More or Less – "The Stats of the Nation: The Economy" (January 5, 2026)

Host: Tim Harford (BBC Radio 4)

Guests:

• Ruth Curtis (Chief Executive, Resolution Foundation)
• Helen Miller (Director, Institute for Fiscal Studies)
• Professor Mary Spurridge (Economist, Fraser of Allander Institute, University of Strathclyde)
• John Burn-Murdoch (Data journalist, Financial Times)

Overview

This episode kicks off a special five-part series, with Tim Harford and guests tackling the numbers underlying the state of the UK, starting with the economy. They disentangle statistical truths from perception on topics like the cost of living crisis, wage and employment data, inflation’s winners and losers, government spending, taxation (with a special focus on Scotland), and the UK’s tax progressivity compared to other nations.

Harford and a panel of seasoned experts respond to listener queries, translate economic forecasts, and illuminate how the financial facts of recent years shape the big policy debates. Light-hearted moments and in-depth analysis balance to provide a clear-eyed, often sobering look at the forces shaping British prosperity.

Key Discussion Points & Insights

1. The Cost of Living Crisis (01:19–07:57)

Definition and Duration

• Ruth Curtis: "There's obviously no formal definition... [but] it was probably the end of 2021 to mid 2023." ([05:06])
• While prices have stabilized somewhat, they remain high after successive shocks, disproportionately affecting lower income families.

Wages vs. Inflation

• Helen Miller: "It looks like this Parliament will be the second worst parliament on record for living standards, after only the last parliament where living standards actually fell." ([05:49])
• Even modest wage growth beating inflation lags behind historical expectations, keeping standards of living stagnating or dropping.

2. Labour Market Data Woes & Employment Trends (06:12–07:57)

Uncertain Labour Market Data

• Helen Miller: "The ONS's Labour Force Survey has been struggling. People aren't filling it in to the same degree. So we know less than we would like to know." ([06:43])
• Unemployment is up (~5%), reflecting a weak (but not crisis-level) labour market.

New Data Approaches

• Ruth Curtis: "This isn't kind of mass firing, this is much more companies choosing not to hire... particularly strong in lower paid sectors like retail and hospitality." ([07:17])
• Young people are most affected by fewer low-paid job openings, partially due to higher minimum wages and recent tax changes.

3. Economic Growth in Context (07:57–09:33)

Understanding 1.5% Growth

• Helen Miller: "1.5 is bigger than we've seen recently, but smaller than historically... small differences in those small numbers cumulate over time to have a huge difference." ([08:20])
  • For example, a 2% vs. 1% growth rate, compounded over a decade, adds up to an 11% larger economy.

4. Government Spending, Borrowing, and the “Where’s All the Money?” Puzzle (09:33–14:09)

Rising State Spending

• Helen Miller: "Government spending as a share of national income is around 44%... the state actually is substantially bigger now than it was five years ago." ([09:56])
• Tax revenues are at a historic UK high, though not unusually high by international standards.

Debt Servicing’s Growing Slice

• Helen Miller: "We spend well over £100 billion now on servicing the national debt. If there were a department for servicing the national debt, it would be the second biggest... outside the NHS." ([11:04])
• Debt interest costs have soared (£65bn/yr more than a few years ago), squeezing public service budgets further.

Welfare and Health Spending

• Helen Miller: "Welfare spending is due to go from something like £300 billion... to £400 billion by the end of the decade." ([12:03])
• The rise is mostly in health and disability benefits and pensions, less so in other working-age benefits.
• Ruth Curtis: "The NHS... that's not surprising or unusual through time and with an aging and ailing population." ([12:53])
  • NHS spending and employment keep rising, now at 8% of the economy.

5. Inflation Game: Which Prices Rose the Most? (15:38–18:17)

A playful quiz underscores that "inflation" hides sharp differences, depending on what you buy:

• Wages: Up ~26.5% since mid-2021.
• Overall Inflation: Up ~25%.
• Treats (Chocolate, sweets): Up 47%.
• Vegetables: Up 37%.
• Appliances: Up 9% (a real-terms fall).
• Tap Water: Up 54%.
• Gas: Up 75%.

Key Point: "For those who are spending a lot on heating their homes, it's not going to feel like [inflation and wage rises balanced out] at all." ([18:17])

6. Tax Differences North and South of the Border: Scotland vs. Rest of UK (20:17–26:46)

• Scotland's devolved income tax system features more bands and higher rates for higher earners, but a slightly lower starter rate (19%).
• Median income and the 'Switching Point': While technically most Scots on lower incomes should pay less income tax (~£20/year) than in England and Wales, forecasts have sometimes understated median incomes. In 2023/24 and 2024/25, median incomes overshot the "switching point," so more than half actually paid more tax ([24:07]).
• Professor Mary Spurridge: "For 23/24 and 24/25 financial years, ... it is likely that the median has actually exceeded the level at which you pay more ... for those years, it's turned out not to be true." ([24:07])

Behavioural Response to High Rates

• Raising the top rate in Scotland: "90% of the revenues that you would get ... would be lost through behaviour." ([26:03])
  • Most of the expected increase evaporates as high-earners change their behaviour (e.g., spend less time in Scotland, arrange finances differently).

7. How Progressive is the UK Tax System? (27:34–29:49)

Comparing to Scandinavia & Europe

• John Burn-Murdoch: "The top earners in the UK... pay quite similar taxes by this measure [share of income] to people in Denmark or Norway. Whereas the average worker in the UK pays much lower tax than those in Scandinavian countries." ([27:34])
• In Sweden, Denmark, Norway: the tax "gap" between average and top is smaller—UK has the biggest jump between middle and top earners (16 percentage points).
  • "By this measure, the UK actually has the most progressive upward sloping income tax regime in the developed world." ([29:01])
• The conservative government implemented much of this progressivity, largely by benefiting the "broad middle" (lower taxes), while cutting public service spending and welfare for the poorest.

Burn-Murdoch: "The wider, broader section of the population... benefitted in terms of their taxes being reduced and those gains ... outweighing the losses from reduced benefits." ([29:30])

Notable Quotes

Cost of Living and Wages

• Ruth Curtis ([05:06]): "There's obviously no formal definition of what a cost of living crisis is... The real point is, prices don't fall after an inflation shock."
• Helen Miller ([05:49]): "This Parliament will be the second worst parliament on record for living standards..."

Public Spending & Debt

• Helen Miller ([11:04]): "We spend well over £100 billion now on servicing the national debt. If there were a department... it would be the second biggest."

Inflation Experience

• Tim Harford ([18:17]): "The experience of inflation is going to be very different. It all depends on what you buy."

Scotland’s Tax System

• Professor Mary Spurridge ([24:07]): "...for those years, it's turned out not to be true."
• Professor Mary Spurridge ([26:03]): "...when the very top rates in Scotland were increased... around 90% of the revenues... would be lost through behaviour."

Progressivity of UK Tax

• John Burn-Murdoch ([29:01]): "By this measure, the UK actually has the most progressive upward sloping income tax regime in the developed world."

Important Timestamps

• 01:19 – Introduction to the series; Tim Harford explains focus and format.
• 05:06 – Ruth Curtis details the (lack of a) formal definition of "cost of living crisis."
• 06:43 – Discussion of gaps in ONS labour market data and implications.
• 07:57 – Economic growth: is 1.5% a "big" number?
• 09:56 – Helen Miller on big picture of government spending and debt.
• 12:03 – Welfare and health spending breakdown.
• 15:38 – The "More or Less Inflation Game": a playful look at differential inflation.
• 20:17 – Deep dive into Scottish vs. UK income taxes, with Professor Mary Spurridge.
• 27:34 – John Burn-Murdoch on the true progressivity of UK tax compared internationally.
• 29:01 – "Most progressive upward sloping income tax regime in the developed world."
• 29:49 – Wrap up and teaser for the next episode on the NHS.

Memorable Moments & Tone

• Humorous banter about book promotion: "I've got ten books. No one's plugging my books. I wrote them myself..." (Tim Harford, [04:23])
• Game show interlude explaining price rises (lighthearted and relatable)
• Explainer clarity: Repeated emphasis on comparing small changes in growth rates and inflation over time ("small differences... can have really big effects")
• Balanced skepticism: Unafraid to challenge political claims (Scotland tax), always grounded in statistical evidence.

Conclusion

This episode of More or Less provides accessible, numbers-driven coverage of the key dynamics shaping the UK's economy at the start of 2026: the lasting legacy of inflation shocks, subdued wage growth, gappy employment data, new pressures on government spending, and the arcane art of tax design—especially north of the border. Through a blend of wit and expert insight, Harford and his guests illustrate how policymaking, perception, and cold hard numbers intertwine in Britain’s ongoing economic story.