New Chancellor John Healey is facing criticism over reports that he plans to adjust fiscal rules to allow for billions more in borrowing, just as the UK's national debt has surpassed £3 trillion for the first time in history.
Debt Milestone and Borrowing Concerns
The TaxPayers' Alliance has calculated that the government is borrowing £4,270 every second, amounting to £369 million a day. The Resolution Foundation has previously warned that public finances are on a "deeply unsustainable path".
It took over 300 years for the national debt to reach £1 trillion in 2010, then just 10 years to add the next trillion, and only six years for the most recent trillion.
Proposed Fiscal Rule Changes
Healey is reportedly considering allowing spending on infrastructure or equity in companies to be counted as "assets" to offset borrowing costs—a move critics describe as an accounting fix. This could raise an additional £9 billion a year for Labour's infrastructure pledges.
The Institute for Government estimates that Labour's policy measures since the 2024 election will cost between £70 billion and £80 billion a year in extra spending by the end of the decade.
Comparison to Predecessor
Rachel Reeves had previously rewritten the Treasury's fiscal framework to create headroom for borrowing, but she did not fully utilize it. Healey is now preparing to go further, despite inheriting those rules from Reeves.
Critics argue that borrowing to invest is risky, especially as interest rates rise, and that politicians may leave the debt for future governments to handle.
