Labour MPs cheer the Chancellor’s attack on poverty, but is there a bigger story to come?

What is it that, when the road ahead seems peppered with risk and uncertainty, might nonetheless hold us fast to our course? Often, the answer is a vision of where we hope to arrive. Most great political adventures are built on that kind of aspiration, and on an ability to share it with others. As the political philosopher Hannah Arendt saw it, change emerges from our collective capacity to articulate something new together.

What sits at the heart of many of these successful projects is a vision of a political economy. That is an account of the economy and of the institutions and practical arrangements that make it up that allows people, businesses, and communities to buy in, even when individual pain is felt, and to stay the course. It is a thread that people and institutions can return to in the face of shocks, whether economic, political, or geopolitical.

For the last decade, British politicians have made several attempts to tell this kind of new story - to build or articulate a new political economy that Britain can invest its time and hope in. And yet none have been truly sustained. Perhaps the strongest, “levelling up,” still lingers on, but many others have been forgotten.

Rachel Reeves’ recent budget was the latest attempt to articulate that plan.

It’s true to say this budget had measures—lots of them. But for many commentators, the question has remained: do they add up to a vision? A story that can help sustain an economy and politics beyond the months and years ahead.

It obviously had ideology. This was a left-wing budget. It was a budget that raised taxes and spent them to tackle poverty. It’s the bread-and-butter of social democracy. And that is why so many Labour MPs were so quick to praise the budget. These measures are what they came into politics for.

The removal of the two-child benefit cap and other welfare increases will undeniably work to tackle the grim reality of rising child poverty in Britain. Its removal will have a very real impact on children across Britain, transforming life chances now and into the future.

The arrival of a new pilot of place-based budgeting for combined mayoral authorities is also a huge step forward. It offers a new opportunity to experiment with a genuine place-first approach to investment and public services. This is a crucial step to put power and trust into the hands of those in the community who know best. It is a chance for voices to be heard. The kind of policy that should run throughout this government's policy agenda. It is also notable that the creation of tourist tax powers may be the first step in greater fiscal devolution—something long called for by Mayors.

Both of these policies signal a possible emerging political economy, one that puts power and trust in places to shape their economies and public services. It is a topic much highlighted by the Cabinet Office minister, Josh Simons, and one we will explore in more detail at our upcoming Britain Renewed 2025 conference. 

And yet questions remain.

Because even though these individual measures were clear, it is less apparent that a broader account of the possible future is being fully articulated, committed to in its fullest.

In a way, this is not a surprise.

For the government or some other political project to succeed, it must articulate to businesses, households, and communities a vision of the good life—what this hard work, taxation or spending is in service of. And finding agreement across all of those groups is extraordinarily difficult.

There were some changes to property taxation, yet there was little sense that this was a government finally grasping the nettle of a wider reform of Britain’s tax system. This is despite the fact that there is now broad agreement on the need to reform taxation, an idea which will be at the centre of a three-day international conference hosted by UCL and the IFS shortly, with leading economists from the US, Europe, and Asia. We will be running our own UCL Policy Lab in-depth conversation on how we develop new policy and political approaches to taxation and reform.

But the need for more goes beyond specific areas. Stability is crucial, all will agree, yet there will be no stability without a political economy that can be sustained through good times and bad.

And fundamentally, this is where a growth story needs to be told through both words and policy. It needs to draw on our past and present.

We have seen how, over the decades, politicians in moments of economic crisis have crafted a new story and understood the urgency of now. Be it on the right with Margaret Thatcher or with Attlee’s Labour and the post-war settlement, or Wilson’s “white heat of technology.”

This Prime Minister famously doesn’t do visions. He gets angry at the very idea of “Starmerism”. Yet it is the ability to articulate a collective future that shapes politics and holds countries together, especially in moments of crisis. Often, they can be borrowed, amended to the time. But they must inspire and bring us together.

What story could be told?

Well, it cannot be made out of wholly new cloth.

 “There cannot be new things in England. There can be old things freshly presented, or new things that pretend to be old.” is what Hilary Mantel tells us in her story of England’s second Chancellor, Thomas Cromwell.

The truth is the nation is rich with these tales, new and old—of people and places that have come so far, achieved so much, and continue to create, dream, and build. As the bright young things of the policy world like to remind us in Substacks and podcasts, Britain is the nation that split the atom, birthed the jet age, built an imagery that captured a global audience, from Burberry to Brat. And now with world-beating universities, football clubs, precision engineering, and yes, technology companies.

Choose your tale, your place, your people, and stick to it. Build on the old for a new story. And yet, whatever it is, speak to the nation of something that can sustain it.

In the coming months, it will be for this government and others across the political spectrum to decide whether they have a story that Britain can get behind—a genuine change that meets the urgency of now. We will be delighted to play our part in that challenge.