U.K Fiscal Policy Trend (Last Five Years)

 Example No.1

November 2020 - Due to the ongoing Covid-19 pandemic, the U.K has had to implement a fiscal policy for the people of England and Scotland. This is because many people in these two countries have begun to struggle financially due to the pandemic. In addition, the Scottish government does not have the means and capability to implement a similar policy for the people of Scotland. This has led the British government to implement a fiscal policy to keep the people of England and Scotland afloat and to keep the respective economies afloat. 

Example No.2

Financial Crisis 2008 - During the 2008 financial crisis, the U.K government had to increase their fiscal policy in order to help keep businesses afloat and the economy maintained. To do this, and since many people did not have the means to pay their normal tax rate, the government had to decrease taxes. In addition, the government had to grant a subsidy of sorts in order to help keep businesses running and to help keep people from becoming homeless. 

Arguments for and against each policy

Example 1 (for) - Not only did the U.K government help the people of England, they also managed to implement a fiscal policy that would also help the people of Scotland. 

Example 1 (against) - Since the U.K government decided to implement the fiscal policy for both England and Scotland, this means that there was less government funds to utilize for the British economy. 

Example 2 (for) - The decrease in taxes means that people were able to save more money to keep themselves and their families afloat and they were able to continue to buy their household necessities. 

Example 2 (against) - Since the British government decreased taxes during the 2008 financial crisis, this means that they had less income to then use for the fiscal policy to help keep the economy afloat. 

Government Debt

Over the past five years, the U.K. government debt has steadily increased. As of 2020, it was estimated at 2.5 trillion British pounds, or 85.4% of the total U.K. GDP. This large amount of debt is something to consider when considering how much money the government has had to spend during the ongoing pandemic, especially since they are having to implement this policy for both England and Scotland. 

Comments

  1. Dr. Q September 20, 2021 at 6:26 PM

    In ex. 1, what kind of fiscal policy are you referring to?

    ReplyDelete

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