Andy Burnham will be all smiles this morning as he uses his victory in the Makerfield by-election to muscle Sir Keir Starmer out of Number 10. But he won’t be happy when he sees today’s borrowing figures, which reveal the disastrous state of the public finances after nearly two years of Labour. Reeves borrowed a shattering £23.3billion in May, far more than forecast. That’s the highest May figure on record, with the sole exception of the Covid pandemic. And it comes at a time when the national debt is almost £3trillion. The more I look at today’s numbers, the worse they get. Especially for Burnham.
The King of the North is flying high today but could swiftly find himself just as unpopular as the current PM. In the 2024 general election, Starmer was swept to power on a wave of anger at the Tories, who left a dire economic legacy for Chancellor Rachel Reeves. Unfortunately, almost everything she’s done in power has only made it worse. And she’s about to heap an even more disastrous legacy onto Burnham’s shoulders than the one she inherited. It could sink him, almost before he’s begun.
In May 2025, Reeves borrowed £17.9billion. This year she somehow managed to borrow £5.4billion more, despite repeatedly claiming she’s restored stability to the public finances. Much of that money isn’t even funding new services. In May, Britain spent £11.7billion servicing the national debt. Let’s put that into perspective. The Government is struggling to find £28billion for defence. That’s equivalent to little more than two months of debt interest payments.
Much of our £3trillion debt was accumulated under Gordon Brown and successive Tory chancellors. The Iran war has also made life harder for Reeves, but that pales compared to the impact of the 2008 financial crisis and Covid in 2020. Reeves has conspicuously failed to bring the deficit under control, despite hitting taxpayers with roughly £70billion a year in extra taxes. She’s now on course to borrow another £140billion this year, possibly more.
Reeves is spending heavily on debt interest, public services, investment projects and welfare. That’s a major blow for Burnham because he was hoping to do exactly the same, only on a more heroic scale. He’s been tossing out expensive pledges throughout his leadership bid, from nationalisation to social care to compensation for Waspi women. He’s also talked about wealth taxes, higher council tax, a new land tax and raid on inheritances.
In a moment of economic madness, he foolishly suggested Labour needed to “get beyond this thing of being in hock to the bond markets”. There’s only one way to achieve that. Stop borrowing so much money from them. But if Burnham is to fulfill even half of his promises, and keep Labour MPs happy, he will have to borrow more.
Once in power, Burnham is expected to sack Reeves. The most likely replacement is Ed Miliband. That should terrify everyone. His net zero charge is destroying jobs and deindustrialising Britain, driving up our energy bills. If Red Ed was given the whole UK economy to play with, it could end in catastrophe.
Bond investors are already nervous about the prospect of a Burnham government pursuing even more spending and borrowing. If they lose confidence, the cost of servicing Britain’s mountain of debt will climb even further. Burnham is a likeable bloke who likes to be liked. Rachel Reeves probably isn’t so keen, but she’ll leave behind a nasty parting shot. Her economic legacy will torpedo Burnham on day one. Hopefully it will sink the good ship Miliband too.