This article will look at what the new Budget has to say about projected Net Zero-related costs.
But first, a quick look at the fundamental numbers. You rarely see these spelt out in black and white by the media. They seem to be more interested in the minutiae of tax changes and political point scoring, consequently missing the bigger picture. This is, of course, exactly the sort of deflection the Chancellor wants.
You will hear a lot about ‘fiscal headroom’. I hate that term. It means that the Government can afford to spend and borrow more money. It is a dangerous fallacy. The UK is effectively broke and should be cutting spending, not increasing it.
I have prepared this very simple graph, comparing Public Borrowing forecasts at each of the last three budgets, using the data from the OBR:
Two things stand out like a sore thumb:
At each Budget, public sector borrowing was projected to steadily decline, year by year.
Each Budget consistently projected higher borrowing than the one before, certainly in cumulative terms.
Somehow, it was always jam tomorrow. But tomorrow never comes. The pot of gold is always just over the rainbow.
I recall George Osborne pulling the same tricks years ago. Don’t worry about the next year or two – everything would miraculously come right in the end – just don’t ask me how!
Just let these two numbers sink in. Two years ago in her first Budget, Rachel Reeves forecast borrowing of £336 billion between 2025-26 and 2028-29.
That figure has now risen to £478 billion – 42% more.
Does anybody still believe in jam tomorrow? If so, I have a bridge to sell them.
