Britain Sleepwalking Toward Fiscal Precipice
New Prime Minister Andy Burnham must tame welfare or prepare for IMF bailout.
T
oday, british public opin- ion is confused, gloomy, often angry. This is not a new devel-
opment. When Prime Minister John Major replaced Margaret Thatcher, he said that he wanted a nation at ease with itself. He realized that much as they admired her achievements, they were weary of what one might term the restlessness of greatness. They felt that if she were an airline
pilot, the “fasten seat belts” sign would never be switched off ; that she would steer deliberately for turbulence. Instead, Major would calm every-
thing down. So, he did, for about fi ve minutes. So how is our latest prime minister,
Andy Burnham, getting on? The economy is at the root of his,
and the country’s, problems. Britain was hit hard by the world economic and banking crisis of 2008, which was exacerbated by the then-government’s failure to control public spending. When David Cameron took over
in 2010, he set about trying to rein in government spending and we did see a measure of economic recovery, until the storms arrived. The fi rst was Brexit in 2016, whose consequences were inevitably destabi- lizing. Then came COVID-19. This economic tsunami required
strong leadership. Instead, we had successive prime ministers who were unable to cope. In the case of COVID-19, it led to a
diff erent plague: rampant welfare. Subsidies were fl ung at businesses
and workers. The result was a new culture, a moral col- lapse.
Large numbers of
people got used to being paid without having to work. In Britain today, there are a million young- sters who are neither in jobs, education, or training. There are also 2.7 million people
who have persuaded their doctors that they are not fi t to work. Together, their welfare benefi ts are crippling the Brit- ish economy. At the same time, tax levels are as
high as they have been for years, and the same is true of government borrowing. Britain is on the verge of a fi scal
crisis. Fifty years ago, Britain had to be bailed out by the International Mon- etary Fund. There are respected com- mentators who believe that we are not far away now from a similar fate. At present, the government’s welfare
bill is over 10% of GDP and a quar- ter of all public expenditure. This is unsustainable, politically, economically — and morally.
£2.98 TRILLION £352.8 BILLION £90.4 BILLION
U.K. public sector net debt as of July 2026 — equal to 94.1% of GDP.
Forecast welfare spending for 2026-27, equal to 11.2% of GDP.
How will Burnham cope? He has announced one goal: to
make a break with 40 years of Thatch- erite neoliberalism. But he ought to be aware that there is one crucial dif- ference between him and Thatcher. She did not care what people thought about her. She believed in doing what was right and confronting the conse- quences.
Beyond easy rhetoric, what does Burnham mean by breaking with neo-liberalism? Does he mean restoring trade union power and in allowing national- ized industries to plun- der the public purse? Does he mean increasing taxes? As it is, the richest 1%
of taxpayers pay 28% of all income tax: the richest 10% contribute 60%. His supporters insist that those with the broadest shoulders should bear the heaviest burdens. Successful Brits might well reply that those with broad shoulders may also have long legs. If Burnham sets out to please the
left, we can expect more taxes to punish the wealthy, thus driving them abroad. But if he wants the country to suc-
ceed, he ought to bring welfare spend- ing under control and leave tax rates alone. If he is really bold, he might even promise cuts for the future. But if he listens to his own lefties,
he might prepare for an early visit to London by the IMF.
U.K. FINANCES: BY THE NUMBERS 2.8 MILLION
Forecast spending on health- and disability-related benefits in 2026-27.
People on Universal Credit assessed as having limited capability for work and work-related activity.
981,000
Young people ages 16-24 who were not in employment, education or training.
37% OF GDP
Tax take forecast for 2026-27. Projected to climb to 38.5% by 2030-31.
OCTOBER 2026 | NEWSMAX 59
SCOTT HEPPELL/POOL/AFP VIA GETTY IMAGES
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