The Office for Budget Responsibility had no idea of the scale of the crisis Reeves was about to unleash. In March 2023, more than a year before Labour took office, it forecast borrowing of roughly £85billion for 2024/25. Thanks to Reeves, the actual figure exploded to £151billion. That’s an extra £66billion above the forecast amount, in a single year.
In March 2024, again, before Reeves took charge, the OBR innocently forecast borrowing of £87billion for 2025/26. In practice, Reeves borrowed around £152billion. That’s £65billion more than the OBR thought likely (or even humanly possible). In just two years, Reeves borrowed roughly £131billion more than the country’s official forecaster expected. It adds up to £303billion in total, all added to the national debt. These are astonishing sums. I think it’s fair to say she’s gone loopy.
I don’t blame the OBR. It made those projections in good faith before any of us understood the sheer scale of the fiscal wrecking ball Reeves was about to swing. Voters didn’t see it coming either. If they had, Labour would never have got anywhere near office. And that isn’t even the worst part.
All those extra taxes we pay have done nothing to mend that black hole. Instead of closing the deficit, they’ve blown it wide open. Labour will tax all it can but never grasps that actions have consequences in the real economy. Investment falls. Growth weakens. Jobs disappear. Deficits rise. National debt climbs. Bond yields surge and borrowing costs spiral.
Yet Reeves laughably insists her “plan is working” and she’s “restored stability”. There’s no plan, and no stability. How can she keep a straight face while feeding us these whoppers?
Incredibly, she’s set to borrow another £149billion this year. Yet Labour MPs are still trying to bring in Andy Burnham to spend even more. The Treasury constantly blames the Iran war but governments always face external shocks. The Conservatives had to cope with Covid and the Ukraine energy crisis. I don’t recall Reeves cutting them any slack.
She’s lost all control. Regardless of who replaces her as Labour chancellor, our economic death spiral will accelerate. I dread to think how big the black hole will be by the time Labour is done.