Spend to Save Britain: A Common Sense Approach to the 2024 Budget

Chancellor of the Exchequer Rachel Reeves has described the UK economy as being in its worst state since the aftermath of WWII. But the Government’s new fiscal rules mean that its 2024 Autumn Budget has shied away from a Beveridge-style public investment package that made Attlee’s administration from 1945 so successful. The change to the definition of debt has freed up some space for borrowing for investment in infrastructure, though not enough to make up for the harm caused by cuts in the last 15 years. On the other hand, the announced ‘stability rule’ and a 2% productivity, efficiency and savings target mean that an austerity agenda that has clearly failed over the last 15 years will continue for current spending in most government departments.

Instead, we need to invest in Britain to rebuild the nation, and in ‘Spend to Save Britain’ we show that it provides such large returns through productivity multipliers (£2.74 for the economy for every £1 of public funding invested) and savings to the public purse that it makes no economic sense to pursue cuts. To support that initial investment, and in contrast to the Government’s political gymnastics in targeting complex and obscure mechanisms to meet ill-judged manifesto commitments, we also show that straightforward, fair and effective taxation on passive wealth, carbon production, luxury consumption and corporate profit is feasible, affordable and popular In addition to this macro analysis, this report uses complex, cutting-edge microsimulation modelling to show the impacts of these reforms on our everyday experience, providing an overwhelming economic argument for the policies we set out above. We underpin all of this with a set of comprehensive and sustainable economic rules that would secure the nation and the wellbeing of its people.

We further show that this approach is very popular with the public, with an average approval rating of 73/100 nationally, and 60/100 among 2019 Red Wall Conservative voters.

The Government’s stated vision is a decade of national renewal. This report shows how that can be achieved, with an ambitious Common Sense Alternative Budget providing funding for a whole-government programme based on Act Now.