The US national debt ‘real-time’ debt clock can be found on 42nd Street, New York. Ticking away it currently equates to $955,708 per American family. In absolute terms, the UK is the sixth most indebted nation in the world. Against this, we are saving more for a rainy day as disruption is the new norm…
A 1980’s Jim Hacker inspired economy drive
As millennium turned, UK debt was 30% of GDP, today it stands at 100% of the value of everything we make and do! Public sector spending at its highest levels since Harold Wilson’s days and the cost per household is equivalent to paying an extra £6,000 in interest on the mortgage each year, ouch.
As Permanent Secretary to the Department of Administrative Affairs Sir Humphrey Appleby once said ‘The public doesn’t need to know anything about wasting government money, we are the experts’ – rightsizing government is nothing new, doesn’t every party say they will, but can we make strides and save £47bn a year? Mel says so, ultimately the savings are rarely instant and can they even be delivered within a single parliament because that’s all you might get?
It is no longer good enough to lay claim to fiscal responsibility, ‘Mondeo man’ has tired of the economic blame game. Interestingly, of the last 8 Chancellors, all Conservative bar Rachel from accounts, 5 (including Ms Reeves) read Economics (ranked No1 in the UK) at Oxford. Shadow Chancellor, Mr Stride, is also an Oxford alumni (as is Sir Humphrey Appleby) – Beggs the question, perhaps time for a different textbook? As his boss said, ‘A strong economy starts with one rule: don’t spend money you don’t have’.
Kemi – the ‘Grocers’ daughter Mk2
HMRC has sent out 4 million letters informing people they are due a £473 refund and turned to ‘X’ to encourage claims. Now they say that cash is no longer king – just 9% of all UK payments are cash, but perhaps now is the time to embrace cash. If all you have is the money in your pocket, when it’s gone its gone. One way to save a fortune – Treasury Ministers take note.
I read that the average person is exposed to 39 different taxes across all that they do. With 1,180 complicated and some obscure reliefs, you will need a Dafferns Accountant to navigate through the 23,522 pages that make up the rule book. Kemi has promised to axe one, stamp duty, as the ‘key to an aspirational society’ this is reminiscent of Thatcher’s right-to-buy policy, a policy that a previous Labour housing cabinet minister may have availed themselves of.
Previous Conservative Chancellors, Osborne, Hammond, Sunak and Hunt have all had to find extra from down the back of the sofa mid-term – an extra penny on basic rate of tax generates around £8.5bn – but today, any changes need to be supported by a fairness narrative that the media will buy, not create a new set of losers who take their votes elsewhere.
What could be needed is a Thatcher like prudent housewife (Kemi’s 50% of government savings should go towards repaying the national debt rule). Rachel’s November Budget could well end up embracing the spirit of the Labour manifesto not necessarily the words. People need to feel that any tax rises are the right thing for UK Plc and not hear the ‘we inherited this’ argument again.
The Pulse of ‘Spoons’ – Sticky Korean Fried Chicken
The government lays claim to the fastest growing G7 economy but realistically it is difficult to work out if the pint glass is half full or half empty, the nation’s credit card is maxed out. Our wealth, at £37,143 per head, is not G7 top quartile and only fractionally better than 2019 so in reality we are only a packet of KP salted peanuts with that pint better off.
Economic perception is reality – Workington man (your stereotypical swing voter) is feeling 40% less confident since 2025 began. With Essex man reducing or deferring spending on everyday items: other hints and tips include wash on 30 degrees rather than 40 could reduce running costs by 38% (or just wear clothes for longer!), showering for 5 minutes not 8 saves £61 a year and a dual flush toilet can slash £109 off the water bill.
That economic bellwether that is Wetherspoons, founded when the original grocer’s daughter entered No10, with its value-conscious clientele has vowed to keep price rises to a minimum despite facing tax, wages and energy pressures. A pint of real ale and Korean chicken are best sellers, even if its 4.00am in the departure lounge at Birmingham Airport!
Simon Cossey is Dafferns’ Business Development Consultant and part of our Strategic Advisory team.
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