Count the Costs: A Common Sense update for the 2025 Spring Budget

In our response to the Government’s Spring 2025 Budget, we emphasise the need for the Government to count the cost of its cuts and implement common sense, evidence-backed alternative measures that restore stability, secure meaningful growth, improve living conditions and achieve national renewal.

The evidence across several decades demonstrates that penny-pinching austerity measures are precisely those that constrict growth. The Government needs to view advice advocating for further constriction in public spending as explicitly ideological, rather than neutral and technocratic.

While the Government is correct to identify perverse incentives within the welfare system, those incentives exist because of broader economic insecurity around precarious and sparse employment opportunities. The increase of material insecurity is having considerable effects on health, wellbeing and economic activity and the size of the working age population affected by health conditions provides good reason to focus on enhancing social security and public spending. There is little sign of the private sector being able or willing to provide that investment, not least because the required infrastructural development to underpin it can only be led by the state. 

This report shows that repeating the mistakes of austerity is a guaranteed means of perpetuating decline. The focus on cutting welfare is emblematic of that drift – reducing spending power amongst the most vulnerable within Britain, many of whom live in communities that require that spending in order to remain financially viable. A bold Labour Government committed to affordable taxation on wealth and profits would have the resources at its disposal to deliver on its own priorities. This report and the broader economic underpinnings of Act Now should give the Government confidence to chart a new course. This is in its own and the nation’s interests. The government must remember how the nation got into its current state, and focus on national renewal. It must count the cost of its cuts and commit to a real plan for change.