Mel Stride: If Labour carries on as it is, Britain will soon be drowning in debt

Sir Mel Stride is Shadow Chancellor of the Exchequer.

We have to face facts: we’re up to our necks in debt – and if Labour carries on as it is, we’ll soon be drowning in it. We Conservatives have to be the party sounding the alarm on our broken public finances.

I am convinced that not only is that our duty as conservatives, but it is also central to our message to the country. The public can increasingly see through Labour’s rhetoric: they instinctively understand there is no free lunch, and the Chancellor’s attempts to cosplay as a fiscal conservative look more comical by the day.

Rachel Reeves has completely lost control, spending money she doesn’t have – and there’s no plan to pay it back. That means yet more borrowing, more debt, and come the Autumn – more tax rises too.

She has the temerity to still peddle a fiction that she has fixed the public finances; that she had to raise taxes to plug a ‘black hole’. But the real black hole is not the one she invented, but the one she created. By the end of the decade, the deficit is now forecast to be more than double what was expected before Labour’s budget last year.

You may think the Chancellor has ramped up spending by a lot. But do you know by quite how much? Perhaps it’s tens of billions over the course of this parliament – maybe even £100bn?

What if I was to tell you it’s actually almost half a trillion pounds? Yes, trillion. And around half of that is being paid for with extra borrowing. Spending is due to be around £100bn higher per year come the end of the decade. So, who is going to pay for it? You, your children, and your children’s children. That’s who.

The truth is clear. Labour is addicted to borrowing. They think the public won’t notice. But the consequences are already here.

Debt interest is now costing taxpayers £100 billion a year – almost double the UK’s entire defence budget – and on Labour’s current trajectory, that bill is set to rise to £130 billion by the end of this Parliament. That means about a third of the money being raised from income tax will be wasted on debt interest, not paying for schools, hospitals or national defence.

What makes this worse is the deliberate attempt to cover it up. Reeves changed her fiscal rules last autumn, saying she was going to use a ‘different definition’ of debt (something she said when in Opposition that she wouldn’t do).

Conveniently, that change allowed her to borrow hundreds of billions more over this parliament while claiming her plans will eventually get debt falling. The head of the OBR, Richard Hughes, has said himself that the fiscal rule Labour are using “allows debt to keep rising”. The Chancellor is peddling a dangerous fiction.

The bond markets certainly aren’t fooled. Our borrowing costs are already among the highest in the developed world, higher than Italy, Spain, Portugal and Greece. And they will hardly have been reassured by the recent chaos, with Labour forced into humiliating u-turns first on Winter Fuel Payments and then on welfare reform.

That means even the numbers I’ve been quoting are an underestimate, because those forecasts from March included savings which Labour have proven themselves unable to make.

The verdict of the IMF in their recent report on the UK economy was clear: more government borrowing is not an option. The Chancellor has maxed out the national credit card. If she cannot rein in spending, tax rises look increasingly inevitable. After the Budget last year she claimed that was a one-off and she would not be coming back with more taxes.

Now ministers are refusing to rule out tax rises, including a further freeze on tax thresholds – which Reeves said at the Budget she would not do because it would ‘hurt working people’. We also know, courtesy of a leaked memo, that Angela Rayner is pushing an entire menu of tax rises to pay for Labour’s profligacy. All of this means businesses and families bracing themselves for an even higher tax burden, dampening confidence still further.

People across Britain are making hard choices every day. They expect their government to do the same. But under Labour, short-term political convenience is winning over long-term responsibility.

Britain cannot afford to keep going down this road. Under Kemi Badenoch’s leadership, the Conservatives are committed to sound public finances, lower taxes, and fully costed plans. We won’t make promises we can’t afford, and we will always treat taxpayers’ money with respect.

Labour’s “spend now, tax later” approach is short sighted and dangerous. We simply cannot afford to go on like this. It is leaving us vulnerable, weaker and poorer.