As the UK prepares for the budget<\/a> announcement, familiar debates are taking shape. Should Chancellor Rachel Reeves<\/a> cut welfare spending? Or reform the \u201ctriple lock\u201d on state pensions<\/a>?<\/p>\n Other debates focus on revenue: how should she raise money without breaking Labour\u2019s manifesto promise not to increase taxes on working people<\/a>? <\/p>\n But these discussions are being held in a strange vacuum, where the three enormous expenditures that led the UK to this point are not mentioned.<\/p>\n COVID debt<\/a>, energy support schemes<\/a> and Brexit<\/a> have fundamentally shaped the UK\u2019s financial woes. Yet voters and politicians alike seem determined not to talk about them. <\/p>\n Instead, they\u2019re treated as shocks imposed on the country, although they involved hugely consequential political choices.<\/p>\n Gloomy vibes accompany this Advent budget, and Britain\u2019s awkward collective amnesia is preventing the country from learning the lessons needed for future crises and from talking honestly about the best route forward.<\/p>\n open image in gallery<\/p>\n Chancellor Rachel Reeves will outline her next Budget in the Commons on 26 November (PA Archive)<\/p>\n The ghost of COVID past<\/p>\n The COVID pandemic required unprecedented government intervention. Between 2020 and 2022, the UK\u2019s spending watchdog, the Office for Budget Responsibility estimates, support measures totalled \u00a3169 billion or 7 per cent of UK GDP. Most of it (\u00a3100 billion) went on direct support for things like the furlough scheme.<\/p>\n In hindsight, the vaccine roll-out<\/a> was one key moment when the country showed its ability to deliver on a massive scale. Some other decisions were less glorious.<\/p>\n There was a general lack of transparency in the purchase of health equipment during the first wave of the pandemic, and the Eat Out to Help Out scheme to support hospitality led to a further increase in infections<\/a>.<\/p>\n But there is very little discussion of the most important, unanswered questions. Despite a long inquiry examining government failings<\/a>, there has been no debate about how much risk we as a country are willing to take, and how much we are willing to pay in order to reduce that risk.<\/p>\n COVID support schemes increased public debt from 80.4 per cent of GDP in 2018 to 107.4 per cent in 2021. The government paid close to zero interest on the debt at the time.<\/p>\n But now, higher interest rates make it a huge burden on taxpayers. Debt interest spending is higher than the budget for education, more than twice as big as it was in 2018. This is why Reeves now appears so determined to bring down UK debt levels.<\/p>\n We also know the cost lockdowns put on schoolchildren. But we know very little about the cost of doing less, or the current choice to stop vaccinating people.<\/p>\n Perhaps the main hit on UK budget capacity comes from a global pandemic, something that will happen again in the future. The focus is on putting the finances back on track without discussing how to manage similar trade-offs next time.<\/p>\n The ghost of our present energy transition<\/p>\n When Russia invaded Ukraine<\/a> and energy prices spiked, the UK faced a choice: reduce demand or subsidise consumption. It chose the latter. The government stepped in with massive support packages to pay people\u2019s energy bills. This cost \u00a378.2 billion, or more than 4 per cent of GDP (compared to less than 3 per cent on average in Europe).<\/p>\n About the author<\/p>\n Renaud Foucart is a Senior Lecturer in Economics at Lancaster University Management School, Lancaster University.<\/p>\n This article was first published by The Conversation<\/a> and is republished under a Creative Commons licence. Read the original article<\/a><\/p>\n There were strong arguments for this approach. Allowing fuel poverty to spike during a cost-of-living crisis would have been terrible, and there was little time to target the policy. But to be clear about what happened: the public was given huge handouts to avoid having to change lifestyles, technology or consumption patterns.<\/p>\n This happened in the middle of an energy transition. The goal, ostensibly, is to decarbonise, reduce dependence to fossil fuels from dictators, and to modernise infrastructure.<\/p>\n These are complex decisions that require public support, some level of sacrifice, but also a clear collective commitment that change is inescapable. But this is not how the country is approaching these challenges, having just demonstrated that when energy costs rise the government will step in.<\/p>\n Just like COVID debt, UK taxpayers carry the cost of energy support debt while sweeping the decisions that caused it under the rug.<\/p>\n The ghost of Brexit yet to be<\/p>\n The UK\u2019s relationship to Brexit<\/a> appears more confused than ever. Only 11 per cent of British adults think Brexit is more a success than a failure, and 56 per cent would vote to rejoin the EU. Yet many tout Reform UK leader Nigel Farage as the frontrunner<\/a> to be the next prime minister while also blaming him (among others) for Brexit\u2019s failures.<\/p>\n open image in gallery<\/p>\n Nigel Farage\u2019s popularity is soaring (Getty Images)<\/p>\n This may be because Brexit has largely disappeared from the public\u2019s radar, as Prime Minister Keir Starmer starts to move towards more integration with the EU.<\/p>\n Conversations on the topic tend to do everything to avoid reopening old wounds. But economists are slowly realising the full extent of the damage caused to the economy. An unprecedented comprehensive study relying on comparisons with other nations and also on detailed data from Bank of England business surveys estimates that Brexit has reduced UK GDP by 6 per cent to 8 per cent. These figures were at the most pessimistic end of the estimates at the time of the referendum.<\/p>\n To put this into perspective, with UK tax receipts at 40 per cent of GDP, a GDP that was 7 per cent higher would give \u00a377 billion extra a year to the chancellor. This is more than half of the 2024-25 budget deficit of \u00a3137 billion.<\/p>\n![\"Chancellor](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/11\/afab8c7bffdd3d2fd0ad9c498c5bb685Y29udGVudHNlYXJjaGFwaSwxNzU3MDgzNTY5-2.78024140.jpg\")
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