Britain’s public finances are under enormous strain, and I often point out. Of the 132 billion pounds the UK government borrowed last year, no less than 110 billion was spent servicing the interest payments of pre-existing debt.
That’s one reason financial markets have recently pushed the UK’s 10-year sovereign borrowing costs above 5pc, easily the highest in the G7 – with longer-term gilt yields at a 30-year high.
Amidst talk of fiscal meltdown, Kemi Badenoch’s Conservatives are selling themselves as the party of fiscal responsibility – despite the national debt almost doubling as a share of GDP from 2010 under the Tories.
With Reform UK odds-on to win the next general election, the Conservatives accuse Nigel Farage’s party of playing fast and loose with the public finances.
The Tories have, traditionally, kept the public finances at least on an even heel, if not in surplus – after Labour has made a fiscal mess. That’s been the rough pattern of British politics over the last 60 years. And with the UK’s welfare bill soaring, it’s a reputation today’s Conservatives want to restore.
Welfare spending is set to balloon 19pc to £373 billion by the scheduled end of this Parliament in 2029. Within that, working age health and disability benefits will surge 30pc – to almost £100 billion. These are colossal sums.
The Tories are challenging the conventional wisdom – that trying to make welfare savings is electoral suicide. The party is now pledging to make a chunky £47 billion of savings per year, with £23 billion of that being slashed from the welfare bill.
The welfare savings are being championed by Helen Whately, Shadow Work and Pensions Secretary and, since 2015, MP for Faversham and Mid Kent.
Labour attempts to make welfare savings were last year firmly rejected by the party’s left-wing MPs. So are these Tory plans credible? Could the Conservatives control Britain’s runaway welfare spending.
That’s the question on this latest episode of When The Facts Change, with me Liam Halligan.
