Briefing - What Debt Interest Could Pay For

9th August 2024

Debt interest is the cost the government pays on its borrowing. It mostly comprises interest paid on government bonds, which are financial products sold by the government to raise money. As public sector net debt continues to grow, reaching a record high of nearly £2.7 trillion in 2023-24,[1] spending on debt interest has become a significant and recurring proportion of public spending, reducing what is available for other priorities.

With a targeted approach to reduce public sector net debt, and therefore debt interest obligations, the government would be able to reprioritise funding to more pressing issues for the public such as funding public services and reducing the tax burden.

Debt interest is the cost the government pays on its borrowing. It mostly comprises interest paid on government bonds, which are financial products sold by the government to raise money. As public sector net debt continues to grow, reaching a record high of nearly £2.7 trillion in 2023-24,[1] spending on debt interest has become a significant and recurring proportion of public spending, reducing what is available for other priorities.

With a targeted approach to reduce public sector net debt, and therefore debt interest obligations, the government would be able to reprioritise funding to more pressing issues for the public such as funding public services and reducing the tax burden.

[1] Office for Budget Responsibility, Public finances databank - June 2024, 5 July 2024, obr.uk/download/public-finances-databank-june-2024/, (accessed 19 July 2024).

[2] Ibid.

[3] Ibid.

[4] National Geographic, Mount Everest, education.nationalgeographic.org/resource/mount-everest/, (accessed 24 July 2024).

[5] Moorhead, J., HERE WE OWE! This is what our £2 trillion debt would look like piled up in Wembley stadium, The Sun, 5 March 2021, www.thesun.co.uk/news/14250955/this-is-what-our-2-trillion-debt-would-look-like-piled-up-in-wembley-stadium/, (accessed 24 July 2024).

[6] Moak, J., Olympic Swimming Pools, Phinizy Center for Water Sciences, phinizycenter.org/olympic-swimming-pools/, (accessed 24 July 2024).

[7] The Royal Mint, £1 Coin Designs and Specifications, www.royalmint.com/discover/uk-coins/coin-design-and-HERE
Taxpayers Alliance

To see the debt chart scarily updating second by second go HERE