Britain might be heading towards a new PM, but whoever walks into Number 10 will still be staring at the same mess as the current one.
Andy Burnham is set to wake up in a strong position after his Makerfield by-election win, using it to ramp up pressure on Keir Starmer. But the reality waiting for him is far less comfortable once he sees today’s borrowing figures, which lay bare just how stretched the public finances have become after nearly two years of Labour rule.
Rachel Reeves borrowed £23.3 billion in May alone — way above expectations and the highest May figure on record outside the Covid years. At the same time, national debt is edging close to £3 trillion. Strip it all back, and the numbers just keep getting uglier, especially if you’re Burnham looking in.
He’s riding high now, but the “King of the North” could quickly find himself dealing with the same unpopularity problem as the man he’s trying to replace. Starmer came into office on a wave of anger at the Conservatives, but instead of fixing things, the economic situation has only tightened. And now Reeves looks set to leave behind an even heavier burden for Burnham than the one she inherited herself — one that could drag him down almost immediately.
Back in May 2025, borrowing stood at £17.9 billion. A year later it’s £5.4 billion higher, despite repeated claims that stability has been restored. Meanwhile, tax receipts are at record levels — £154 billion in May, up £9.8 billion year-on-year — yet the state is still leaning heavily on debt just to keep going.
A huge chunk of that money isn’t even going into new services. Around £11.7 billion in May went straight on servicing debt interest. In plain terms, a growing share of borrowing is just paying the interest on what’s already been borrowed. That’s not a comfortable loop for any government to be stuck in.
Most of the UK’s £3 trillion debt comes from earlier eras — Gordon Brown’s time and successive Conservative chancellors — shaped by crises like the financial crash and Covid. But Reeves is still under pressure, with little sign the deficit is coming under control despite higher taxation. Overall borrowing is still on track to hit around £140 billion this year, possibly more.
For Burnham, that’s a serious problem. Reeves is already spending heavily on debt interest, public services, investment and welfare — and he’s been promising to do much the same, only on a bigger scale. His pitch has included nationalisation, social care expansion, WASPI compensation, and new wealth-style taxes on council tax, land, and inheritance.
At one point, he even argued Labour should move “beyond being in hock to the bond markets” — but the only real way to do that is simple: borrow less. Otherwise, the maths doesn’t add up.
If he takes power, Burnham is expected to move Reeves aside, with Ed Miliband often tipped as a possible replacement. For some, that’s hardly reassuring, given his strong push on net zero policies that critics say are damaging industry and jobs.
Markets are already watching closely. Gilt yields are ticking up, and investors are clearly uneasy about where things are heading. If confidence slips further, borrowing costs rise — and the debt problem gets even harder to contain.
Burnham may be popular for now, but Reeves looks set to hand him a fiscal reality check on day one. And in that environment, even a Miliband-led economic direction could find itself under serious pressure.
