The Office for Budget Responsibility (OBR) has published a report showing that unless something drastic changes, Government debt is set to almost triple in the next five decades — from around 100% of GDP today to around 274% in 2071. The timing of the report is surely not a coincidence: it overlaps with Keir Starmer’s government starting a harsh campaign of austerity which will include tax increases and cuts to key components of social spending, such as fuel support for pensioners.
But these latest numbers from the OBR give the lie to Labour’s claim that austerity is required in the short term to improve the health of the economy in the long term. With numbers like these, the Government is clearly preparing the British population for a permanent and potentially drastic reduction in living standards. That is, Labour is the first of probably many governments to lead Britain into a period of managed decline.
Among a range of problems, one that stands out is demographics. Birth rates have been below replacement level since 1973, meaning that Britain’s population is ageing, and this ageing is starting to bite. Ironically, the Baby Boomers and younger generations lowered their birth rates mainly so that they could work and consume more, thereby boosting the economy. But this is turning out to be a sugar rush that only lasted two generations: now Millennials and Generation Z have to deal with the consequences.