Rachel Reeves is burning through billions – your tax bill will explode | Personal Finance | Finance

I hate to sound melodramatic, but that’s just how it is. The Treasury has lost control of spending, and there’s only one way this can end.

Don’t believe me? Look at the numbers.

Our national debt is nudging £3trillion, roughly 100% of annual GDP. In practice, it’s close to £4.8trillion if you include unfunded liabilities like state and public sector pensions.

Before the 2008 financial crisis, it was just 40% of GDP.

So it’s rocketed since and yes, the Tories racked up most of it – despite supposedly being the party of austerity.

One Conservative Chancellor after another promised to close the deficit and start paying it down, but never did.

Now Rachel Reeves is set to do the same.

In April alone, she added another £20.2billion to the debt pile, more than even the gloomiest forecasts. Over the 2024/25 financial year as a whole, she borrowed £148billion. Again, more than expected.

And she’s only just getting started.

In her last Budget, Reeves hiked taxes by £40billion and borrowed another £30billion to boost public services.

You’d think the Labour left would be happy with the splurge, but they’re not. They’re furious because she’s not taxing and spending enough.

Activists are in open revolt over government plans to trim £3.5billion from the spiralling disability benefits bill.

They also want Reeves to scrap the two-child benefit cap, a move that could cost up to £2.5billion a year.

They don’t care about our spiralling debt and deficit. They think taxing the rich can cover it all.

And Reeves will try. Experts say she’ll return in the autumn Budget with another £30billion tax grab.

There’s a problem, though. The tax burden is already at a 70-year high, dragging on growth as households spend less and businesses cut investment.

The super-wealthy are globally mobile and more may leave. Her tax raids won’t even begin to cut the deficit.

Labour activists also want more borrowing, but that door is closing.

UK borrowing costs are now the highest in the Western world with gilt yields shooting past financial crisis highs. Markets can see the mess we’re in and are charging us more to lend.

We already pay a staggering £9billion a month purely on servicing our debt – that’s more than £100billion a year down the pan.

The deficit will only widen as PM Keir Starmer reverses benefit cuts to head off Nigel Farage and Reform UK.

Farage has caught the spending bug. He now wants to reverse the winter fuel payment cut and scrap the two-child benefit cap, but isn’t clear on how to pay for it.

The Tories didn’t care when they were in power – so why should we care what they say now?

We’re trapped in a debt spiral, and nobody has the guts to plot a way out.

How does it end? Some say the UK can’t go bust. We can always just print more money.

Maybe. But last time we were in this state – 1976, again under Labour – we begged the IMF for a loan and had to accept brutal spending cuts in return.

It was a national humiliation. And we’re on our way there again.