Britain, a once-glorious imperial state, is now facing a serious financial crisis. The recent declaration of bankruptcy in the central English city of Nottingham due to a local** overspending of £23 million has exacerbated the UKEconomyThe dilemma. This news undoubtedly shocked the Chinese people and also caused concern about the UKEconomyConcerns about the outlook. This article will look at the reasons for the local ** bankruptcy, the United KingdomFiscal systemand Sunak's policy failures, delve into the predicament facing the UK and analyze its possible consequences.
There are two main reasons for local bankruptcy in the UK: one is the imbalance of fiscal revenues and expenditures, and the other is thatFiscal systemThere are defects. As far as the imbalance between fiscal revenue and expenditure is concerned, many localities are overly optimistic in decision-making and fail to reasonably estimate fiscal revenue and expenditure, resulting inFiscal deficitsSevere. In addition, there are still problems such as management corruption and indiscriminate use in some places, which further increase the financial pressure. WhileFiscal systemaspects, the United Kingdom implements is:Tax-sharing systemThere is greater fiscal autonomy at all levels, but this also means that fiscal revenues are dispersed, for someEconomyIn less developed regions, it is even more difficult to afford public services and infrastructure. The intertwining of these two aspects has led to an increasing risk of local bankruptcy.
The imbalance between fiscal revenue and expenditure is an important cause of local bankruptcy. Many places ** are being formulatedBudgetThey were overly optimistic, overestimating fiscal revenues and underestimating fiscal expenditures. They are overly dependent on taxes from specific industries, and once there is a problem in these industries, fiscal revenues will drop significantly, resulting inFiscal deficitsFurther expanded. In addition, there are problems of management corruption and misuse in some places, which leads to a waste of resources and an increase in financial pressure. The long-term accumulation of these problems has caused the local government to fall into the predicament of bankruptcy.
In addition, BritishFiscal systemThere are also certain flaws. ImplementationTax-sharing systemIn the United Kingdom, there is greater fiscal autonomy at all levels, which to a certain extent improves the sense of responsibility and execution of the local government, but it also makes the fiscal revenue dispersed, and there are great differences in the fiscal capacity of different regions. For someEconomyIn underdeveloped regions, the financing needed to maintain public services and infrastructure is a huge challenge. And these places** are often unable to attract more investment and industrial development through their own efforts, which further exacerbates the financial difficulties. Hence the BritishFiscal systemDeepening and reforms are needed to solve the problem of local ** bankruptcy.
With the continuous increase in local ** bankruptcies, people have targeted the former Chancellor of the Exchequer, that is, the current British Prime Minister Sunak. Since taking office, Sunak has taken a tough stance on China, making many bold remarks about China. However, the policies he pursued failed to address the root causes of the BritishEconomyproblems, on the contrary, exacerbated Britain's predicament.
Sunak's policy failure is mainly reflected in two aspects: First, he has failed to effectively reduce the control of fiscal revenue and expenditureFiscal deficits, which led to the further deterioration of the financial problems of the local **. Second, in the privatization reform, he failed to solve the current problems in the privatization process, resulting in a decline in the operational efficiency and quality of some public service projects. As a result of these policy failures, the risk of bankruptcy in the UK has been exacerbated.
Two cities in the UK have declared bankruptcy so far, and it is expected that more places** in the UK will be at risk of bankruptcy in the next few years. If this continues, it will have serious consequences for British society.
First of all, the shutdown will cause public services to not function properly. Local bankruptcy means that there are no longer enough funds to pay employees' salaries, which will directly affect the work of police, janitors and all kinds of service personnel, which in turn will lead to chaos in social order and a decline in the level of public services.
Secondly, placeEconomyThere will be a further recession. Local bankruptcy not only means that infrastructure and public services cannot be supported, but also localEconomyDevelopment is restricted. EconomyThe recession will lead to:Unemployment rateThe rise of the risk of social instability increases to make the placeEconomyFurther bogged down.
And finally, the country as a wholeEconomywill be affected. The bankruptcy of the local ** will have a ripple effect on the entire countryEconomyNegative impact. Especially in the current global worldEconomyIn the general environment, the predicament of the United Kingdom is even more prominent. The country's high inflation in the UK and support for the conflict in Ukraine have also exacerbated the country's effortsEconomic risk, which may causeEconomyLong-term recessionUnemployment raterising, rising inflation, etc.
All in all, the risk of local insolvency in the UK cannot be ignored, which will have a direct impact on the functioning of public services and localitiesEconomydevelopment. And Sunak's policy failure has exacerbated Britain's predicament. For China, this news is also a reminder to remain vigilant and strengthen the UKEconomyresearch and monitoring in order to respond and prevent accordingly.