As Chancellor Rachel Reeves prepares to deliver her crucial budget announcement, the UK finds itself grappling with familiar debates about welfare spending and pension reforms. Yet these discussions are occurring in a curious vacuum, ignoring the three enormous financial burdens that fundamentally shaped Britain's current economic predicament.
The Unspoken Financial Burdens
According to economic analysis from Renaud Foucart of Lancaster University, three critical issues have been largely excluded from public discourse despite their monumental impact on the Treasury. COVID pandemic response costs, energy support schemes, and Brexit consequences represent the spectral forces haunting Britain's fiscal landscape, yet politicians and voters alike seem determined not to confront them directly.
The budget, scheduled for announcement on Wednesday 26 November 2025, comes amid gloomy economic forecasts and what appears to be Britain's collective amnesia about the political choices that led to current financial constraints.
The Ghost of COVID Past
The pandemic required unprecedented government intervention that continues to shape fiscal policy. Between 2020 and 2022, the Office for Budget Responsibility estimates support measures totalled £169 billion or 7% of UK GDP, with approximately £100 billion allocated to direct support including the furlough scheme.
While the vaccine rollout demonstrated national capability for large-scale delivery, other decisions proved less successful. The lack of transparency in health equipment purchases and the controversial Eat Out to Help Out scheme that increased infections have been examined, but crucial questions remain unanswered.
The most significant legacy appears in debt statistics: public debt surged from 80.4% of GDP in 2018 to 107.4% in 2021. Initially carrying minimal interest, this debt now represents a substantial burden under higher interest rates, with debt interest spending exceeding the education budget and more than doubling since 2018.
This explains Chancellor Reeves' determination to reduce UK debt levels, yet the conversation avoids discussing how Britain will manage similar trade-offs during future pandemics.
The Ghost of Energy Transition Present
When Russia invaded Ukraine and triggered energy price spikes, Britain faced a critical choice between reducing demand or subsidising consumption. The government opted for the latter approach, implementing massive support packages for energy bills that cost £78.2 billion, exceeding 4% of GDP compared to less than 3% on average in Europe.
While preventing fuel poverty during a cost-of-living crisis presented strong justification, the policy essentially provided substantial public handouts to avoid necessitating lifestyle changes or consumption pattern adjustments. This occurred amid an ongoing energy transition supposedly aimed at decarbonisation, reducing dependence on fossil fuels from authoritarian regimes, and modernising infrastructure.
The approach demonstrated that when energy costs rise significantly, the government will intervene substantially, potentially undermining the collective commitment and sacrifice required for successful energy transition.
The Ghost of Brexit Future
Britain's relationship with Brexit remains profoundly confused according to recent analysis. Only 11% of British adults consider Brexit more successful than unsuccessful, while 56% would vote to rejoin the EU. Paradoxically, Reform UK leader Nigel Farage, widely associated with Brexit's implementation, is touted as a potential future prime minister.
Economic assessments now reveal the full extent of damage, with comprehensive studies comparing the UK to other nations and analysing Bank of England business surveys estimating that Brexit has reduced UK GDP by 6% to 8%. These figures represent the most pessimistic predictions during the referendum period.
To contextualise this impact, with UK tax receipts at 40% of GDP, a 7% higher GDP would provide approximately £77 billion additional annual revenue for the Treasury—more than half of the 2024-25 budget deficit of £137 billion.
Despite this substantial economic cost, Britain has secured no massive US trade deal nor developed significant alternatives to EU partnerships, paying a hefty price for one of the hardest possible Brexit versions without defining what economic benefits this approach might eventually yield.
Confronting Britain's Fiscal Phantoms
These three financial ghosts—COVID debt, energy support costs, and Brexit-related economic damage—will inevitably haunt Chancellor Reeves' budget decisions. Britain cannot adequately prepare for future pandemics without learning from COVID management approaches, nor complete its energy transition without confronting cost distribution questions for energy security.
Similarly, developing a coherent economic strategy requires honest assessment of Brexit's consequences and potential remedies. Until the nation confronts these fundamental issues, budget discussions will remain confined to minor austerity measures while hoping for improbable financial miracles.
