We are running on vapour

When fighter jets are out of fuel, the pilots know they have a few seconds of power left – the vapour in the tanks after the fuel is gone. That’s exactly where we are in the UK. 

For quite some time it has been obvious we do not have the capacity to sustain our social care and other welfare programs. And why is that? It’s very simple.

In 2023, 52.6 per cent of all individuals lived in households receiving MORE in benefits and services than they paid in taxes. That has got worse since. The present government’s policies are deliberately aimed at increasing the vassal state, and in reducing those that have in the mistaken belief that this will make their supporters  better off. The result is that there are more people who have a vested interest in voting in those that give them more. As it stands, unless there is a political earthquake, within a few years we will have lost the capacity to actually pay for anything.

Sadly, digging a bit deeper, over 45% of working people receive benefits. This is an utterly incredible and unbelievable percentage. Rachel Reeves has no option but to increase taxes and that in itself is going to drive yet more nails into the coffin that was the prosperous country that used to be Great Britain.

Alistair Heath has a superb, encapsulating phrase. The United Kingdom is now, he asserts, “The world’s welfare state of last resort.” And he is not wrong.

We are told that by such and such a year there will be no more immigrants put up in hotels. But again, digging deeper, it transpires the Government is actually buying up hotels. So once owned, hey presto!

The tax base is getting smaller as year on year the blob (civil service and local government) grows. That means there are fewer and fewer people actually MAKING money and more simply sucking it in. It is really frightening that there were 1% FEWER payrolled people in May 2025 than a year previously. And terrifyingly, there are an ADDITIONAL more than 400,000 living in the UK, so the actual drop is even greater. As of now, current spending plans would amount to £48,000 pa per household. And that is a complete travesty of politicians saying they are improving the economy. Every penny taken from the private sector reduces its capacity to grow. In essence, the private sector is being crowded out,  fettered by the dead hand of the state as enterprise and innovation are ground down.

I said at the beginning we were on vapour. That will disappear over the next two years. For those of us old enough, we remember Dennis Healey’s “Crisis? What crisis?” immediately prior to the IMF being called in.

And don’t for one minute think that we have had austerity here. How could there be when the State’s take has increased from about one third under Blair to about one half now? Any austerity has entirely been to the detriment of the private sector. Think of taxes, regulations and net zero, which in itself is destroying vast swathes of what remains of our industries.

I’m sorry to say I don’t see anything changing for the better – the only u-turns have been those that actually spend more rather than less.

We need a Millei in this country if only to stop increasing payments. If there was a complete halt on increases in welfare and other payments, the resultant stop on the drag of business would, in a few years, result in a miraculous recovery. The problem is we are simply not prepared to have less. Every opinion poll suggests that people want more and more spent by the state, but paid for by someone else. I regret to tell you it doesn’t work like that. Well, it might if we nurtured our non-doms and highest earners rather than driving them out for ideological reasons. As ever, when this government goes – as it will – there will be less ability to grow and recover. Every policy so far enacted has done the exact opposite of promoting growth. And in the latest IMD world competitiveness rankings we have dropped to number 29. In case you don’t know number 1 is Switzerland with lowest taxes and strongest public finances – funny how that seems to have worked for as long as anyone can remember. UBS’s UK wealth management chief, Michel Frey said:

“Average real-term wealth per adult in the United Kingdom fell in 2024 because living-cost pressures and rising interest rates moved faster than either house prices or most financial markets. Naturally, this dented people’s ability to build or retain wealth.”

In contrast, in America more than 1000 new millionaires were created every day last year.

On a completely unrelated note, how do you know things are happening of importance in the world?

Answer: monitor the pizza parlours near the Pentagon. When their orders suddenly go crazy, there’s something happening. As they did in the 24 hours running up to Israel’s bombing of Iran’s nuclear facilities…

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