Britain Needs Serious Investment, Not Budget Tinkering

Britain’s new Labour government has promised to put investment at the center of next week’s budget. That’s where it belongs. More investment, public and private, is essential to boost the country’s persistently sluggish economic growth. But Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves must also remember that getting value for money in public investment is crucial.

This obvious point risks being overlooked. Pre-budget discussions have concentrated on how to adjust the government’s “fiscal rules” to allow “headroom” for more borrowing and hence more investment. The current rules require debt as a share of gross domestic product to fall by the fifth year of the forecast, and day-to-day spending to be funded out of revenues. Whatever the rules, Reeves must make a convincing case that the benefits of specific public investments justify the costs.