personal finances - not something to be avoided. And certainly not spend spend, and just hope it all works out in the end.

I think it is easy to say, well the government should just spend on a "problem". I could say that as well. And would love to. But the way I see it, mych of the money does have to be repaid. With interest.

Ilovecheese - invest in what?

CoolCoco - thank you for saying what you would spend less money on.

MaizieD - there used to be a lovely pie chart thing which showed who the government owed money to. Including to other countries. But I can no longer find it. I think goo gle must have removed it but I am only guessing. As far as I can remember, owing money to Uk people and institutions was a fraction of who we owe money to. But I could be wrong on that.

Germanshepherdsmum - it bothers me too.
I agree with some of which you write - much of your 1st 2nd and 3rd paragraphs.
Not sure I have been called extreme right wing before, but if trying to balance the Uk financial books is seen as that, then so be it.
I just look at it the same as anyone's household budget.

Don’t worry fancythat. I know that much government ‘borrowing’ takes the form of bonds, but not all. The government cannot print money ad infinitum with no expectation of a corresponding tax take, if there are not to be adverse consequences. And an increase in taxes will not be popular with those paying them.

The indications are that the current government will cut taxes further during the life of this parliament. Starmer has said he doesn’t intend to increase taxes, but of course he doesn’t yet know what the tax regime will be at the next GE, so at present that statement is meaningless.

Labour’s habit of throwing money at public services is of concern to me. If the public sector (excluding schools) is to receive more money it must be in return for increased efficiency - precisely the sticking point with the railway unions at present.

Oh, I wouldn’t call you extreme right wing fancythat - but I have had that accusation. Water off a duck’s back.

@Germanshepherdsmum I have also worked in both the public and private sector and I agree. In the public sector I had meetings about meetings, and never bothered bringing a pen as there were never action points or anything of interest said. I got a complete shock when I attended meetings in the private sector, there is accountability, agendas and productivity.

The danger associated with borrowing (even with quantitative easing using bonds sold to the Bank of England) is that at some point lenders (especially but not exclusively foreign lenders) begin to worry about whether the UK is able to maintain debt interest payments and eventual repayment of capital. At that point they will start charging higher interest to offset risk and later may refuse to lend at all. In previous decades some borrowing countries have been shit out of capital markets for those reasons. Also higher inflation often means higher interest payments: it's cheap to borrow when inflation is low but there is the risk that it will climb. Politicians say it's OK to borrow for 'infrastructure' spending because they believe that leads to private sector growth and increased productivity (so increased tax income helps pay off the borrowing) but the UK experience of that is not uniformly encouraging.

shut not sh*t

Thank you Coronation. My experience exactly. In the end I was just so frustrated with this manana mentality, and people just letting their work pile up because in their view they were only paid to work between 9 and 5.30, excluding their tea, lunch and coffee breaks which they never missed, that I left. One of my (senior) colleagues arrived on time, made his tea and had a chat with everyone, looked through the tv schedule in his red top paper and marked the programmes he would watch, before starting work. And he left on the dot. He was literally marking time until he collected his nice pension. He was by no means unique. That is not value for taxpayers’ money,

Invest in transport, so that people can get to where the jobs are, especially in rural areas.
Invest in healthcare so that we have a fit and able population.
Invest in education so that we have a well educated workforce, able to do the jobs that will come in future.
Invest in the health of our young children, for the same reason.
Invest in preventive medicine, again for the same reason.

Invest in housing.

Until a person has a home he cannot find a job, sustain a relationship, contribute to his community.

Increased efficiency is not always of benefit to the consumer though, with trains, driver only trains are not an improvement to the safety or satisfaction of the traveller, and that is the efficiency they want to introduce.

MaizieD - there used to be a lovely pie chart thing which showed who the government owed money to. Including to other countries. But I can no longer find it. I think goo gle must have removed it but I am only guessing. As far as I can remember, owing money to Uk people and institutions was a fraction of who we owe money to. But I could be wrong on that.

According to this website (which agrees with others) foreign investment in government bonds is about 30%. This could be investment for income, but could also be for speculation. There is a secondary market for bonds (i.e not bought direct from the Treasury, but bought from other bondholders (just like the market in company shares) which is probably driven more by speculation than by investing for income.

Government bonds are not the only source of government 'debt', though. Nationals Savings accounts and Premium Bonds are also part of the 'debt'. So foreign holding of government 'debt' over all is probably less than 30% of the total.

I also see investment in higher education as of value, jobs are going to change so much with the introduction of A I that we need people who are able to think, and a good university education should teach that.

Sorry, forgot to post the link.

www.economicshelp.org/blog/2215/readers-questions/uk-debt-held-by-oversees-investor

And don't forget, a significant part of the 'debt' is owed by the government to itself.

Tuition fees were only put the rate they were because of privatisation and lack of investment from the UK government though?

I don't have an issue with the old system of universities and polytechnics though as it seemed to give better access to education for 'most' people?

The danger associated with borrowing (even with quantitative easing using bonds sold to the Bank of England) is that at some point lenders (especially but not exclusively foreign lenders) begin to worry about whether the UK is able to maintain debt interest payments and eventual repayment of capital.

That is Gold Standard thinking, Grantanow, it's been out of date for the past 50 years. The government, as the sole issuer of its money, which is no longer backed by gold or silver holdings. It cannot 'run out of money'. That's why people like investing in government bonds, they know they will always get their interest and repayment of their principle if they sell their bonds back to the government.

Government bonds have always been the safest investment available.

MaizieD

Sorry, forgot to post the link.

www.economicshelp.org/blog/2215/readers-questions/uk-debt-held-by-oversees-investor

And don't forget, a significant part of the 'debt' is owed by the government to itself.

Thanks for this.I am wading through. And pressing further links on it.

Nearly every country has debt. Here are 2 tables showing that of the top 20 countries with the highest.

Top 20 Countries with the Highest National Debt:

GDP (UN 2021)
Japan255.24%
Greece167.97%
Singapore167.89%
Italy143.73%
Bhutan123.45%
United States123.28%
Laos121.75%
Bahrain121.17%
Barbados115%
Cape Verde113.09%
Maldives110.25%
France110.03%
Portugal108.35%
Spain107.28%
Suriname106.99%
Canada106.38%
Belgium105.98%
United Kingdom104.14%

Debt in millions

United States$29.46 Mn
Japan$13.05 Mn
China$10.12 Mn
France$3.33 Mn
Italy$3.17 Mn
United Kingdom$3.04 Mn
Germany$2.97 Mn
India$2.38 Mn
Canada$2.24 Mn
Spain$1.69 Mn
Brazil$1.50 Mn
Australia$954,634
South Korea$929,584
Mexico$746,964
Iran$674,167
Singapore$650,630
Belgium$649,405
Netherlands$530,350
Indonesia$488,638
Greece$431,474

These are from World Population Review.

It seems to me that the UK is doing reasonably well compared with some of the other countries so what's the fuss?

The UK debt has fluctuated over the centuries, due mainly to wars but also the sterling crisis in the 70s. By the beginning of the 20thC its was around 30% . By the end of WW2 it had reached over 200% of GDP. It fell to 29.2% by 2002 and then increased to 56.8% by July 2009. This increase was mainly down to public spending - on health, education and social security benefits.

Despite the Tories austerity programme it reached 104.14 the lowest of the top 20 countries with the highest GDP %.

Given those figures Labour should be given a chance to prove that they can do better with the economy than the Tories.

I trust those who criticise the public sector in terms of waste include HM Governent and HM himself in those criticisms.

The other side of GSM’s argument is that people buying private sector services or goods are paying towards profits that are not reinvested in the business but go into the pockets of shareholders. And that these services or goods are often priced out of reach of too many people who work long hours at low paid jobs.
I don’t call the argument right-wing, just I’m all right Jack.