Now even Andy Burnham’s favourite think tank says Labour is building up a ‘mountain’ of debt to hand to the next generation
The Institute for Public Policy Research (IPPR), a think tank closely tied to Labour and reportedly favoured by Andy Burnham, has warned that the Government is building up a debt burden that will fall heavily on future generations. Its analysis found that debt interest could consume one in every £5 of tax revenue raised from those born over the next 15 years, dubbed "Generation Beta". The report matters because it comes from a think tank with significant influence in Labour circles, adding pressure on the party over its handling of the public finances ahead of the Budget.
IPPR's modelling suggests debt interest could account for 21% of government revenue by 2075 under a likely scenario, rising to as much as 47% in a worst-case outcome. The think tank stopped short of calling for looser borrowing rules now, saying ministers should stick to existing fiscal rules given the risk of higher borrowing costs, but urged Labour to develop a new fiscal framework in the next parliament, potentially allowing more long-term borrowing for projects such as climate resilience. Shadow chancellor Sir Mel Stride seized on the findings to criticise the Government's spending discipline, while a Treasury spokesman insisted the Chancellor and Prime Minister remain committed to meeting the fiscal rules and reducing debt.
- IPPR warns future generations face large debt-interest burden from current borrowing
- Debt interest could hit 21%-47% of revenue by 2075, IPPR models
- IPPR urges new fiscal framework next parliament, not immediate rule changes
New here? Start with this
Public debt is the money the government owes after borrowing over time to cover spending that is not met by tax income. Governments borrow through financial markets, and the cost of servicing that debt can affect how much money is available for public services, investment and tax changes.
Labour is the UK political party currently responsible for government policy, while Andy Burnham is Labour’s mayor of Greater Manchester and a prominent figure within the party. Think tanks are organisations that research and comment on public policy; their assessments can influence political debate, though they are not official government bodies.
Arguments about debt often centre on whether borrowing now supports economic growth and public investment, or creates costs for taxpayers in future. The issue matters because decisions on borrowing involve trade-offs between present spending, interest payments and the long-term condition of the public finances.