Published on 28th May 2025

This is the full version of the fourth paper in my Global Britain series on the UK’s public finances, entitled ‘Borrowing for investment’ – what signs we have of how this will manifest itself under the current Labour regime’.

You can download it through this link.

All indicators point to Labour using the financial templates from New Labour’s ‘Private Finance Initiative’ and the EU’s InvestEU to fund both the Net Zero transition and the rest of our ‘decade of national renewal’ – at colossal cost to the UK.

These templates are examples of high-leverage financing with the majority of the funds being expensive debt. Even the ‘equity’, if it comes through Great British Energy and/or the National Wealth Fund, has been borrowed by Labour under the heading of ‘borrowing for investment’.

This adds up to high financing costs for Labour’s schemes, which will translate into high usage charges and taxes for decades to come: just look at New Labour’s ‘Private Finance Initiative’ – £50 billion of capital cost translating into £278 billion of total cost.

Most of the debt is submerged, as Shadow Debt, but it will weigh on businesses and individuals for decades. If New Labour’s ‘Private Finance Initiative’ is repeated and in respect of the £50 billion per annum that the Climate Change Committee’s Seventh Carbon Budget says needs investing in Net Zero by 2050, the total cost could be £7 trillion.

It is amazing – and questionable – that the Climate Change Committee has not factored these costs into its so-called ‘budget’.