Britain's national debt may be as high as £12 trillion, a figure significantly larger than the £3 trillion recently reported, according to an analysis by the Taxpayers' Alliance (TPA).
The TPA asserts that the widely reported £3 trillion public sector debt figure does not account for substantial hidden liabilities. These include unfunded state and public sector pension commitments, Private Finance Initiative (PFI) contracts, and nuclear clean-up costs, which the group estimates add an additional £8.6 trillion.
Based on this calculation, the TPA suggests the true national debt stands at £11.7 trillion. This equates to approximately £168,184 for every person in the United Kingdom. The campaign group's analysis indicates that even with hourly payments of £1 million, it would take 1,334 years to clear this debt.
Shadow Chancellor Mel Stride commented on the findings, stating, "Every pound borrowed today is largely taxation deferred and will have to be paid off further down the line." He urged the Chancellor to consider the implications of the debt passed on to future generations.
Chancellor John Healey is scheduled to present his first budget on October 28, with a stated priority of fiscal discipline. John O'Connell, chief executive of the TPA, emphasized the need for the new Chancellor to curb these commitments to protect future taxpayers.
The rising national debt also presents challenges for Prime Minister Andy Burnham's administration, which has announced new spending initiatives such as scrapping VAT on energy bills, cutting business rates for pubs, and capping bus fares.
Prime Minister Burnham had previously pledged to adhere to fiscal rules set by Rachel Reeves but also indicated a desire to use flexibility for spending, potentially by offsetting borrowing against investments. This approach could allow for an additional £9 billion in annual borrowing while remaining within the existing fiscal framework.
However, such measures are expected to increase the national debt and the government's interest bill, which the Office for Budget Responsibility projects will exceed £130 billion this year.
The financial markets are reportedly monitoring the government's commitment to fiscal discipline. Rathbones, a City money manager, disclosed in July that it had divested some of its UK government debt, citing concerns that Prime Minister Burnham might deviate from fiscal prudence to fund policy objectives, a move that could potentially mirror the market instability caused by former Prime Minister Liz Truss's 2022 mini-budget.