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Follow The Money: How much does Britain cost?
What is the truth about Britain's finances?
Paul Johnson and the enormously respected Institute for Fiscal Studies aim to hold Government to account - without which politicians will get away with their half-truths, elisions and dubious claims.
This is a forensic examination - by the man best placed to do so - of the £1 trillion it now costs to run the United Kingdom's economy. To follow the money. To provide an explanation, of where that money comes from and where it goes to, how that has changed and how it needs to change.
Government decisions determine the welfare of the poor and the elderly, the state of the health service, the effectiveness of our children's education, and how prepared we are for the whether that is a pandemic or global warming. As a society, we are a reflection of what the government spends.
Johnson looks at what happened following the financial crisis of 2008-09 and the austerity years that followed. He examines the way that the government tackled the economy during Covid - when the UK budget shot up to over a trillion for the first time - and he analyses prospects for our future as we grapple with looming recession and the cost of living crisis.
Paul Johnson and the enormously respected Institute for Fiscal Studies aim to hold Government to account - without which politicians will get away with their half-truths, elisions and dubious claims.
This is a forensic examination - by the man best placed to do so - of the £1 trillion it now costs to run the United Kingdom's economy. To follow the money. To provide an explanation, of where that money comes from and where it goes to, how that has changed and how it needs to change.
Government decisions determine the welfare of the poor and the elderly, the state of the health service, the effectiveness of our children's education, and how prepared we are for the whether that is a pandemic or global warming. As a society, we are a reflection of what the government spends.
Johnson looks at what happened following the financial crisis of 2008-09 and the austerity years that followed. He examines the way that the government tackled the economy during Covid - when the UK budget shot up to over a trillion for the first time - and he analyses prospects for our future as we grapple with looming recession and the cost of living crisis.
313 pages, Hardcover
First published February 26, 2023
207 people are currently reading
1,304 people want to read
About the author
Paul Johnson
471 books19 followersLibrarian Note: There are more than one author in the Goodreads database with this name.
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Displaying 1 - 30 of 101 reviews
June 11, 2023
This book is not a light 280 pages, but oh is it so worth it. I'd encourage everyone in the UK to read this asap, given everyone (over 18) has the right to vote and thus implicitly express an opinion on fiscal socioeconomic policy that impacts us all. This book is hard hitting but it is stuffed with factual and important information. 🔢
It sets out a clear case that we need swift and substantial changes to areas of our tax system that are inherently unfair and regressive. Council tax and stamp duty are an absurd mess. National insurance is terribly flawed. VAT is also too complex. Corporation, capital gains and inheritance taxes could also do with reform and/or a clearer and consistent long-term direction with fewer ridiculous loopholes. 🔀
On the spending side, again more long-term and consistent direction is needed: Education and social care is woefully underfunded. Attempts at levelling up poorer regions are laughable. The NHS too, which is great in theory but isn't all as great in practice (and probably suffers from exactly the pedestal that it's placed on), has been hampered significantly by the current government's attempts at improvement (that have arguably made things worse). Iron out issues to improve Universal Credit, but let's not change the whole welfare system again. 🏥💷
Finally, it's great to see a well-deserved shout-out to Steve Webb for revamping the state pension and introducing DC freedom of choice; but there's still work to be done on UK pensions. Let's be more frank that DB members have it really good (and indeed better than was probably originally intended), and think about ways to improve the new DC world we live in for the current workforce generation. Higher default DC contributions? Is CDC the answer? And is there more that we can do with existing DB assets? I could posture on these all day (let me know if you fancy a coffee or beer 😉), but at the very least the status quo is surely not enough.
We should, and must, demand more from both ourselves and our government. We cannot have repeated policy changes and/or reports to suggest improvements that end up as non-starters. We face huge challenges from climate change 🌡️☀️☔⛈️🌪️, an ageing population, and recent weak economic growth, to name but three, but we can still create a better path and prospects for the future.
It sets out a clear case that we need swift and substantial changes to areas of our tax system that are inherently unfair and regressive. Council tax and stamp duty are an absurd mess. National insurance is terribly flawed. VAT is also too complex. Corporation, capital gains and inheritance taxes could also do with reform and/or a clearer and consistent long-term direction with fewer ridiculous loopholes. 🔀
On the spending side, again more long-term and consistent direction is needed: Education and social care is woefully underfunded. Attempts at levelling up poorer regions are laughable. The NHS too, which is great in theory but isn't all as great in practice (and probably suffers from exactly the pedestal that it's placed on), has been hampered significantly by the current government's attempts at improvement (that have arguably made things worse). Iron out issues to improve Universal Credit, but let's not change the whole welfare system again. 🏥💷
Finally, it's great to see a well-deserved shout-out to Steve Webb for revamping the state pension and introducing DC freedom of choice; but there's still work to be done on UK pensions. Let's be more frank that DB members have it really good (and indeed better than was probably originally intended), and think about ways to improve the new DC world we live in for the current workforce generation. Higher default DC contributions? Is CDC the answer? And is there more that we can do with existing DB assets? I could posture on these all day (let me know if you fancy a coffee or beer 😉), but at the very least the status quo is surely not enough.
We should, and must, demand more from both ourselves and our government. We cannot have repeated policy changes and/or reports to suggest improvements that end up as non-starters. We face huge challenges from climate change 🌡️☀️☔⛈️🌪️, an ageing population, and recent weak economic growth, to name but three, but we can still create a better path and prospects for the future.
March 16, 2023
I bought this after reading Larry Elliot's review in The Observer. Elliot's review said the book was a bit dry and lacking in anecdotes. Although it does lack anecdotes, it certainly isn't dry. But I did find it a tad more basic than I was expecting. I'm sure when the book was commissioned Johnson and his publisher wanted to appeal to as broad a range of people as possible. Which meant keeping things simple and jargon-free. Especially given the number of statistics that had to be included. And for that they should be congratulated. State pensions and local government spending aren't the easiest things to write comprehensibly and entertainingly about. And given the amount covered in the book it would've been impossible to have gone into much greater detail without producing something three times longer. But it is very much a beginner's guide. And it isn't without it's generalisations. Nevertheless, an excellent starting point.
January 2, 2024
I was given this for Christmas after having requesting it. I was not disappointed. I have been reading, listening & watching Paul Johnson for many years. He is one of our foremost economic commentators. He has worked in the upper reaches of the civil service & then in the think tank world mainly for the IFS now as its Director (The Institute of Financial Affairs). With this background he is handily placed to opine on the UK's big picture from an economic & financial standpoint. This book examines at all aspects of fiscal policy: how the government raises revenue through tax and what it spends it on. The aim of it is to provide – as the author puts it – an explanation of where the money comes from, where it goes to, how that has changed over time and how it needs to change in the future. It succeeds in my opinion admirably. It also written in an easily comprehensible style making it accessible to the general reader.
December 24, 2024
Learnt some things! Better understand the urgency for council tax reform and did not realise how sorely outdated the basis for funding allocations between councils is. The points on further education felt esp relevant as well. A bit of a chore to finish - probably didn’t help that I started reading this during a course on tax…
Will be following up with a book not written by an economist next lol
Will be following up with a book not written by an economist next lol
March 13, 2025
The book comes highly recommended, it's a huge achievement and should be mandatory reading for anyone interested in politics, or the broader issue of financing and running the country.
The astonishing thing about a book that is largely down from data that anyone can download free from the Internet is that it's so informational and such a revelation at times - about matters which affect us all like tax, duties, pensions, education, health, welfare and local government. Of course, Paul Johnson has spent his entire career immersed in government via the civil service, and as a senior economist, so has a wealth of experience to draw on. Johnson seems to have endless anecdotes about both politicians or drawn from his own life, which add to the narrative.
I especially liked that Follow The Money didn't bang any particular political party drum or economic approach. Every government has made mistakes, or gone down the wrong path at times. Some of those are ideological but more often it's for other reasons. If you want to cherry-pick things that Labour or the Tories have done badly from the book though there are plenty of examples!
You may be tempted to write this off as the fluffy work of economic models but it's not. It's about the actual money that Britain collects and then spends on itself, starting with the biggest items and working down the list. It first looks at income, then expenditure. Both subjects are fascinating, not least because we live in a country that is centuries old, and has operated continuously throughout that time despite all the things happening in the nation, as well as in the wider world. Consequently, we have a bizarre hodgepodge of a financial system that is radically different in many ways from what you would come up with if you had to invent the United Kingdom from scratch.
There's so much in the country that is wrong, and the whole process of chopping and changing leaders and ministers has caused chaos on occasion, not to mention our political cycle which discourages long-term planning. The tendency to backtrack to the status quo, with slight fudges, bedevils our country as well.
What next? A second reading I think. But I hope Follow the Money doesn't end here. Just like governments, it would be good to see a new edition every 5 years.
The astonishing thing about a book that is largely down from data that anyone can download free from the Internet is that it's so informational and such a revelation at times - about matters which affect us all like tax, duties, pensions, education, health, welfare and local government. Of course, Paul Johnson has spent his entire career immersed in government via the civil service, and as a senior economist, so has a wealth of experience to draw on. Johnson seems to have endless anecdotes about both politicians or drawn from his own life, which add to the narrative.
I especially liked that Follow The Money didn't bang any particular political party drum or economic approach. Every government has made mistakes, or gone down the wrong path at times. Some of those are ideological but more often it's for other reasons. If you want to cherry-pick things that Labour or the Tories have done badly from the book though there are plenty of examples!
You may be tempted to write this off as the fluffy work of economic models but it's not. It's about the actual money that Britain collects and then spends on itself, starting with the biggest items and working down the list. It first looks at income, then expenditure. Both subjects are fascinating, not least because we live in a country that is centuries old, and has operated continuously throughout that time despite all the things happening in the nation, as well as in the wider world. Consequently, we have a bizarre hodgepodge of a financial system that is radically different in many ways from what you would come up with if you had to invent the United Kingdom from scratch.
There's so much in the country that is wrong, and the whole process of chopping and changing leaders and ministers has caused chaos on occasion, not to mention our political cycle which discourages long-term planning. The tendency to backtrack to the status quo, with slight fudges, bedevils our country as well.
What next? A second reading I think. But I hope Follow the Money doesn't end here. Just like governments, it would be good to see a new edition every 5 years.
February 7, 2024
Author Paul Johnson is, of course, the much-respected Director of the Institute for Fiscal Studies (IFS) which seeks to hold the government to account on matters of tax and spend. This is a fascinating and very readable account of the taxes we pay and how the government spends them – you will not be surprised to hear Johnson is unimpressed by much of our tax and spend system. Without straying into the political, he takes the reader through where and how the government takes money from us and the inconsistencies, contradictions, and accidents of tax policies. He then goes on to look are various areas of government spending: from health, welfare, local government, pensions and more. Boring stuff you might think, but Johnson is a very shrewd, informed and personable guide and makes it all interesting and highly readable.
This book is essential reading for anyone interested in better understanding our national discourse. It is a book about tax and spend, but of course much more about the governance of our nation and it is clear that not is all as it should be. The Times in its review (quoted at the front of my copy) simply says ‘buy it, read it and weep’.
This book is essential reading for anyone interested in better understanding our national discourse. It is a book about tax and spend, but of course much more about the governance of our nation and it is clear that not is all as it should be. The Times in its review (quoted at the front of my copy) simply says ‘buy it, read it and weep’.
June 29, 2024
"There are no short cuts, no easy answers. Those who claim there are, are taking us for fools"
A great synthesis of the U.K.'s economic and social system, Johnson's holistic approach considers a range of areas of public policy, including education, tax, disability, housing, local government and health.
This book is especially good for someone who has always been less familiar with the fiscal side of public policy. Johnson gives precise and easily understood explanations of various aspects of the tax system, including national insurance, income, VAT, council and inheritance tax. His overarching point in picking apart the system is to demonstrate the need for a simpler, more streamlined fiscal system. And he does so very convincingly - the debacle over Jaffa Cakes is one to remember.
Certainly, the strongest take-aways from the book are its incessant focus on a need for a realistic politics to thrive. We must recognise the need for long-term planning, over the short-term political thinking so common in our politics today, especially over the last 14 years with 5 Prime Ministers and a high ministerial turnover rate making informed decision-making about the future of our country almost impossible.
Johnson's account is thankfully non-ideological. He does not shy away from taking nuanced stances on divisive issues in order to provide realistic, workable solutions, such as of Universal Credit. Most importantly, Johnson recognises that no policy will please everyone. Politics and policy are very different beasts, but nonetheless policy should not be enacted on the whims of electoral chances. Some may rightfully question Johnson here - is such an approach viable? For sure, in our current politics such a fact-based approach may be difficult. But Johnson does provide a vision of a politics based on grounded, well-researched and most importantly effective ideas that indeed provide hope for a future politics that can tackle the difficult problems that our country faces.
A great synthesis of the U.K.'s economic and social system, Johnson's holistic approach considers a range of areas of public policy, including education, tax, disability, housing, local government and health.
This book is especially good for someone who has always been less familiar with the fiscal side of public policy. Johnson gives precise and easily understood explanations of various aspects of the tax system, including national insurance, income, VAT, council and inheritance tax. His overarching point in picking apart the system is to demonstrate the need for a simpler, more streamlined fiscal system. And he does so very convincingly - the debacle over Jaffa Cakes is one to remember.
Certainly, the strongest take-aways from the book are its incessant focus on a need for a realistic politics to thrive. We must recognise the need for long-term planning, over the short-term political thinking so common in our politics today, especially over the last 14 years with 5 Prime Ministers and a high ministerial turnover rate making informed decision-making about the future of our country almost impossible.
Johnson's account is thankfully non-ideological. He does not shy away from taking nuanced stances on divisive issues in order to provide realistic, workable solutions, such as of Universal Credit. Most importantly, Johnson recognises that no policy will please everyone. Politics and policy are very different beasts, but nonetheless policy should not be enacted on the whims of electoral chances. Some may rightfully question Johnson here - is such an approach viable? For sure, in our current politics such a fact-based approach may be difficult. But Johnson does provide a vision of a politics based on grounded, well-researched and most importantly effective ideas that indeed provide hope for a future politics that can tackle the difficult problems that our country faces.
June 22, 2024
A very intelligent bloke who writes well to make a dry topic interesting
October 4, 2024
A page turner on the finances of the British government?
Better believe it.
Better believe it.
February 6, 2024
4.75/5
Really good. The first two chapters cover how the state gets most of its money. The rest of the book covers the biggest expenses for the government and how that money is spent. The topics included are welfare/benefits, pensions, old age care, healthcare/NHS, education, and local councils+devolution. The book is well written, accessible imo and provides plenty of information.
The biggest area that isn't covered is defence and after that it goes down to the relatively (considering the scale of government spending), topics like the foreign aid budget.
Overall if you are British and have any interest in politics I'd say this is worth reading.
Really good. The first two chapters cover how the state gets most of its money. The rest of the book covers the biggest expenses for the government and how that money is spent. The topics included are welfare/benefits, pensions, old age care, healthcare/NHS, education, and local councils+devolution. The book is well written, accessible imo and provides plenty of information.
The biggest area that isn't covered is defence and after that it goes down to the relatively (considering the scale of government spending), topics like the foreign aid budget.
Overall if you are British and have any interest in politics I'd say this is worth reading.
June 2, 2023
Fascinating insight in to the inner workings of the UK government finances and how the government runs the country. What sounds like a very dry topic has been brought to life with the way it has been written, easy to understand & very engaging.
One interesting statistic quoted (among many in the book) is that 90% of income tax is paid by the top 30% of earners. So increasing taxes on the rich is not always a sensible move to make, if it makes them move out of the UK. Definitely a fine line to tread
One interesting statistic quoted (among many in the book) is that 90% of income tax is paid by the top 30% of earners. So increasing taxes on the rich is not always a sensible move to make, if it makes them move out of the UK. Definitely a fine line to tread
January 6, 2025
This book is a great explainer of how much money is collected by the state and how, as well where that money is spent. Johnson outlines the difficult decisions that are awaiting the UK as the country ages and climate change worsens, placing increasing pressure on both the state welfare system and household expenses.
July 19, 2024
Although I didn’t think I was picking up on the facts or remembering much, I have begun to notice myself becoming much more in tune to economic politics.
The final chapter sums things up nicely but you need the context of the previous chapters to truly understand things.
If more people read this then meaningful change might be on the horizon.
Prepare for the repeated message throughout, it might feel repetitive at first but you start getting clearer answers to the country’s problems after about a third of the way in.
The final chapter sums things up nicely but you need the context of the previous chapters to truly understand things.
If more people read this then meaningful change might be on the horizon.
Prepare for the repeated message throughout, it might feel repetitive at first but you start getting clearer answers to the country’s problems after about a third of the way in.
April 14, 2024
This was such an insightful book, it gave me a better scope on the politics of the UK at large. Very well written that I, as someone who has read next to no economics, found it easy to read and engaging!
January 16, 2025
Really interesting book with a lot of information to take on board. A bit biased as he used to work in the Treasury and he talks about a 'spiteful, politically motivated' sacking of someone in the Treasury, but then again he may well be right. The final chapter sums up how we need economic growth to move forward, but how this entails difficult, often unpopular choices.
June 29, 2023
This book wasn't exactly what I thought it was going to be, but it was still pretty good. I really wanted an epistemically humble survey of British fiscal policy, with Johnson pointing out what (almost) everyone agreed on, and where he was giving his own take, like a university lecture. Instead, this book was a bit of a polemic, meaning you need to have a decent grasp of each of the many topics covered in order to know what to take a gospel. Nonetheless, it was fairly comprehensive (maybe too comprehensive at times) and gave the IFS (orthodox) view.
On the substance, it was interesting that each time Johnson gets into why things aren't as he thinks they should be, it is usually some combination of politics, status quo bias, or governance failures. This seems right, and the diagnosis is the marker of someone who has been on the scene for a while (i.e., it is the difference between asking what the right policy would be, and asking why the policy hasn't already been fixed).
On the substance, it was interesting that each time Johnson gets into why things aren't as he thinks they should be, it is usually some combination of politics, status quo bias, or governance failures. This seems right, and the diagnosis is the marker of someone who has been on the scene for a while (i.e., it is the difference between asking what the right policy would be, and asking why the policy hasn't already been fixed).
April 11, 2023
A nice account of how the UK government is funded and how it spends money. Perhaps it leans a bit far to the technocratic in its suggestions, but it also shows how difficult it is for both Left and Right to overturn financial norms politically. Really the overriding message is that there's little hope of anything changing for the long-term good until things get so bad that such change is the only thing to do. Such is life.
November 20, 2023
Found the first half explaining the tax system fascinating (not a sentence I ever imagined I'd write). But Johnson spends the rest of the book explaining the flaws in the British government and these points are neither new nor enlightening. Every single problem seems to have one answer: higher taxes.
Felt like I learned some valuable knowledge but at the expense of being stuck with a centrist dad complaining about the Tories for too long.
Felt like I learned some valuable knowledge but at the expense of being stuck with a centrist dad complaining about the Tories for too long.
June 17, 2023
10/10 - fantastic description of modern Britain and its flaws
April 1, 2023
Excellent.
February 22, 2024
Leftist statist altruist view on how to use the state more effectively towards these goals
February 4, 2024
About as bang up-to-date as it is possible to get in book form. Who would have thought a book primarily about tax could be as interesting as this is. And it really is a bit of an eye-opener confirming what we UK residents have experienced.
Paul Johnson works for the Institute of Fiscal Studies and has previously worked for the Treasury and Ministry of Education. He is first and foremost an economist. He is down to earth, straight and believable and has a way of saying things which de-complicate them. Economists, lawyers and politicians appear to have a monopoly on gobbledygook but Johnson cuts right through it.
Politicians are generally speaking either spineless idiots (with an increasing number of lawyers that see themselves as politicos) or self-serving cowards. Tax policy is riddled with holes. There is no political will to reform tax policy. To do so comprehensively requires longer than one term in Parliament. Suggesting that tax should rise is political suicide at the ballot box. Similarly suggesting that the well off should bear a heavier tax burden than the less well-off is like asking turkeys to vote for Christmas. People who make these decisions are all members of the well off. Therefore Inequality, or if you like the Conservative buzz-word of 'Levelling Up' is never going to be seriously dealt with. Everyone bears the burden of bad tax. We are all complicit because at heart we are all conservative (small c) and inertia rules. WE like to know what we know and not keep changing. We kick up when things change. We vote people out (or like to think we do). So if politicians are to blame for an unwillingness to reform tax policy then the demos is as much to blame for wielding the sword of choice and refusing to accept that the system is not static but dynamic - particularly if you accept that this dynamic system is defined by OUR choices. Complexity in the tax system does not make for equality - just more ways for avoidance. If Income tax is complicated the case is doubly so for Corporation tax and VAT is a lawyers playground to make money over disputed clauses. The bottom line is that Government spending appears to have little sense of strategy. This is made very plain when discussing the NHS. We all treasure the NHS. But we need to be aware of Organisational Narcissism. It doesn't do a very good job of keeping us alive. Its records on tackling cancer, cardio-vascular disease and ageing are poor. And it requires by far the greatest amount of government finance and at an increasing alarming rate.
A lot of what Johnson says and implies really comes down to VALUE; how we value individuals in our society and what kind of society we want. We now have a society that is ageing, and although we have more people than ever in work, many of those jobs are bullshit jobs paid at minimum rate. We have lost a large proportion of skilled and craft-jobs. Enjoyment in work and quality of work has decreased. We also have the highest ever levels of inequality between the rich and poor and a redefinition of the poor who are now predominantly working and parents. Housing supply and demand at affordable prices is in crisis. The young are increasingly funding the old. There is a government department dedicated to Levelling Up - Department for Levelling Up, Housing & Communities. But the reality is that very few people know or believe in what it does or believe that the department itself believes in the task allotted to it. Investment incentives awarded to the provinces are really about making it easier for London. HS2 showed that up in clear light. Rather than decreasing the journey times from the North to London, the money could have been better spent funding inter-connectivity between cities in the North. Furthermore HS2 has been eroded and cutback continuously since its proposal. Meanwhile, coastal communities, East Anglia and places not in the North or the South East are left to get on with it the best they can. It appears that the South West, where I reside is set to become the Air B 'n' B and Rest and Recreation centre for the South East giving rise to a low pay seasonal job economy with an ageing population and few prospects for the young.
Whether another change in government will introduce the political will to tackle some of these problems expertly identified by Johnson is very much open to debate. Starmer's policies all seem like Tory-Lite. Added to the decisions required and identified throughout the book is the existential problem of climate change. Raising the time frame to 2050 for UK Net Zero has in some ways benefitted the community, but the encouraging halving of carbon emissions in 20 years has been attained through the easier initiatives which have not particularly challenged individuals to change. The next processes in achieving Net Zero will impact individuals economically and procedurally and as such there needs to be a willingness from government to help communities and invoke strategy. What is needed is political willingness and bravery that has so far been shown to be markedly absent. One would like to be optimistic but the reality and experience has shown that we more often shoot ourselves in the foot rather than hitting targets.
This is a thoroughly worthwhile and readable book that should be made compulsory reading for all Members of Parliament.
Paul Johnson works for the Institute of Fiscal Studies and has previously worked for the Treasury and Ministry of Education. He is first and foremost an economist. He is down to earth, straight and believable and has a way of saying things which de-complicate them. Economists, lawyers and politicians appear to have a monopoly on gobbledygook but Johnson cuts right through it.
Politicians are generally speaking either spineless idiots (with an increasing number of lawyers that see themselves as politicos) or self-serving cowards. Tax policy is riddled with holes. There is no political will to reform tax policy. To do so comprehensively requires longer than one term in Parliament. Suggesting that tax should rise is political suicide at the ballot box. Similarly suggesting that the well off should bear a heavier tax burden than the less well-off is like asking turkeys to vote for Christmas. People who make these decisions are all members of the well off. Therefore Inequality, or if you like the Conservative buzz-word of 'Levelling Up' is never going to be seriously dealt with. Everyone bears the burden of bad tax. We are all complicit because at heart we are all conservative (small c) and inertia rules. WE like to know what we know and not keep changing. We kick up when things change. We vote people out (or like to think we do). So if politicians are to blame for an unwillingness to reform tax policy then the demos is as much to blame for wielding the sword of choice and refusing to accept that the system is not static but dynamic - particularly if you accept that this dynamic system is defined by OUR choices. Complexity in the tax system does not make for equality - just more ways for avoidance. If Income tax is complicated the case is doubly so for Corporation tax and VAT is a lawyers playground to make money over disputed clauses. The bottom line is that Government spending appears to have little sense of strategy. This is made very plain when discussing the NHS. We all treasure the NHS. But we need to be aware of Organisational Narcissism. It doesn't do a very good job of keeping us alive. Its records on tackling cancer, cardio-vascular disease and ageing are poor. And it requires by far the greatest amount of government finance and at an increasing alarming rate.
A lot of what Johnson says and implies really comes down to VALUE; how we value individuals in our society and what kind of society we want. We now have a society that is ageing, and although we have more people than ever in work, many of those jobs are bullshit jobs paid at minimum rate. We have lost a large proportion of skilled and craft-jobs. Enjoyment in work and quality of work has decreased. We also have the highest ever levels of inequality between the rich and poor and a redefinition of the poor who are now predominantly working and parents. Housing supply and demand at affordable prices is in crisis. The young are increasingly funding the old. There is a government department dedicated to Levelling Up - Department for Levelling Up, Housing & Communities. But the reality is that very few people know or believe in what it does or believe that the department itself believes in the task allotted to it. Investment incentives awarded to the provinces are really about making it easier for London. HS2 showed that up in clear light. Rather than decreasing the journey times from the North to London, the money could have been better spent funding inter-connectivity between cities in the North. Furthermore HS2 has been eroded and cutback continuously since its proposal. Meanwhile, coastal communities, East Anglia and places not in the North or the South East are left to get on with it the best they can. It appears that the South West, where I reside is set to become the Air B 'n' B and Rest and Recreation centre for the South East giving rise to a low pay seasonal job economy with an ageing population and few prospects for the young.
Whether another change in government will introduce the political will to tackle some of these problems expertly identified by Johnson is very much open to debate. Starmer's policies all seem like Tory-Lite. Added to the decisions required and identified throughout the book is the existential problem of climate change. Raising the time frame to 2050 for UK Net Zero has in some ways benefitted the community, but the encouraging halving of carbon emissions in 20 years has been attained through the easier initiatives which have not particularly challenged individuals to change. The next processes in achieving Net Zero will impact individuals economically and procedurally and as such there needs to be a willingness from government to help communities and invoke strategy. What is needed is political willingness and bravery that has so far been shown to be markedly absent. One would like to be optimistic but the reality and experience has shown that we more often shoot ourselves in the foot rather than hitting targets.
This is a thoroughly worthwhile and readable book that should be made compulsory reading for all Members of Parliament.
September 4, 2023
This is a book to rave about, but not unconditionally. It sets out to describe the public sector in figures - how much is raised from what and how much is spent on what. In doing that, it works really well.
It provides a clear explanation of the main sources of tax income, split between the various forms of tax, along with a variety of other income sources. What I particularly liked was the sense of scale that it brought to the analysis. For example, income tax brings into the Exchequer about 34 times more than inheritance tax. Or VAT brings in about 10 times capital gains tax. I see this as an important comparator when talking vaguely about tax policy.
The same form of approach is taken to the expenditure side. It threw up a number of surprising conclusions for me. For example, expenditure on working age benefits and credits is broadly the same as the state retirement pension. That suggests to me that the old canard about young workers funding the lifestyles of old pensioners is not entirely based upon fact. Taxpayers are also funding those of working age.
The book also allows us to link together income and expenditure in a fairly useful way. For example, national insurance receipts very nearly equal the spending on the health service. I find that a useful piece of information because the NI system was originally supposed to fund the NHS. The obvious implication is that if we want to raise the funding for the NHS, we will need to raise NI levels.
However, this is a step too far for the book. It takes pains to describe what is and to steer clear of what ought to be. I see this as a weakness because it suggests that we live in the best of all possible worlds. This is a view widely touted by the UK Civil Service, but it is far from the mark. After all, politics is all about shifting priorities in spending and income. The book provides some good source information to fuel these discussions, without actually stating the preferences of the author.
For example, there are those who might say that inheritance tax only raising 1/34th of income tax is wrong. They might argue that inheritances from rich people to their heirs ought to raise a larger amount of income. The numbers suggest that even if the inheritance tax take was doubled, after allowing for avoidance and mitigation schemes, it would only allow, for example, a 12% increase in the schools budget. Not to be sneezed at, but not a significant amount, either.
The book is an historical account of income and spending in 2022-23. In setting it out, it highlights the strengths of the Treasury approach, but also it's pitfalls as well. The account is not forward looking, other than vague reference to future events, such as increasing number of Boomers retiring. There is a sense of where we have been, but not much sense of where we are heading. This allows for some misleading conclusions to arise. One large impending budget item that the author has missed is the cost of servicing the public debt. In some forecasts, debt servicing in two or three years time will be larger than the defence budget.
Equally, the author assumes that the current structure may not change. We might ask, however, how sustainable the structure might be with ever increasing amounts of debt being added to the existing pile? There is little to help that conversation in this book.
All in all, there is much to commend this book. It has its drawbacks, but it is very useful in what it does. The author writes in a clear and accessible style. He avoids jargon and takes pains to explain the concepts as clearly as possible. As an introduction to the finances of the UK public sector, there is much to commend in this book.
It provides a clear explanation of the main sources of tax income, split between the various forms of tax, along with a variety of other income sources. What I particularly liked was the sense of scale that it brought to the analysis. For example, income tax brings into the Exchequer about 34 times more than inheritance tax. Or VAT brings in about 10 times capital gains tax. I see this as an important comparator when talking vaguely about tax policy.
The same form of approach is taken to the expenditure side. It threw up a number of surprising conclusions for me. For example, expenditure on working age benefits and credits is broadly the same as the state retirement pension. That suggests to me that the old canard about young workers funding the lifestyles of old pensioners is not entirely based upon fact. Taxpayers are also funding those of working age.
The book also allows us to link together income and expenditure in a fairly useful way. For example, national insurance receipts very nearly equal the spending on the health service. I find that a useful piece of information because the NI system was originally supposed to fund the NHS. The obvious implication is that if we want to raise the funding for the NHS, we will need to raise NI levels.
However, this is a step too far for the book. It takes pains to describe what is and to steer clear of what ought to be. I see this as a weakness because it suggests that we live in the best of all possible worlds. This is a view widely touted by the UK Civil Service, but it is far from the mark. After all, politics is all about shifting priorities in spending and income. The book provides some good source information to fuel these discussions, without actually stating the preferences of the author.
For example, there are those who might say that inheritance tax only raising 1/34th of income tax is wrong. They might argue that inheritances from rich people to their heirs ought to raise a larger amount of income. The numbers suggest that even if the inheritance tax take was doubled, after allowing for avoidance and mitigation schemes, it would only allow, for example, a 12% increase in the schools budget. Not to be sneezed at, but not a significant amount, either.
The book is an historical account of income and spending in 2022-23. In setting it out, it highlights the strengths of the Treasury approach, but also it's pitfalls as well. The account is not forward looking, other than vague reference to future events, such as increasing number of Boomers retiring. There is a sense of where we have been, but not much sense of where we are heading. This allows for some misleading conclusions to arise. One large impending budget item that the author has missed is the cost of servicing the public debt. In some forecasts, debt servicing in two or three years time will be larger than the defence budget.
Equally, the author assumes that the current structure may not change. We might ask, however, how sustainable the structure might be with ever increasing amounts of debt being added to the existing pile? There is little to help that conversation in this book.
All in all, there is much to commend this book. It has its drawbacks, but it is very useful in what it does. The author writes in a clear and accessible style. He avoids jargon and takes pains to explain the concepts as clearly as possible. As an introduction to the finances of the UK public sector, there is much to commend in this book.
February 28, 2025
This is a forensic examination - by the man best placed to do so - of the way the state raises and spends £1 trillion of our money every year. To follow the money. To provide an explanation, of where that money comes from and where it goes to, how that has changed and how it needs to change.
So reads the blurb on the back of Follow the Money by Paul Johnson, a book I was excited to read but that left me wanting. I could not figure out why given the book is so aligned to my interests – Government spending; is so in tune with my way of thinking – analytical, factual; and was so topical – I read this while the US Department of Government Efficiency began its war on the US Federal budget.
Then I reread the blurb and it hit me: I had expected a look at how the state spends £1 trillion. In other words, a look at all the major spending lines of the UK government. Instead, the author scopes out all but the largest line items: welfare; pensions; health; education and social care. From the author’s own Institute for Fiscal Studies Taxlab I can see this barely covers half of Government spending (see here). Defence, Policing and Transport are all missed. There are also other interesting lenses beyond the sectoral one that I had hoped would be explored: how much is spent on administration versus frontline services, or IT and procurement?
What sectors are covered are tackled in just a chapter and with a curious variability in resolution. Billions are scoped out, such as everything in further education bar undergraduate spending, while the author focuses on minor details like changes in Scottish Child Payments in 2023 of £25 per child. There is a lot of historical detail that helps illustrate the arbitrariness of spending or taxation in many cases and assessments of limitations in spending and on ‘what needs to change’ (from the blurb).
All of which adds up to a somewhat confusing book. Aside from the inevitable avalanche of statistics, Follow the Money is easy to follow and ultimately imparts a lot of valuable knowledge. Yet it does not quite deliver against the brief it sets itself. This author is so passionate and so knowledgeable that I would rather have them focus on a genuinely “forensic” look at one policy area. Or else, deliver what I thought this book was which was a sweeping overview of the majority of UK government spending to leave me better informed about where taxpayer money goes.
As it is, I finished the book mildly frustrated. I will certainly read more of Paul Johnson but I cannot help but feel this was a missed opportunity for a refreshingly technocratic piece on Government, vital in today’s anti-fact climate, to make it (as this book did) onto the well-advertised tables at Waterstones.
So reads the blurb on the back of Follow the Money by Paul Johnson, a book I was excited to read but that left me wanting. I could not figure out why given the book is so aligned to my interests – Government spending; is so in tune with my way of thinking – analytical, factual; and was so topical – I read this while the US Department of Government Efficiency began its war on the US Federal budget.
Then I reread the blurb and it hit me: I had expected a look at how the state spends £1 trillion. In other words, a look at all the major spending lines of the UK government. Instead, the author scopes out all but the largest line items: welfare; pensions; health; education and social care. From the author’s own Institute for Fiscal Studies Taxlab I can see this barely covers half of Government spending (see here). Defence, Policing and Transport are all missed. There are also other interesting lenses beyond the sectoral one that I had hoped would be explored: how much is spent on administration versus frontline services, or IT and procurement?
What sectors are covered are tackled in just a chapter and with a curious variability in resolution. Billions are scoped out, such as everything in further education bar undergraduate spending, while the author focuses on minor details like changes in Scottish Child Payments in 2023 of £25 per child. There is a lot of historical detail that helps illustrate the arbitrariness of spending or taxation in many cases and assessments of limitations in spending and on ‘what needs to change’ (from the blurb).
All of which adds up to a somewhat confusing book. Aside from the inevitable avalanche of statistics, Follow the Money is easy to follow and ultimately imparts a lot of valuable knowledge. Yet it does not quite deliver against the brief it sets itself. This author is so passionate and so knowledgeable that I would rather have them focus on a genuinely “forensic” look at one policy area. Or else, deliver what I thought this book was which was a sweeping overview of the majority of UK government spending to leave me better informed about where taxpayer money goes.
As it is, I finished the book mildly frustrated. I will certainly read more of Paul Johnson but I cannot help but feel this was a missed opportunity for a refreshingly technocratic piece on Government, vital in today’s anti-fact climate, to make it (as this book did) onto the well-advertised tables at Waterstones.
June 1, 2024
I was really looking forward to this book given the author's credentials and my hope for clarity around British political economy and finances. And the book does a reasonably good job of giving an overview of some of the main issues. I thought the opening chapters were especially useful in terms of where taxes come from, how money is raised to pay for government, etc. But the rest of the book was a bit underwhelming in my view. I think there were several key problems that I while reading it.
First, he typically had a cynical view of politics and politicians which I think is unfairly negative. He dismisses political constraints if they don't make sense to him economically. He rarely explains in sufficient detail the political values that underpin and intersect with economic decisions which might help to explain why certain decisions were taken. Or he would be negative about economic problems or how much things cost without explaining the actual outcomes (e.g. New Labour is constantly derided as profligate, but what were the outcomes?).
Second, the writing is sometimes a bit careless. He talks of 'we' in England but 'they' in Scotland - which I know is minor but can be very irritating. In other places he says that something makes no sense (see p.115) but never explains why. Citations are sometimes hard to follow, so I can't check out some of the issues he is referring to. And he sometimes writes about topics as though we should already know about them or their meaning. So it's not as accessible as I thought.
And third, I found it really frustrating the way that Johnson mixed up his personal views with what are consensually seen as problems or solutions. It is really hard to figure out when something could be changed because that's what all politicians or economists think or if something is a particularly minority view from Johnson. I think being clearer on this would have been great.
These were, to me, major weaknesses. I really disliked his writing about universities (I might need to declare an interest that I work in one), which focuses almost entirely on tuition fees than a whole host of other structural issues.
First, he typically had a cynical view of politics and politicians which I think is unfairly negative. He dismisses political constraints if they don't make sense to him economically. He rarely explains in sufficient detail the political values that underpin and intersect with economic decisions which might help to explain why certain decisions were taken. Or he would be negative about economic problems or how much things cost without explaining the actual outcomes (e.g. New Labour is constantly derided as profligate, but what were the outcomes?).
Second, the writing is sometimes a bit careless. He talks of 'we' in England but 'they' in Scotland - which I know is minor but can be very irritating. In other places he says that something makes no sense (see p.115) but never explains why. Citations are sometimes hard to follow, so I can't check out some of the issues he is referring to. And he sometimes writes about topics as though we should already know about them or their meaning. So it's not as accessible as I thought.
And third, I found it really frustrating the way that Johnson mixed up his personal views with what are consensually seen as problems or solutions. It is really hard to figure out when something could be changed because that's what all politicians or economists think or if something is a particularly minority view from Johnson. I think being clearer on this would have been great.
These were, to me, major weaknesses. I really disliked his writing about universities (I might need to declare an interest that I work in one), which focuses almost entirely on tuition fees than a whole host of other structural issues.
January 27, 2024
National treasurer: How much does the UK cost? £1.18 trillion a year is the short answer. Is it money well spent? Not always, according to Paul Johnson, an economist by trade, but not one without an awareness of the fallibility of his profession, or a certain dry sense of humour. He’s all over Peston and Laura K (not literally) so one wonders what new he has to say. Quite a lot, actually, and fairly accessibly too. This is one of a triumvirate of books (along with Chris Bryant’s and Ian Dunt’s) that have recently highlighted the state of us, and Johnson’s is not only the most broadscreen, covering health, education, skills and the wider economy, but also the most comprehensive, analysing not only what is wrong and how to fix but also who needs to do what. The director of the Institute of Fiscal Studies doesn’t spare the health service, education providers, politicians (of course) and even his fellow economists - but he also points the finger at us, the public, for our economic illiteracy, unwillingness to engage with difficult choices, and our desire for Scandi-style public services at US rates of tax. Feeling a bit told off, but nevertheless understanding a bit better how VAT works and why a marginal tax rate of 98% might not be a good idea for increasing revenue however tempting it is to bash the rich with sticks. And he does remind us that, whatever we may be feeling about recent events, we still live in a country that (sort of) works, and that’s better than the majority of the world population. But it’s not a given, and we need to do more to keep it that way. In election year, this may not be a bad manifesto.
April 15, 2024
This is a terrific book by the long time writer and authority on economics and how it works.
Paul Johnson explains in crystal clear terms not only how the economy of the UK works, how political rather than economic decisions have brought us to the position of considerable difficulty that we face on a number of fronts and also what could be done to improve the national infrastructure, education, the health service , the provision of social care and just how we can manage the changing age demographic in the UK and the problems it presents.
It's not going to be easy though and this is the main reason why politicians have shied away from resolving these problems but this book in a measured and non partisan approach makes a number of complicated issues much easier to understand and does so without a tone of frustration creeping in which would be wholly understandable.
Long term decisions are required to put our country's finances on an even keel, 15 years of economic stagnation have hurt those least able to cope with income being worth less now than in 2008 and a shrinking pot of money for the government to spend on vital issues.
It's complicated but this book explains just why we cannot carry on as we have done since 2010
Paul Johnson explains in crystal clear terms not only how the economy of the UK works, how political rather than economic decisions have brought us to the position of considerable difficulty that we face on a number of fronts and also what could be done to improve the national infrastructure, education, the health service , the provision of social care and just how we can manage the changing age demographic in the UK and the problems it presents.
It's not going to be easy though and this is the main reason why politicians have shied away from resolving these problems but this book in a measured and non partisan approach makes a number of complicated issues much easier to understand and does so without a tone of frustration creeping in which would be wholly understandable.
Long term decisions are required to put our country's finances on an even keel, 15 years of economic stagnation have hurt those least able to cope with income being worth less now than in 2008 and a shrinking pot of money for the government to spend on vital issues.
It's complicated but this book explains just why we cannot carry on as we have done since 2010
September 19, 2024
A good book! Read it in a few days and would definitely reccommend it.
Thought it was a very useful overview of how the British state raises and spends it's money. I'm very familiar with our politics, but still learnt a lot, and was surprised how extensive our welfare state is and how (without changing that framework) your options are fairly limited when it comes to spending.
Book wasn't perfect however. As it went on he veered more into policy which didn't always land well. E.g. broadening the post-16 curriculum may be a good idea, but when the book is presenting itself as an objective economic overview, those asides (particularly when arguing it saves money in long run) didn't quite work.
The book had the right level of detail throughout, but wish it added on a few more chapters. Like the role of the Treasury was mentioned, but given so many other actors think it has too much control, explaining that in more detail would have been very welcome. Similarly given how economic growth is the one thing which allows you to cut these Gordian knots without too many trade-offs, I wish it had been given its own chapter. E.g. what big policies could encourage growth, what are the political blockers, what are the trade-offs
Thought it was a very useful overview of how the British state raises and spends it's money. I'm very familiar with our politics, but still learnt a lot, and was surprised how extensive our welfare state is and how (without changing that framework) your options are fairly limited when it comes to spending.
Book wasn't perfect however. As it went on he veered more into policy which didn't always land well. E.g. broadening the post-16 curriculum may be a good idea, but when the book is presenting itself as an objective economic overview, those asides (particularly when arguing it saves money in long run) didn't quite work.
The book had the right level of detail throughout, but wish it added on a few more chapters. Like the role of the Treasury was mentioned, but given so many other actors think it has too much control, explaining that in more detail would have been very welcome. Similarly given how economic growth is the one thing which allows you to cut these Gordian knots without too many trade-offs, I wish it had been given its own chapter. E.g. what big policies could encourage growth, what are the political blockers, what are the trade-offs
April 2, 2024
Very insightful and thought provoking.
It changed my thinking slightly on the NHS, especially as the data suggests it is performing so poorly in comparison to similar nations and models. It is a useless exercise to compare it to the US health care system.
It also opened my eyes to the inequalities of systems such as council tax, which is still based on house valuations from 1991. The funding model for devolution in Scotland is also not functioning as was originally designed.
My biased ears listened a bit more intently to the section on education funding. With a budget of £50bn a year, and with the pandemic giving evidence that children are at least 6 months behind, shouldn’t that be reflected in government spending? Alongside further evidence that recruitment and retention of staff is wilting due to real terms cuts to pay across the public sector.
And where do we go next when defence spending needs to rise, but it has been the thing cut gradually over the past few decades to allow for rises in other areas? Especially as an aging population and climate change should be dictating all fiscal policy.
It changed my thinking slightly on the NHS, especially as the data suggests it is performing so poorly in comparison to similar nations and models. It is a useless exercise to compare it to the US health care system.
It also opened my eyes to the inequalities of systems such as council tax, which is still based on house valuations from 1991. The funding model for devolution in Scotland is also not functioning as was originally designed.
My biased ears listened a bit more intently to the section on education funding. With a budget of £50bn a year, and with the pandemic giving evidence that children are at least 6 months behind, shouldn’t that be reflected in government spending? Alongside further evidence that recruitment and retention of staff is wilting due to real terms cuts to pay across the public sector.
And where do we go next when defence spending needs to rise, but it has been the thing cut gradually over the past few decades to allow for rises in other areas? Especially as an aging population and climate change should be dictating all fiscal policy.
This entire review has been hidden because of spoilers.
August 28, 2024
This can't have been an easy book to write. It aims to provide a clear introduction to the way that Britain raises and spends its taxes, while also providing historical background, a critical appraisal of Britain's governance, and some insights into possible future trends. It aims to do this in a relatively light, accessible way, and all in under 300 pages. I think the author did an admirable job of this. Johnson writes with style, clarity, and authority. But I found it a very difficult book to read all the same. Several reviewers have noted that the book is dry; one commented on the lack of anecdotes. I agree, but I was also surprised at the lack of visuals. A huge array of statistics are reported, but there are no graphs, no maps, no tables to illustrate them. I constantly found myself getting bogged down in all the numbers (I read several other books while taking breaks from this one - it took about 4 months to finish in all). There's no doubting the quality of the information on offer here, but the lack of variety in how it was presented means that ultimately, I don't think much of it will stay with me. For that reason, it's hard to recommend.
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