Britain’s surging debt curiosity invoice drives residing requirements ‘disaster’ as taxpayers decide up the tab, MPs informed
Britain’s surging debt interest bill has helped drive a ‘catastrophic’ squeeze on living standards as ‘almost all’ the burden is piled onto taxpayers, the head of a leading think-tank has warned.
Ruth Curtice, chief executive of the Resolution Foundation, told MPs that the ballooning cost of servicing the £3 trillion debt mountain had made us ‘much, much poorer as a country’.
Documents published alongside Chancellor John Healey’s Budget last week showed that bill is expected to rise to £155 billion in 2027-28, higher than the £153 billion earmarked for education and half as much again as the £98 billion expected to be spent on defence.
The bill is so high both because of the size of the debt and because Britain pays a higher rate of borrowing on international bond markets than any other major G7 economy.
And speaking to the Treasury select committee, Curtice explained how it was having a real impact on households as the government chooses to pile more taxes on to them rather than get to grips with public spending.
It comes after the Office for Budget Responsibility (OBR) last week said living standards would shrink over the next two years as energy prices soar while millions more are dragged into paying higher taxes.
Documents published alongside John Healey’s Budget showed debt interest soaring
Curtice told MPs the OBR outlook for living standards was ‘really catastrophic’.
She said it meant that in the 2020s they will grow only at a tenth of the rate they did in the 2010s.
Curtice explained that while both decades had seen ‘disappointing’ economic growth, more recent years had seen the pain piled onto households as the impact of higher taxes began to outweigh the generosity of benefits.
And even as household income has been squeezed, government spending has been increasing.
Curtice said that in some areas, such as higher spending on the NHS, that ‘might be something that voters are happy with’.
But she added: ‘The reason it feels so tough is that over two and a half percentage points of GDP has gone on higher debt interest spending.
‘That higher debt interest has meant we are much, much poorer as a country.
‘The choice that the government faces is the extent to which public services or households absorb that cost.
‘The reason we’ve seen these grim living standards forecasts through the 2020s is because they’ve chosen to ask households to bear almost all of that burden.’
