Reeves spends every penny of income tax on welfare – we’re in trouble | Personal Finance | Finance
Donald Trump’s war looks set to blow up in his face. He faces an impossible choice. Retreat and claim a victory it didn’t actually win, or put the US boots on the ground and risk slaughter. Unless the brutal regime in Tehran suddenly collapses, the West will face a nightmare. The Ayatollahs, or those in power today, have discovered a weapon as powerful as any nuclear bomb. By closing the Strait of Hormuz, they can bring the global economy to its knees. And that’s exactly what they do. Britain is about to pay the price for the rise in oil and gas. So what is Keir Starmer doing?
Strangely, there is a spring in the Prime Minister’s step. He thinks the war is going pretty well for him. The decision to stay out is very popular. Not that it would be of much use to us. The once great naval power can barely muster a frigate to defend its bases. Starmer keeps saying this is not our war, a phrase echoed by Rachel Reeves. But war is approaching us. If the Tehran regime survives, it will be a direct blow to our national security and embolden China and Russia. And if Trump follows through on his threats to leave NATO, things will get even scarier.
In this scenario, Europe would have to defend Ukraine without US help. Poland, Germany, the Baltic countries and Scandinavia woke up. They are quickly rearming. So what do we do?
Reeves is blocking plans to increase defense spending to a pathetic 2.5% of GDP, even though it is clear we need to spend much more than that. Incredibly, 11 NATO countries spend more than us. So where does the money go? Last year the Treasury collected £331bn of income tax from us. Reeves spent £333bn on welfare. This is more than he raised.
This is just a tax, of course. There are many more such as National Insurance, VAT and corporation tax. However, it is simply not sustainable to spend more on those who are not working than we earn from the income of working people. In fact, this is unthinkable.
And the situation is getting worse. Every week another 1,000 people are declared too ill to work and the number of long-term illnesses has now reached a record high of 2.8 million. A staggering nine million working-age adults are economically inactive. Health, disability and disability benefits are the fastest growing areas of spending. Five years ago its total value was £24bn. By the end of the decade the bill is expected to reach £100bn. Labor MPs rebelled when Reeves tried to save just £5 billion in his first budget. Make another screaming Starmer U-turn.
Pensioner benefits continue to account for the largest share at around £180bn, but this money goes to payers.
We are storing an even bigger problem for the future. The number of children reported to be disabled has doubled in a decade to 1.7 million, leaving them in need of help for life. But while Reeves refuses to spend more on defense, he is fixating on welfare increases that reduce inflation.
Universal Credit will rise by a stunning 6.2% this year and will continue to outpace it for the next three years. The upper limit of two-child benefits has been abolished. All this while the world was approaching World War III and our military was becoming a laughing stock.
Reeves’ tax increases also stalled growth and raised the unemployment rate from 4.2% to 5.2%, squeezing tax revenues and further inflating the relief bill.
If Starmer thinks a “rules-based international order” will save us, he is even more disinterested than he seems. Iran, China, Russia, North Korea and, let’s face it, the USA are no longer playing by the rules. Today Might is right. And Britain is a skinny seven-stone weakling.
We are in a global arms race and spending money on sickness bills. This priority is untenable. And England cannot do this unless we strengthen our army.
