Author | Cat brother
Source | Big Cat Finance Pro (ID:caimao_shuangquan)
“英国已破产且支离破碎”（broke and broken）。
In the past two days, the new government of United Kingdom has conducted a review of United Kingdom's finances, and as a result, the mess it inherited has a deficit of 20 billion pounds (about 186.7 billion yuan).
The Conservative Party has been in power for 14 years, and if the Labour Party does not do well in the future, it is also because the Conservative Party has laid a poor foundation, the Labour Party wants to reform, and the Labour Party wants to be a "savior".
Is it really "the state is bankrupt"? Not really.
The country went bankrupt and required United Kingdom to become insolvent. According to May data, public debt as a percentage of GDP was 99.8%, but the debt of 2.74 trillion pounds (about 25.6 trillion yuan) is indeed the highest since 1961.
If the government went bankrupt, there was a bigger fiscal gap, and United Kingdom also had it, and at that time, no one said anything about bankruptcy.
So, the Conservatives also shouted to the Labour Party, don't talk about useless.
Tax hikes, not for the time being, after all, Labour's campaign promises are still hot:
So what to do? The new government has announced a £13.5bn spending cut:
1. Suspend some infrastructure projects, such as high-speed railways and highways, and stop repairing them first;
2. The original planned reconstruction of the hospital was also stopped first;
3. For some people with relatively high pensions, the heating subsidy has also been stopped first;
What do the United Kingdom think? it, Labour and the Conservatives, it's all the way.
1. United Kingdom is so financially tight, and there is still 11.6 billion pounds of international climate aid abroad, does this money have to be thrown out?
2. International student loans, there are still 46 billion pounds to be repaid, can't these loans be stopped?
3, the United Kingdom itself still has to engage in food relief, Ukraine can get 3 billion pounds of aid from the United Kingdom every year, "Ukrainian life is expensive"?
If these expenditures are not cut, they will stop the domestic infrastructure construction, and it is no wonder that they will "go bankrupt".
The United Kingdom said.
Why?
1. The welfare budget is getting higher and higher, the population is aging, the pension expenditure is getting higher and higher, and the high welfare and financial crisis can only choose one of the two;
2. Can Labour redistribute wealth? I guess it's enough to choke.
3. The financial and fiscal crisis is there, and the elites are still quarreling over some trivial matters;
High costs and high welfare are about to hollow out United Kingdom, and everyone is pretending not to see it.
In fact, in 2023, many cities in the United Kingdom will already go bankrupt, such as Birmingham, the second largest city under the Labour Party.
In the 1890s, United States rated Birmingham, yes.
Museums, libraries, galleries, swimming pools, bathrooms, all free, very clean streets, with their own water supply system, and brightly lit streets, these are all benefits that United States envy.
However, in September 2023, it went bankrupt because of a £1 billion deficit.
Galleries, what can be sold, are sold; The library, if you can, close; The free pool is long gone; Garbage is only collected once every two weeks; The water system was privatized, and the street lights were dimmed to cut costs.
There is nothing left of the benefits that were praised by United States.
Now, the rest of the money is basically spent on the social security sector, such as pension and medical care, which cannot be broken, and even the budgets of education, transportation, youth services and other departments have been cut almost.
Birmingham can't hold on, and other cities are even harder, with 26 of the 47 local councils at risk of bankruptcy over the next two years.
The country is not bankrupt, but the city is bankrupt, which has become a trend in United Kingdom.
Why go bankrupt? No money.
In the United Kingdom, local governments can collect taxes, but only 5% can be collected, which is almost the lowest in Europe.
What if you don't have money? Ask the central government for money.
In 2010, Portugal, Greece and other "European pig five" had a sovereign debt crisis, at that time, Greece went bankrupt, which was quite miserable.
United Kingdom, which was still in the European Union at that time, looked at its finances and was also a mess, preventing itself from becoming a "European pig", so it began a 10-year austerity plan.
It doesn't matter if it's austerity, and the local government will have less money to get.
In the past 10 years, the money from the central government has decreased by 40%, and he often paints cakes, saying to the localities, you can find your own way, and if you can't throttle, you can open source, you can make some investment and make money yourself.
Many local councils have really gone to invest, some are engaged in commercial real estate, and some are engaged in loans.
For example, there is a small town in Woking, where it spent 2 billion pounds to invest in hotels and buildings, and when the commercial real estate collapsed, half of the money evaporated, and the city council went bankrupt.
The debt has accumulated to 2.4 billion pounds, but the annual budget of this small town is only 24 million pounds, 100 times, how can it be repaid?
Of course, there are also their own works, such as Birmingham, where the 100 million pound IT project was mishandled, and the discovery of the unequal pay for men and women for equal work, and the compensation of 780 million pounds, the two projects, are about to catch up with the city's deficit.
As a result, while raising municipal taxes, we continued to cut spending.
And when it came to the United Kingdom government, after 10 years of austerity, it was found that the original austerity was useless.
Tax increases where the tax power itself is small, and it is basically only a matter of time before the central government of the United Kingdom raises taxes.
The cost of living is getting higher and higher, and if you have to mix it up with regional conflicts, if you raise taxes again, you have to ask the government for high benefits, and you will fall into a vicious circle.
Bankruptcy or not, for ordinary people, there is no difference.