Where has all the money gone?
There’s a common consensus that the UK government is bankrupt and the economy is flat-lining if not receding
A close friend of mine with right-leaning opinions and views stated that “we are in real trouble”. He is lovely and highly intelligent and I respect him greatly. I have left-leaning opinions and views and I agree with his statement.
Unemployment is at historically low levels and we’re all paying more tax than since 1948. All while schools, the NHS, prison services, the criminal justice system and councils are going bankrupt. So where has all the money gone?
Let’s ignore the disastrous one-offs such as paying Rwanda £240m to take UK immigrants. And billions in covid money going to pub landlords, friends of MPs and Michelle Mone. And 4% reduction in UK GDP due to Brexit and the billions we paid to actually exit the EU.
Instead, and firstly, let’s look at schools. The academisation of schools is killing school budgets. The private Trusts that run schools now take a % profit out of the system that previously would have been spent on resources. Furthermore, new school buildings are built without tender processes. Contracts are often awarded to connections of the Trusts, who establish long-term leases on the buildings that the schools cannot afford to pay.
Source: The Elland Academy, Leeds run by the Delta Academy Trust
Councils used to do so much. Libraries, swimming pools, parks, infrastructure projects, “[Insert Town Name Here] in Bloom” and most-notably, house vulnerable and poor people in council houses. Those council houses were sold off under the right-to-buy scheme in the 90’s leaving councils with very few houses for social housing. Now, the same number of vulnerable people, if not more, needing housing get put up in expensive private rents.
The NHS is on its knees. Appointments are often out-sourced to expensive private providers and the NHS’s costs go up.
The prison service is scraping by and it is not effective. Crumbling infrastructure, not enough beds, a lack of proper rehabilitation, a lack of post-sentence societal integration and support. And all because of expensive out-sourced private providers.
Those reasons explain some of the problem. But what happened to all the money from quantitative easing or the money from covid relief packages?
Money flows to the rich. The asset-owning class invest their money in more assets (stocks, property, etc.) that then cause those assets to rise in value making it harder for the wage-earning class to buy those same assets. Hence, for example, why young people are finding it almost impossible to get on the property ladder.
Quantitative easing, both after the 2008 financial crash and during the covid pandemic, pumped hundreds of billions of pounds into the system. That money predominantly gravitated to the already wealthy as they bought more assets such as stocks and property. There was very little benefit for ordinary folk. In fact, it was detrimental due to the rising costs of assets.
The wealth of the rich is exploding at the same time as wealth of the middle class and wealth of the government is collapsing. Do you not think these things are connected? — Gary Stevenson
The Secret Economics Destroying Britain (50 minute watch on YouTube)
We need massive redistribution of wealth. Migrants aren’t the enemy, the EU isn’t the enemy; it’s the rich. And not the £80k or £150k earners. It’s the mega-wealthy. Those who perpetuate the divergent wealth inequality in society that is bankrupting the nation.
If we do not fix inequality, our children’s lives will be awful and a permanent struggle. But it’s hard to fix.
In Walter Scheidel’s ‘The Great Leveler’, he states that there are only 4 ways to reduce inequality: mass mobilisation warfare, horrific plague, violent revolution or total state collapse. Notably, the last time there was an improvement in wealth inequality was straight after World War II.
It’s a bleak view and not one I’d like to see happen. I’d rather we pushed the wealth inequality agenda into the mainstream narrative and forced our government to address it.
