The share of the UK economy being gobbled up by taxation is now at eye-watering levels not seen since the 1970s. The government eats up over 35 per cent of everything the country produces yet has precious little to show for it. It’s become a meme in Britain that nothing works. You can’t even get healthcare without battling it out with dozens of other callers at 8 a.m. in the morning.
This state of affairs isn’t just unpleasant though, it’s downright dangerous for society. People need to feel like they are getting something out of the social contract. Paying punitive taxes should mean getting impeccable public services in return, but that’s not what is happening. People are living in the cold and dark, relying on food banks to meet their basic needs.
What about having children? Forget it. That remains a dream for scores of younger people working in low-paid, insecure jobs.
The problem with the country’s current trajectory is that decline appears baked in. The more government taxes to support the currency, the more innovation in the real economy will decline. The best and brightest will go elsewhere, seeking work in companies with lower taxes in foreign countries, like the U.S. And Britain will be left reeling from the brain drain in much the same way as India and Southern Europe.
But it gets worse. British people aren’t having children and at the same time, the boomers are retiring. This demographic dynamic means that the working-age ratio will continue to deteriorate. There will be ever fewer productive workers for every person aged 65 and over.
Democracy is unlikely to improve the situation for younger people. Older voters are more numerous and more likely to vote, meaning policies like the ‘triple lock’ will remain.
It’s not clear if there is any way out of this downfall and deterioration. Countries like Japan are trying to solve the problem by creating highly productive export-orientated businesses that generate massive cash surpluses from abroad that they can divert into domestic elderly care programs. But the UK has no such corporate legacy. And despite the fertility situation being superior to Japan’s, the country will go through the same shift in the next ten to twenty years.
All this means that many workers are going to be doing a lot of head-scratching when they next fill out their self-assessment tax return. Individuals will ask themselves what they are getting other than pot-holed roads, plastic-contaminated water, poor education, and a near-complete absence of healthcare. If the country remains broken, the social fabric will begin to fray and the idea of Britishness as a cohesive concept will disappear. It’ll be everyone for themselves.
There is hope on the horizon, but it pretty much all depends on technology. Artificial intelligence could generate an economic and health miracle that solves our problems, but that feels like magical thinking. Alternatively, Westminster could get its act together and implement policies to reverse these civilisation-destroying trends. But, again, that appears exceptionally unlikely. Where the country goes from here is a mystery.
