The Office for Budget Responsibility (OBR) has warned that government debt is on an “unsustainable and ever rising path”, with Britain needing to cut spending by £120 billion a year. Yet Prime Minister-in-waiting Andy Burnham is reportedly willing to waste £35 billion giving away the Chagos Islands military base, according to senior Foreign Office sources. This has led critics to label him “Starmer 2.0”.
OBR warns of unsustainable debt trajectory
The alarming OBR forecast came as Burnham and his team draw up their first budget for the autumn. The tax and spending watchdog made clear the Labour government is on a dangerous path, committing itself to excessive public expenditure while national debt stands close to £3 trillion – some 95% of total GDP. This could be pushed to 300% of GDP within 50 years if government expenditure continues on its current trajectory, with benefits, pensions and the NHS budget spiralling further out of control.
To avoid the country going bust, any Prime Minister needs to impose spending cuts or tax rises of £120 billion. However, just as this grim news was presented to the government, senior Foreign Office officials indicated that Burnham was happy to carry on with Starmer’s policy of giving away the Chagos Islands military base and paying through the nose for the privilege.
Chagos Islands deal irritates Trump
Not only did this irritate Donald Trump, but it symbolised a “weird anti-imperial project” aimed at appeasing the most anti-British sentiments of Attorney General Lord Hermer and other left-wing lawyers, according to commentators. As the project seemed to thankfully falter under American disapproval, it would have been simplest to shelve it under Burnham’s new regime, expressing a common-sense wish to get beyond such costly, vainglorious gestures. It would save billions of taxpayers’ pounds that could be redirected to more urgent concerns and win early brownie points in the White House.
But worryingly, the latest indications are that Burnham wants to press ahead with the whole unnecessary giveaway of British sovereign territory to Mauritius, an ally of China and Iran. If this proves to be so, it marks out Burnham as someone keen to shore up his support within Labour ranks at any cost – putting party before country.
Burnham's stance on Israel-Hamas war
Burnham has already strangely apologised for Starmer’s response to the Hamas-Israel war, saying he would have introduced tougher sanctions more quickly on the Jewish nation while paying lip service to October 7. Again, the purpose is to endear him to the hard-Left of the party, whatever the consequences for the relationship with Israel, a top security ally in the region.
It shows that despite having a huge majority in parliament, Burnham, like Starmer, fears his backbenchers. Yet again, we can expect the parliamentary tail to be wagging the Prime Ministerial dog. Not only does this infuriate key international players such as America and Israel, but it indicates a woeful misunderstanding of the economic peril we face.
OBR warns against relying on tax rises
And expecting taxpayers to dig us out of this hole is not advisable, says the OBR. “Using tax over the long term as your only lever to address the fiscal sustainability pressures that we identify is likely to create ever-increasing economic distortions and costs,” said OBR official Tom Josephs.
As Burnham’s favourite solution is taxing the rich, he was warned this could “negatively impact investment and because capital is generally much more internationally mobile than labour, the yield generated from higher capital taxes is more uncertain”. In simple terms, tax the rich and they will leave. Just last year, some 16,500 millionaires departed our shores, taking an estimated £70 billion that could have been invested in the nation and its businesses. This will only get worse if Burnham insists on sucking up to socialists within his party.
Burnham is too weak, too keen to ingratiate himself to his MPs, to make any of the hard choices needed to reverse national decline. Even when presented with an easy win by ditching the calamitous Chagos deal, he fluffs it. If this is a sign of the direction of travel for Burnham as PM, it’ll make the Starmer years seem like the calm before the storm.
