Rachel Reeves has put an expiry date on this Government

Labour is gambling the nation’s economy on an as-yet-unidentified miracle Daily Telegraph 10/12/25 Link It has been just over 17 years since Lehman Brothers collapsed, the defining event of the global financial crisis.

In the intervening years, it’s fair to say that no government has ever got to grips with the monumental impact of 2008 – which has led to a sense of stagnation in this country. Most of us feel poorer, compounded by a belief that nothing works as it should in “broken Britain” – all of which is supported by data. In fact, it was this narrative of decline that sparked the bust-up between Rachel Reeves and the Office for Budget Responsibility. Prior to her second Budget, the OBR downgraded the country’s productivity forecast, confirming that somehow things were even worse than we had thought. For almost two decades successive governments have limped from crisis to crisis, squandered opportunities to invest and presided over the immiseration of a nation with vague promises that “this time, we really have solved it”. Against such a backdrop, you might believe things can’t really get much worse. Alas, the Government has plans to blow your expectations out of the water for the 20th anniversary of the crisis that introduced “too big to fail” to the popular lexicon. Littered throughout the OBR’s report that accompanied the Budget – or, rather, preceded it – are references that allude to a hidden truth: Labour has gambled the nation on an as-yet-unidentified miracle. If this fails to emerge, the artifice will come crumbling down in 2028. It is the year in which everybody will really feel tangibly poorer, while councils and Downing Street will find their books no longer balance and attempt to fill their black holes in the only way they know how – yet more tax rises. Despite Reeves’s claims that she is an adherent of fiscal responsibility and marks a break from previous governments’ unfunded spending commitments, the Budget was filled with question marks. Chief among these is the solution to the rising cost of supporting children with special educational needs and disabilities, often referred to as the Send funding crisis. From 2028, the Government has said it will take on the entire £6.3bn (and rising) annual cost that had previously been foisted on local councils. However, as per the OBR, “no savings have been identified to offset the estimated £6bn pressure this will create”. This will result in one of two outcomes. Either, the Department for Education is forced to manage this through existing budgets, which the OBR predicts will result in a 4.9pc cut to already overstretched mainstream schools, or the taxpayer will once again pick up the tab. But, there is a more immediate issue that will arise in 2028, thanks to an accountancy trick called “statutory override”. Essentially, since 2020, local councils have been able to pretend they haven’t spent billions of pounds on Send provision by chalking up their overspend off balance sheets. But, that comes to an end in 2028, which means a likely £14bn bill comes due for local councils. Either the Government coughs up and covers this cost, or they let councils fend for themselves. If the latter is chosen, it has previously been predicted that around half of councils will be forced into their equivalent of bankruptcy – a section 114 notice. To resolve their debts, councils can either cut spending, raise council tax in excess of the 5pc cap or divert their investment budgets to cover day-to-day spending. Given they’re already in the process of flogging off assets, it’s reasonable to assume any quick fixes will be exhausted by then – meaning around half the country will see terrifying council tax rises. This comes in addition to the various tax increases that were unveiled at the Budget, which only come into force from, you guessed it, 2028. Alongside increased council tax, we will be able to enjoy the mansion tax, pay-per-mile fees for electric car drivers, and the extension of the stealth tax, and so on. But this is not the only unfunded spending the Government has slipped into the Budget. Digital ID cards will come at a cost of £1.8bn between now and 2028. Further NHS strikes and increased pharmaceutical spending are completely unaccounted for, despite the ten days of strikes in July and November costing £500m. New strikes have already been called for this month, so that’s £250m on the bill. Part of the Government’s budgeted savings come from £1.1bn banked on “the assumption that the Home Office will reduce small boat arrivals and end the use of hotels for asylum seekers by mid-2028”. However, the OBR predicts an additional cost of £1.4bn if there is no change. The biggest cost of all is also one of the Government’s proudest commitments. Boosting defence spending to 3.5pc of GDP by 2035 costs about £32bn, the OBR predicts, which is quite a lot of money unaccounted for. Don’t forget, all of this comes with the assumption that departments stick to their spending plans. If history is anything to go by, this fairytale will cost an additional £4.7bn in 2028. Of course, we can’t let a discussion of the nation’s finances go by without reference to the bond markets, who will be lending to a Government with a debt-to-GDP ratio of 97pc in 2028, the worst year of all in the OBR’s predictions. This is set to “stabilise” from the following year, but only if a “primary balance surplus” can be achieved. And based on the tens of billions we need to find behind the sofa, it’s safe to say this might be wishful thinking.