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There are few certainties in a general election campaign. This time is no different, though there are two things of which we can be reasonably confident.

First, the UK’s parlous fiscal position will hang over the campaign like a dark cloud. Both Labour and the Conservatives are committed to precisely the same debt target. That target is currently on track to be met by the finest of margins. Promises of fiscal largesse, whether tax cuts or spending increases, would mean breaching it. If the parties are serious about their fiscal rules, they’ll have to keep a lid on those promises.

Second, the parties will do everything possible to avoid revealing how they’d approach the difficult economic and fiscal trade-offs awaiting the next government in the autumn.

Here, we discuss each of these points in turn before reflecting on what they mean for the campaign.

Why it’s so hard to get debt falling

Jeremy Hunt and Rachel Reeves, and their respective parties, have both committed to have debt as a share of national income (the debt-to-GDP ratio) falling by the fifth and final year of the forecast. Both have other fiscal targets, but it is this debt rule that is currently acting as the binding constraint. The problem is, for a Chancellor with a goal of reducing debt as a fraction of national income, things have arguably never been so bad.

Government debt is measured relative to the cash size of the economy – what fiscal nerds refer to as nominal GDP. This is the denominator in the debt-to-GDP ratio. When the cash size of the economy is growing quickly – due to either high inflation or rapid ‘real’ economic growth – it is, all else equal, easier to get debt falling. It’s also easier to get debt falling when interest rates are low, and indeed when debt is low, because the government doesn’t need to spend as much on servicing its debt. When one or both of those conditions are satisfied, the government can run looser fiscal policy – it can borrow more – without pushing debt onto a rising path.

The trouble is, neither of these conditions – high growth or low debt interest payments – are expected to be satisfied in the next parliament. In fact, the latest official forecasts that the next government will face lower than average nominal GDP growth (3.6% per year) and higher than average debt interest spending (3.3% of GDP): the worst of both worlds. This is summarised in Figure 1 and explained in more detail in this previous election briefing.

This picture improved slightly between November 2023 and March 2024 (as shown by the difference between the black and grey markers in Figure 1) as forecasts for debt interest payments came down slightly. These forecasts are subject to considerable uncertainty and it is entirely possible that things will improve further. Growth could pick up, or debt interest payments could fall. The combination of weak growth and high interest rates would certainly be unfortunate and unusual historically, and we may get lucky. 

But we might not. Just because thousands of English and Scottish football fans are crossing their fingers and hoping for the best this summer doesn’t mean that the next Cabinet should do the same. The fiscal outlook might even have deteriorated since the spring, as central banks have indicated that they intend to keep interest rates higher for longer, and the scale of the bill for various compensation schemes (most notably to victims of the infected blood scandal) has become apparent. Indeed, some reports suggest that one reason we’re having a summer election is that the government didn’t expect to be able to cut taxes in an autumn statement without breaching its promise to get debt falling. This debt target leaves a lot to be desired in terms of its design, but that is almost beside the point. Whoever presides over the post-election fiscal event is likely to have very limited fiscal room for manoeuvre. 

Inevitable post-election trade-offs 

This limited room for manoeuvre – limited “headroom” in the oft-used but rather unhelpful parlance – will be despite a considerable package of tax rises and spending cuts built into the baseline. Taxes as a share of national income are forecast to grow from 36.5% of national income in 2024–25 to 37.1% in 2028–29, not least due to an ongoing freeze to the cash value of income tax thresholds (a freeze which has another three years to run). Spending on everything other than debt interest is set to fall from 40.8% to 39.0% of national income. The fact that this is only just enough to stabilise debt in five years’ time speaks to the difficulty of the economic and fiscal inheritance awaiting the next government. 

On the spending side, one major and fairly immediate challenge for the next government will be the Spending Review due by the end of the calendar year. Departments do not have detailed budget allocations beyond this year (2024–25). The high-level spending plans published alongside the March Budget, which will act as the baseline for the parties’ election promises and be the starting point for the next government, imply cuts to some ‘unprotected’ budgets. Precisely how big those cuts are depends on what happens to the ‘protected’ areas (like health and defence), among other things. The whole point is, there are no published plans beyond this year, meaning that we don’t know. A reasonable estimate is that unprotected budgets face cuts of between 1.9% and 3.5% per year (or between £10 and £20 billion by 2028–29) – see Figure 2. Notably, this is before accounting for recent announced increases in defence spending. The precise figures are less important than the fact that there are cuts on the way with absolutely zero sense from the main parties about where those might fall.

Figure 2. Estimated change in day-to-day departmental budgets (average annual real-terms growth) under existing spending plans, 2024–25 to 2028–29

Investment budgets, too, are facing cuts. Government investment is set to fall sharply as a share of national income even with Labour’s promise of an additional £23.7 billion of green investment over the parliament. 

It’s not that spending cuts would be impossible to deliver. It’s that they would be impossible to deliver while maintaining the existing contours of the welfare state (even before the planned expansion of childcare subsidies and introduction of a lifetime cap on social care costs), and while maintaining the current range and quality of public services. We could, as a country, decide to charge for services that are currently free, or to means-test things that are currently provided universally, or for the state to stop doing things that it currently does. Yet such discussions seem unlikely to feature in the debate. We wouldn’t allow parties to tell us they will raise taxes without specifying where from, yet we allow them to promise spending cuts without any detail as to where the axe will fall. 

The winners of the election won’t be able to dodge this question for long. The next government may choose to hold a one-year Spending Review (covering just 2025–26) to give itself more time to plan its strategy and come up with a coherent plan for the rest of the parliament. This would delay, but not fundamentally alter, the trade-offs required. 

Readers can explore these trade-offs for themselves using our interactive ‘Be the Chancellor’ tool, produced in partnership with Nesta.

What this means for the campaign 

If we look at the big fiscal picture, the next government effectively has three options. It can implement the spending cuts baked into existing plans – cuts that will inevitably be painful. It can implement tax rises – over and above those already in the books. Or it can borrow more – something that is highly unlikely to be consistent with a promise to stabilise debt as a share of national income. The parties might well be reluctant to tell us which of these they would opt for upon taking office. That doesn’t mean that we should refrain from asking them. 

It is perfectly possible to make a principled case for each of these options. It is perfectly reasonable to hope for more economic growth, and highly desirable for parties to present plans for how they’d aim to deliver it.  But there is no escaping the tough fiscal realities facing the UK. For a party to enter office and then declare that things are ‘worse than expected’ would be fundamentally dishonest. The next government doesn’t need to enter office to ‘open the books’; those books are transparently published and available for all to inspect. We should use them as the basis for an open and robust discussion during the election campaign. 

[See original article for explanation of figure data sources, assumptions and caveats]

Taxpayers’ bill from compensation cases related to unrepaired potholes in roads has shot up by 57 per cent in a single year, new data analysis shared with i reveals.

Alexa Phillips inews.co.uk

Authorities in England and Wales spent £25.6m on the pothole payouts to drivers, and associated costs, in 2023/24, compared with £16.3m the previous year. They covered both injuries and damages to vehicles and made up the large majority of the £28.8m spent on all road user compensation claims (see graph below).

The average number of road user compensation claims received per local authority has also rocketed to 421, compared with 234 the previous year. And of those claims 89 per cent related to potholes in 2023/24, compared with 72 per cent the year before, according to the data from a survey of local authorities by the Asphalt Industry Alliance.

Simon Williams, head of policy at the RAC motoring group, warned that the amount local authorities were currently paying in compensation “will pale in comparison to the eventual bill if our pothole plague is allowed to continue”.

The money used for the payouts could have filled more than 350,000 potholes, i analysis has found. The average cost of fixing a pothole is £72.26 but payouts average around £405 per claim.

Councils in England and Wales did spend an estimated £143.5m fixing potholes in 2023-24 – a rise from £93.7m in 2022-23.

But Jack Cousens, head of road policy at the AA motoring group, said he was “worried about budget cuts to road maintenance”.

He told i: “It’s not just fixing potholes. It’s other things such as painting worn outlines, cutting back, overgrown hedges that covering signs cutting back sight lines, where the grass has got long on roundabouts and key junctions, all of those sorts of things form part of their transport budget.”

Potholes have also been responsible for a series of deaths in recent years, prompting coroners to urge councils to repair them.

i has found seven occasions when coroners in England and Wales have sent councils or National Highways official warnings over the risk of further deaths because of potholes.

They come in future deaths reports, which are sent after inquests when a coroner thinks action is needed to protect lives.

The most recent was in October when Lancashire County Council was accused of failing to fix a large crack in the road that led to the death of a cyclist.

Harry Colledge, 84, was flung from his bike in Winmarleigh after it hit the pothole.

He suffered a fatal head injury and died in January 2023.

Kate Bisset, the coroner, wrote that the council had been notified of the crack in September 2022 but failed to identify it in inspections. “There is a risk of future deaths to road users if the surfacing of this road is not adequately maintained,” she warned.

In April 2023 a coroner wrote to National Highways, urging them to repair a Northamptonshire A road on which a collision occurred in 2021, which killed Benjamin James Teague, 26.

Mr Teague’s death was not blamed on the pothole – he drove on the wrong side of the road when overtaking a vehicle and crashed into an oncoming car – but evidence was given during his inquest that the road on which the collision occurred is “in a very poor state with potholes”.

Coroner Anne Pember said the scene of the crash – the A5 between Pottersbury and Paulesbury – was repaired shortly after the crash but had since deteriorated.

There were more warnings in 2022 from coroners about the risk of further deaths from potholes after cyclists were killed.

Mr Williams said the reports were a “stark reminder of the true consequence of Britain’s crumbling roads”.

“Pothole-related injuries are entirely preventable if the roads were looked after better,” he added. “So the fact councils are shelling out such large sums of money in compensation for sub-standard road surfaces is both ridiculous and totally unsustainable.”

The Government has put £8.3bn in funds from the cancelled parts of HS2 towards resurfacing roads, but the RAC said this would cover just 3 per cent of all council-managed roads in England.

The RAC said a proportion of the money raised from fuel duty should be ringfenced for road maintenance.

Councils partly pay for pothole repairs out of their main budgets, which leaves road maintenance vulnerable to cuts to help pay for other services.

National Highways regional director Victoria Lazenby said: “We regard every single death on our roads as one too many. The safety of everyone on our road network matters, it is an imperative for our business in what we set out to achieve and a core value of our organisation in how we go about it.

“Therefore, we take very seriously any comments or concerns raised by coroners in relation to our roads and take action where possible to further improve the way we work and help prevent any more people coming to harm.”

Lancashire Council did not respond to a request for comment.

A Department for Transport spokesperson said: “While the UK’s roads are some of the safest in the world, every death on them is a tragedy, and we are investing £8.3bn of reallocated HS2 funding – enough to resurface the equivalent of over 5,000 miles of roads – so local authorities can maintain their roads making them safer.

“The first £150m of this increase was released within weeks of it being announced in October, with the next £150m coming later this year.”

Thames Water has sent samples of water for lab testing after dozens of people reported becoming unwell with stomach cramps, vomiting and diarrhoea in south-east London.

Helena Horton www.theguardian.com

Earlier this month, unsafe drinking water led to more than 100 cases of a waterborne disease in Devon, with people asked to boil their water because of contamination fears.

After cryptosporidium, a disease that can cause symptoms such as diarrhoea and vomiting, was detected in the water supply in the Brixham area of Devon 10 days ago, 17,000 households and businesses were told by South West Water not to use their tap water for drinking without boiling and cooling it first.

Now residents in Beckenham have reported being struck by a stomach bug which is causing days of vomiting and diarrhoea. They include a four-year-old boy suffering days of vomiting, and an adult woman who was so unwell she went to hospital with stomach pain, vomiting and dehydration.

Katie Cox, a TV producer who lives in the area, said: “I was unwell two weeks ago with what I thought was a stomach bug.

It was a good week before I was able to eat again properly. Since then, the South West Water contamination has come to light and I became concerned that maybe there is something in our water.”

Whole families have reported becoming unwell, and fear it may be caused by a bug in the water. After reporting the issue to Thames Water, people who have been unwell said technicians came to take samples of their tap water. Thames Water confirmed its technicians collected samples, which have been sent for laboratory analysis.

A spokesperson said: “We take the quality of our water extremely seriously – it is the highest quality drinking water in the world – and since 2010 more than 99.95% of tests taken from customers’ taps met the standard required by UK and European legislation. Every year, we carry out more than 500,000 tests, taking samples from source to tap. Customers can find information about their water supply by inputting their postcode on our website.”

Thames Water has not carried out specific testing on any treatment works nearby, but a source at the company said it carries out general monitoring from the wider water supply zone as part of a statutory monitoring programme, and there are no recent failures from the Central Sydenham water zone.

Labour’s shadow environment secretary, Steve Reed, said: “Our water industry is broken. Just days ago, a parasite outbreak was making people sick in Devon, now [Beckenham’s] drinking water may not be safe to drink.

In Devon, South West Water said on 14 May that the water was safe to drink before reversing this advice a day later. The business said data from tests showed treated water leaving its treatment works was not contaminated, but further tests overnight found small traces of cryptosporidium.

In Brixham, 2,500 properties remain under boil tap water notices as the system continues to be flushed, and there has been no date given to those properties for when the water will be safe to drink again.

David Harris, South West Water’s drought and resilience director, said: “We will not lift that boil water notice until it is safe to do so.”

Sir Patrick Vallance, the government’s chief scientific adviser during the Covid pandemic, has warned that Britain is not prepared for another pandemic.

Speaking more generally about chaos in No 10, Sir Patrick said: “We have seen, I think, a really extraordinary situation over the past few years with multiple prime ministers, no real accountability for what’s going on and an extremely chaotic system that needs to be revised. That’s why it’s really important that there is an election now. It’s time that we have a change.”

Ellie Harrison www.independent.co.uk

The scientist called for future pandemics to be treated like potential wars, with as much focus going into planning for them as goes into the armed forces.

Speaking at the Hay Festival, during a panel chaired by The Independent’s editor in chief Geordie Greig, Sir Patrick said: “Are we ready for another pandemic? The answer is no.”

He identified several key areas for improvement. “We need better surveillance to be able to pick these things up,” he said. “We need to be much faster, much more aligned. And there are ways to do this – getting rapid diagnostic tests, rapid vaccines, rapid treatments – so that you don’t have to go into the extreme measures that took place last time.”

Vallance said that future pandemics, which he called “absolutely inevitable” need “continual government focus and attention”, and yet “by 2023 the G7 had sort of forgotten about it.”

He continued: “You can’t forget about it in two years.”

Sir Patrick was the UK government’s chief scientific adviser from 2018 until last year, helping to shape key coronavirus policy including lockdowns, as well as becoming a familiar face to millions on the televised Covid briefings alongside then PM Boris Johnson.

Painting a picture of Johnson’s incompetence during the pandemic, he said that when he was asked to present at the G7, on Zoom, the PM interrupted him to tell him he was on mute. Sir Patrick said he told the PM he was certain that he wasn’t on mute, and then watched as “somebody came across and whispered into Johnson’s ear and he said, ‘Ah, sorry, I haven’t got my headphones in.’”

Sir Patrick added: “What is absolutely inevitable is there will be another pandemic. And we’re not ready yet. I don’t think we’re treating it in the way that we treat, for example, the armed forces. We know we have to have an army, not because there’s going to be a war this year, but because it’s an important part of what we need as a nation. We need to treat this preparedness [for a pandemic] in the same way, and not to view it as an easy thing to keep cutting back when there’s no sign of one.”

He also said, however, that he was feeling optimistic about the Pandemic Preparedness Treaty that the World Heath Organisation is attempting to push through. The main goal of the treaty would be to foster an all-of-government and all-of-society approach, strengthening national, regional and global capacities and resilience against future pandemics.

“I’m optimistic for this so-called ‘100 Day Mission’ to get diagnostics, therapeutics and vaccines,” he said. “But it needs political will to drive that forward, and I’m concerned that that’s going to get lost quite quickly.”

Speaking more generally about chaos in No 10, Sir Patrick said: “We have seen, I think, a really extraordinary situation over the past few years with multiple prime ministers, no real accountability for what’s going on and an extremely chaotic system that needs to be revised. That’s why it’s really important that there is an election now. It’s time that we have a change.”

He said the sight of prime minister Rishi Sunak, standing out in the pouring rain this week, as he announced there would be a general election on 4 July, was “emblematic” of the “chaos” within the Conservative Party.