𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Ed Miliband is masterminding a “gargantuan confidence trick” that risks burdening British families with hidden “shadow debt” to fund Labour’s Net Zero agenda, it has been claimed. And financial analyst Bob Lyddon fears the move will inflate household bills for decades while dodging official debt metrics.

According to Mr Lyddon, founder of Lyddon Consulting Services, Labour’s plans, detailed in the November 2025 Budget papers, are set to “falsify the national accounts” by obscuring the true cost of infrastructure, industry, and clean energy projects. The Government intends to fund these initiatives with a mountain of new debt that will not appear in conventional measures such as General Government Gross Debt, Public Sector Net Debt, or Public Sector Net Financial Liabilities.

Mr Lyddon warns: “The debt will exist but in the shadows, and it will be expensive. The cost of the interest and the repayments will be charged, without their touching the national accounts, through to UK businesses and individuals in their energy bills, water bills, travel costs, supermarket bills – on all essentials and luxuries, on everything.”

The strategy, according to critics, allows the Government to present an illusion of fiscal prudence while effectively imposing long-term costs on families. By concealing borrowing, Labour could claim to achieve significant infrastructure and clean energy milestones without raising the official debt, misleading the public, investors, and even credit rating agencies.

Mr Lyddon, who also set out his concerns in an op-ed on the Institute for Research in Economic and Fiscal Issues, describes the approach as a “gargantuan confidence trick,” predicting it will push operational costs higher for businesses, which will inevitably feed through to consumer prices. He says: “The pain will last for many decades,” linking the scheme directly to higher inflation and the cost-of-living crisis.

Industry insiders fear the hidden liabilities could distort market signals, making investment decisions more opaque and raising borrowing costs for private companies. The utilities, transport, and retail sectors are particularly vulnerable, as rising operational costs are likely to be passed on to consumers. Household energy bills alone could rise sharply, compounded by surcharges embedded in everyday services.

Critics argue that the disguised debt approach reflects a broader Labour philosophy of “going further and faster” on Net Zero, using euphemisms to mask economic consequences. Mr Lyddon says the Government’s rhetoric about a “decade of national renewal” should be read with caution. He adds: “For ‘renewal’ read ‘disaster’,” highlighting the perceived disconnect between political messaging and financial reality.

The tactic also raises transparency concerns. By excluding substantial liabilities from the national accounts, the Government could undermine accountability, leaving citizens and watchdogs without a clear picture of fiscal exposure. Credit rating agencies could be misled about the country’s true borrowing, affecting interest rates and long-term investor confidence.

Labour officials argue that their plans are essential for achieving the UK’s Net Zero targets, emphasising the need for immediate investment in renewable energy, low-carbon infrastructure, and green technology.

However, opponents warn that without clear accounting, these ambitions may saddle future generations with hidden costs while failing to deliver the promised economic benefits.

Economists caution that shadow debt, by its very nature, transfers risk to households indirectly, often through price mechanisms rather than direct taxation. In this scenario, energy, transport, and essential goods could become vectors for repayment, compounding existing inflationary pressures.

The debate over shadow debt illustrates a tension at the heart of UK politics: balancing ambitious climate policies with fiscal transparency.

While environmental advocates hail net zero initiatives as critical to avoiding climate catastrophe, opponents like Mr Lyddon insist that the fiscal sleight-of-hand embedded in Labour’s plans could crush living standards.

As the UK approaches the next General Election, questions over accountability, hidden liabilities, and the real cost of Net Zero policies are set to dominate the debate.

Analysts warn that families, rather than institutions, may ultimately bear the brunt of what Mr Lyddon calls a “gargantuan Net Zero trick,” reshaping household budgets for decades to come.

An HM Treasury spokesperson said: “Our non-negotiable fiscal rules were set out publicly at the Budget two years ago by the Chancellor and we’ve been transparent about these. They ensure that we are getting borrowing and debt down, while prioritising investment to support long-term growth. As a result, we are cutting borrowing more than any other G7 country, with borrowing this year forecast to be the lowest in 6 years as share of GDP.”