Labour’s £15 Billion Black Hole That Nobody’s Talking About

Rachel Reeves has plunged Britain into a £15 billion financial black hole.

I know what you’re thinking. More black holes? Not another one?

I’m afraid so. After Labour parped to the treetops about a magical mystical £22 billion black hole, Rachel Reeves’s wand has accidentally conjured up another £15 billion black hole – conveniently just after her spring statement.

Even more conveniently, Reeves has whispered this hammer blow to Keir Starmer’s government whilst everybody is embroiled in a brutal argument over women’s and trans rights.

What’s the black hole this time?

The Labour government has borrowed almost £15 billion more than expected – bringing total government borrowing for the last financial year to an eye-watering £151.9 billion. That’s equivalent to £95,300 per household. Yikes.

We’re told that the black hole is down to government investment and spending decisions made by Reeves in her highly controversial autumn budget.

And this is where I come in.

Tax hikes – but debt has gone up?

I’ll ask a simple question. How have Labour overspent by £15 billion, when Rachel Reeves put up taxes by £40 billion in October – precisely to get the debt down?

It makes no sense.

Almost 1 million businesses up and down the country have been scrambling to pay Reeves’s higher Employer National Insurance tax.

First-time homebuyers have been landed with gargantuan stamp duty bills after Reeves dropped the starting threshold from properties worth £425,000 to £300,000. That means on a £425,000 house, first-time buyers will be forced to pay £6,205 in pure stamp duty – when before, they would have paid nothing.

Millions of pensioners were frozen out in the cold after Reeves took away their Winter Fuel Allowance – and now, 150,000 more pensioners will suffer cuts to Pension Credit.

Everywhere you look, it’s tax, tax, tax. When it comes to spending, it’s cut, cut, cut.

Taxes up. Spending cut. Let’s call that out for what it is – austerity. Ordinary people have been paying the price for that. And yet, despite squirrelling away all this extra dosh into the government’s coffers, Labour have still overborrowed by £15 billion.

We’re told that this is down to government investment and inflation. But we were also told that the £22 billion black hole was a present left by the outgoing Conservative government – until Laura Kuenssberg revealed that this fabricated pile of debt actually included Labour’s £9 billion pay rise for workers.

Will Reeves put taxes up again?

Yes.

It’s all so predictable that I can write you Rachel Reeves’s budget announcement right now.

Reeves will paint a torrid picture of Trump’s tariffs crashing round the world like a wrecking ball and claim she has no choice but to make more “difficult decisions” and, as a result of these “difficult decisions”, she’s made the “difficult decision” to increase taxes on businesses, which means “we’re not increasing taxes on working people” – except they are because businesses won’t be able to employ any “working people” without going bankrupt under a suffocating pile of Reeves’s tax hikes, leaving “working people” unemployed and consequently worse off.

There we are. I’ve just saved you another six months of worrying what Rachel Reeves might do next.

You might think I’m joking – but I’m not. It really is that predictable, owing to one simple fact.

Reeves’s fiscal rules will force up taxes – and bring down Britain

Rachel Reeves has wobbled the economy like jelly on a plate since she entered Number 11, but there’s one thing which she’s been concretely solid on – her fiscal rules.

Following Gordon Brown’s religion, Reeves’s golden rule is to match day-to-day government spending with income. Simply, tax revenue should fund spending – so borrowing should only be done to finance government investment.

The problem is this. Reeves has left the UK with no headroom. Out of a total budget of £1.2 trillion, Reeves left less than £10 billion as a buffer. When it comes to unforeseen events, like Trump’s tariffs, the UK has less room to manoeuvre than an elephant in a matchbox.

This means Reeves has no choice but to raise taxes. Reeves is already facing a backbench rebellion from Labour’s own MPs after slashing disability benefits for 3.2 million households. Cutting spending again would be political suicide.

So Reeves has no choice. Taxes must rise. And that means more immeasurable pain for businesses – because the other thing Labour have been rock steady on is not increasing income tax.

But as I’ve already said, a tax on business is a tax on working people. What Labour will never understand is money doesn’t grow on trees. Businesses make money and create jobs. So when you tax businesses, you’re taxing the jobs that put food on the table for working people because businesses cannot afford to hire people.

There we have it. It’s all billion-pound black holes under Labour. Taxes will go up again this autumn. Businesses will go bust. Labour are breaking Britain.

Image: Wikimedia Commons/HM Treasury (Kirsty O'Connor)

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