Key facts
- Badenoch said Healey's 3% of GDP defence target faces an £11bn shortfall in 2030-31.
- Badenoch put the cost of a National Care Service at up to £17bn and council house building at £4bn.
- The OBR said a National Care Service could cost between £3.5bn and £17bn a year depending on its final design.
- The IFS said the government would need an additional £28bn for departmental spending pressures, including £11bn for defence.
- Shadow chancellor Andrew Griffith said Britain faces a fiscal cliff edge with higher taxes and borrowing.
- A Treasury spokesman described the Conservative findings as fiction and said the Budget meets fiscal rules.
Kemi Badenoch, leader of the Conservative Party, said on October 31, 2026 that Chancellor John Healey had left Britain with a £49bn black hole in its public finances that would require substantial tax increases. In an article for The Telegraph, she said Labour would have to raise taxes by £1,700 per household per year by 2030-31 to pay for unfunded spending promises.
Badenoch said Healey had not explained how he would meet a defence spending target of 3% of GDP, claiming an £11bn shortfall in 2030-31. She put the cost of a National Care Service at up to £17bn, a council house building plan at £4bn, and said departments would need an extra £17bn to avoid unrealistic real-terms cuts.
"The worst is yet to come," Badenoch said, adding that expensive proposals create a £49bn black hole after the Budget. She said Prime Minister Andy Burnham had signalled he would have written the 2024 manifesto differently and that Labour would have to raise taxes by £1,700 for every household.
The Office for Budget Responsibility said on Wednesday that several Labour announcements were not yet possible to fully quantify because policy details had not been finalised. It said the fiscal cost of a National Care Service was highly dependent on final design and could run between £3.5bn and £17bn a year. The OBR said the government needed to build 22,000 council houses a year, at an additional £3bn to £4bn annually.
The Institute for Fiscal Studies said the government would need an additional £28bn for departmental spending pressures, including £11bn for the defence target, £8bn to offset higher inflation since the spring and £9bn to avoid real-terms cuts. Badenoch said Burnham had no plan to fund defence or control welfare spending.
Shadow chancellor Andrew Griffith said Britain faced a fiscal cliff edge and that Labour had kicked the can down the road. A Treasury spokesman described the Conservative findings as fiction and said the Budget meets fiscal rules and fully funds defence.