Hopeless Rachel

As we approach Rachel's probably final budget - the situation with the UK economy is looking pretty hopeless.

Rachel is hopelessly clutching at straws to extract yet more tax from us in order to service the spiralling debt that she has recklessly added to since coming to power. 

When the comedy double act or "the Rachel and Kier show" came to power, they flooded us with negatively and unfortunately for the UK, the population has listened to,  believed and then embraced their negativity - causing the economy to stall.  People are nervous of what they will do - people are shifting their behaviour as a direct result.

In stark contrast with Blair, he arrived to Professor Brian Cox's anthem of "Things can only get better".

Maybe Kier should have used "Thing's can only get worse by The Chancers" as his theme tune.

Unlike Liz Truss, the Rachel and Kier double act really have crashed the economy. 

Today's statistics released by the Office for National Statistics show that the economy is way off the mark compared to their March 2025 forecast. In that staggeringly short 7 month period we've had to borrow an additional £117 BILLION and the deficit is now £15 BILLION more than the March projection - that's £2 BILLION a month deviation! The forecast was completely optimistic.  The ONS need to up their game and become hopelessly pessimistic in order to have any hope of an accurate forecast.

So much for the puny alleged blackhole that conservatives left us with.

Rachel is hopelessly addicted to splashing the cash and is maxing out the government credit card. Starmer meanwhile is egging her on and wont take responsibility.  I can already hear his response when the bubble bursts. "Rachel is the numbers person.  I'm a human rights lawyer so I don't understand numbers.  It's all Rachel's fault not mine.   I'm off to Davos to meet with my cronies."

Yep he will throw her under the bus for a laugh.

Hang on. Are you not First Lord of the Treasury? Buck stops with you as they say.

The interest rates, at which we have to borrow money we dont have, are creeping up as the bond market creditors get nervous about the UK's ability to pay it's debts.  Quite rightly so.  We are borrowing money to service the debt....

The cost of servicing the debt is now £105 BILLION per year. If this trajectory is maintained and inflation remains around 3.8% and Labour is still in power at the end of 5 years then the debt pile will have increased by a further £850 BILLION. Assuming a miracle happens and our bond interest rates are kept at 4.5% then that's a further £38 BILLION per year in interest payments (assuming Rachel doesnt borrow more to make the interest repayments).  That will be 15% of all tax take will be used just to service the debt (assuming the tax take doesnt fall like the Laffer curve predicts it will).

It's not not difficult to see why this is happening. GDP is around £2.7 TRILLION.  Tax revenues are 35% of GDP so £945 BILLION yet the government is spending 45% of GDP or £1.2 TRILLION so they are borrowing approximately £270 BILLION per year to fill the gap. Now the trajectory above means the number could be a bit lower at £200 BILLION. Unless a miracle happens between now and July 2028 where they manage to turn off the spending taps then the situation is going to get progressively worse and we will have £850 Billion is additional debt (my projections suggest it may just  top £1 TRILLION - let's hope I am wrong).

There are only 3 levers here to balance this equation.  Increase GDP (growth), reduce spending or increase taxes. Unfortunately there's no way on earth the Rachel and Kier double act can increase taxes to 45% of GDP (during the second world war tax take was 39%  leaving Britain broke with a collapsed empire). Even if it were possible to tax at 45% there will be cause and effect, GDP will fall (it's impossible to tax your way to growth) and unfortunately for them outgoings will be a constant. Rachel's strategy is clearly to focus on increased taxes and nothing else.  It may work very short term (1 year) but not until 2028.  The only option to solve this equation is massive spending cuts.

With the rich fleeing the country, tax revenue receipts look set to keep falling making the situation worse. The top 1% pay 29% of all tax and the top 10% pay 60% of all tax. We dont need many millionaires to flee the country before the tax Ponzi scheme falls apart.

The trouble is this unwillingness to keep paying the bottomless pit of taxes is spreading.  Just this morning I took my car for an MOT and the MOT tester was saying he's selling up everything and moving to Bulgaria (he has residency as he bought a house for £10k there before brexit).  He rents from the garage owner and he said the garage part owner is scaling back having already sold one of the sites with the current one to follow and is moving to Thailand in the next couple of years. The other garage part owner is Polish and moving back to Poland.   This is isnt just millionaires - "working people" (whatever that means) who are genuine contributors to the economy unlike government parasites, are fed up and opting out.

Public sector pay awards in 2025 are running at 4.4% compared to 3% in the private sector. These inflation busting pay awards are in excess of inflation and worse - Rachel is borrowing money we dont have to pay for them. The state is already bigger than the private sector in terms of employment therefore the few people who genuinely contribute to the economy have to deliver increasingly more and pay increasingly more tax to prop up the UK's bloated public sector.  Unfortunately parasites usually get too greedy and kill the host.....

The negative rhetoric is making the population lose HOPE.  So Rachel really is hopeless. When the situation is HOPELESS a classic human trait is to stop doing things and do nothing - a form of paralysis - DESPAIR. 

It's times like this that we need a strong leader to enthuse optimism and be a beacon of HOPE yet that's clearly not something we are going to get from the negativity clowns running show. 

The best thing the comedy duo can do is say we've f*cked things up and call a general election so a true leader can enter the ring.

So the future looks challenging.  We are set for a generation (or maybe two) of "austerity" to get public spending under control.  We dramatically need to slash public spending. Let's start with the £390 BILLION per year that the unaccountable Quangos are spending. Sack the 400,000+ civil servants we have acquired since the end of lockdown.

The socialists will have something to moan about for the next 20+ years but at least things will start to get back to a sensible footing.  Javier Milei has proven that hard medicine can quickly improve things.  We have had 20+ years of governments that have lived beyond the country's means.  Successive leaders have been unwilling to make the hard unpopular decisions so unfortunately now genuine austerity is the only way out of this mess. 

I am hopeful that somehow Javier Milei will become our next prime minister.  He can come over from Argentina with his chainsaw and turn Britain around. So what he can't speak English !  Unfortunately I suspect I have as much hope of this as the second coming of Christ.

So all I can do is pray that the next leader will be positive and create hope unlike the current hopeless incumbents.