Are there any politicians who will accept they are bankrupting the country?

Labour backbenchers – and even some cabinet members – are already lining up to say there can be no departmental cuts by the chancellor to balance the books.

Do any of these people actually understand how dire the state of the public finances actually is?

Has no one read the Office of Budget Responsibility (OBR) report titled “Fiscal Risks and Sustainability” published in September? The OBR sees the structural growth of the state –growing to Soviet levels of 60 per cent of the economy over the next 50 years, built upon a National Debt which on any measure will become unsustainable fairly quickly, with or without the “economic shocks” the OBR has allowed for.

It is easy to dismiss the report as merely presenting projections, which is true, but with spending on pensions, welfare, NHS and debt repayment all being in structural growth the contributory factors to the OBR projections need to be addressed.

In a pre-budget paper published today by the think tank Global Britain, Scottish economist Ewen Stewart seeks to explain why the OBR report has done us all a favour by highlighting the road to catastrophe that our ruling parties have taken us down.

Stewart highlights how the UK private sector has gone from being almost two thirds of the UK economy in 2000 to almost half of it today. While taxes have in most years been rising under all governments and are now at a 70-year high, public sector indebtedness has also grown, having tripled in real terms in 20 years – from £395bn in 2000 to £2,770bn now – enduring the biggest peacetime increase in debt on record.

While some politicians such as George Osborne sold their economic policy as austerity to present the narrative they were being tough in dealing with an economic emergency inherited from the previous Labour government (who pointed to the global financial crisis as the primary contributing factor) – the reality was that public sector spending continued to grow. Yes, some departments and some benefits faced budget cuts but the trend was towards spending growth – just not as fast as before.

Notice how Labour is now spinning its own narrative that it too needs to resolve an economic emergency caused by the Tories (who themselves also point to global events such as the Covid pandemic and war in Ukraine as contributing factors). Yet when Stewart considered the UK’s position against other western nations he found the UK to be in a relatively worse state, with countries such as Australia becoming far more prosperous over the same period. The reason, Stewart argues, is that while ‘Black Swan events’ had global impacts the responses were generally national – creating different outcomes.

The UK response was generally to spend more to alleviate the pain, centralise government controls and regulate to a far greater extent than most other countries. The result, as a matter of public record, is the UK experiencing a greater deterioration in its public finances than any European nation bar Greece since 1997.

We can expect Chancellor Rachel Reeves to claim she has no alternative but to break promises made in the general election in an effort to repair the public finances – resulting in tax increases and additional borrowing which will be finessed so that the markets do not panic. All of this will be blamed upon the previous Conservative administration.

Nevertheless the trajectory of ever greater spending without the economic growth to support it has been the policy of all major parties in government, be it Labour, a Conservative-Liberal Democrat coalition, or the Conservatives on their own.

On the sidelines the SNP and Plaid Cymru have been willing supplicants happy to take the Barnett consequentials that grow the Scottish and Welsh block grants, while the fantasy economics of the Green parties simply make everyone else look respectably moderate.

Ewen Stewart argues the good news is the UK economy is still saveable, but only just. The first step will be for our politicians to be honest about the challenges ahead and be prepared to radically change direction instead of blaming each other but all doing the same.

That will not be the ‘change’ Labour is going to announce. Rachel Reeves will be a continuity Chancellor; growing public expenditure, increasing taxes and running up the debt burden our grandchildren will have to pay for. The interest on public debt is now larger than UK spending on defence and almost the same as education.

In 2023/24, social welfare accounted for £361 billion, health £221bn, education £112bn – and public sector debt interest came in just behind at £102bn. In comparison defence was just over half that at £54.2bn.

The tax rises that are likely to be introduced; on national insurance, capital gains, fuel duty, pension allowances, council taxes and more – will all reduce economic growth and likely lead to lower revenues than the Chancellor’s modelling will claim. Our politicians in London or Edinburgh always underestimate the behavioural changes people make in response to a bigger tax burden – be it working less, moving away or sheltering assets.

According to the annual UBS wealth report tit expects the UK to lose an astonishing 500,000 millionaires to other countries by 2028 (some 17 per cent of our total) – several times more than any other country.

The answer is to control unnecessary public spending so it can be focussed on where it is vital (instead of the SNP spending £12.5m on education in Africa when Glasgow is making 400 teaching posts redundant) and cutting taxes that will raise economic growth and deliver higher revenues. Without moving the dial the OBR projections will become reality and Ewen Stewart’s warnings be proven correct.

Brian Monteith is a former member of the Scottish and European parliaments and a director of GlobalBritain.co.uk