Even with the Labour leadership shift underway, the UK remains at risk of tax hikes due to soaring government borrowing. The public sector debt increased sharply in April, with spending surpassing revenues and the cost of servicing the British debt jumping by £10.3billion from a year ago.
Brits face the threat of tax hikes whoever wins the Labour leadership struggle as grim figures showed Government borrowing surging. The public sector racked up £24.3billion of borrowing last month, the highest April level on record outside of the Covid peak.
Spending far outstripped revenues as the Iran crisis drove the cost of servicing the UK's debt mountain to £10.3billion – nearly a billion pounds more than a year ago. The stark picture emerged as Labour hopefuls pitch to the party's Left as they jostle to take over from Keir Starmer. Wes Streeting sparked fury yesterday by demanding a 'wealth tax' targeting income from shares and investments.
Economists warned it would actually reduce tax income rather than raise the £12billion he claims. The public sector racked up £24.3billion of borrowing last month, the highest April level on record outside of the Covid peak Spending far outstripped revenues as the Iran crisis drove the cost of servicing the UK's debt mountain to £10.3billion – nearly a billion pounds more than a year ago Andy Burnham has previously backed an increase in the top rate of tax Wes Streeting sparked fury yesterday by demanding a 'wealth tax' targeting income from shares and investments However, even if there is no change in No10 there is rising concern that taxes will have to go up again to balance the books.
Chancellor Rachel Reeves has already pushed the tax burden towards a never-before seen peak. ONS Chief Economist Grant Fitzner said: 'Borrowing this month was substantially higher than in April last year and although receipts increased compared with April 2025, this was more than offset by higher spending on benefits and other costs.
'Borrowing for the latest full financial year was revised down slightly, and on a comparable basis remains the lowest since the year ending March 2020. ' Keir Starmer is struggling to cling on to the Labour leadership Chief Secretary to the Treasury, Lucy Rigby, said: 'Earlier this week the International Monetary Fund agreed we had the right economic plan to reduce the deficit.
'We are cutting borrowing and debt – with our actions reducing government borrowing by over £20billion last year – while driving growth through £120billion of additional capital investment over the Parliament. 'Working families have benefited from falls in inflation and cuts to interest rates – and our non-negotiable fiscal rules will be all the more important to continue to protect them as we face the consequences of the war that we have played no part in. '
Government Borrowing Surge Public Sector Debt Increase Iran Crisis Impacts Spending And Debt Servicin Economists Raise Doubts About Proposed 'Wealth Rachel Reeves' Tax Burden Shift Raising Concer
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