Labour’s Borrow-and-Spend Gamble

A long-term fiscal risk?

As the British government prepares to unveil its inaugural budget, the UK braces itself for the prospect of a borrowing spree and tax increases disguised as an economic growth policy, alongside more talk on the need for wealth redistribution. While this may offer the new government a fleeting boost in political popularity—particularly among its ideological base—the long-term consequences are blindingly obvious: spiralling public debt, crippling tax hikes on ordinary Britons, and an inevitable return to austerity that will hollow out essential public services. The pattern is clear: short-term political gains, long-term economic pain.

The government’s conviction that the UK can borrow its way to prosperity, without tackling deep-rooted structural deficiencies, is more than optimistic; it’s a dangerous misjudgment. Public debt has surged dramatically over the last decade or so, fuelled first by the 2008 financial crisis and later by pandemic-related spending. Today, the UK’s debt-to-GDP ratio sits at a staggering 100%, with a £2.8 trillion mountain of national debt. Rather than confronting the structural weaknesses that are holding back the economy, the government seems intent on doubling down on the very policies that have left the public finances so vulnerable.