Andy Burnham has been cautioned about a potential sharp increase in the UK’s national debt. The Office for Budget Responsibility, the government’s fiscal watchdog, has stated that the country’s public finances are on an unsustainable and continually rising trajectory.

Currently, the UK’s national debt amounts to nearly £3 trillion, approximately 100% of its gross domestic product (GDP). The OBR’s latest report warns that this figure could skyrocket to 300% over the next five decades, totaling around £9 trillion in today’s valuation.

The OBR’s various scenarios all indicate that the public finances are heading towards an unsustainable path, with projections suggesting that debt will grow significantly in the future. These concerning forecasts coincide with Andy Burnham’s impending assumption of the Prime Minister position from Keir Starmer, with addressing the escalating debt and public sector borrowing ranking high among the economic challenges.

The OBR highlighted factors such as an aging population and a surge in healthcare expenditure as mounting pressure on the UK’s already strained public finances in the coming half-century. The report projects that the UK population will peak at approximately 73 million by 2050 before starting to decline. Healthcare spending is expected to climb from 8% of the economy in 2030/31 to 13% by 2075.

Additionally, the commitment to the triple lock pledge, which guarantees increasing the state pension based on average earnings, inflation, or 2.5%, has proven to be more costly than initially anticipated due to volatile inflation trends over the past two decades. Projections also indicate a rise in adult social care costs from 1.2% of GDP in 2030/31 to 1.8% by 2075/76, aligning with the growth rate in healthcare spending.

While government expenditure is projected to increase, a significant tax revenue source is expected to diminish due to the planned transition from petrol and diesel cars to electric vehicles. This shift will lead to a decline in income from fuel duty, dropping from 1.6% of GDP to 0.5% in the next five decades.

William Ellis, a senior economist at IPPR, emphasized the importance of maintaining sound public finances for long-term sustainability, urging the government, and potentially Andy Burnham as the new Prime Minister, to prioritize fiscal responsibility over the next fifty years. Ellis highlighted challenges such as aging demographics, climate change, and weak productivity as long-term factors impacting public finances, suggesting a reassessment of fiscal rules to address these enduring challenges.