Labour MPs call for the Chancellor to go beyond fiscal tinkering at the upcoming Budget

New polling reveals a majority of Labour MPs (52%) think the Chancellor should raise taxes at the Budget to allow for additional spending and investment over and above the amount needed to meet her fiscal rules.  

Only 13% would prefer the Chancellor to raise taxes by just enough to meet her fiscal rules, and keep spending and investment at the same level.

These findings show widespread support among Labour MPs for a more ambitious fiscal approach that doesn’t just focus narrowly on meeting fiscal rules but also creates space for higher investment and spending in priority areas. 

The survey, which was conducted by Survation for the Invest in Britain campaign, also found that a large majority of Labour MPs think that the UK’s fiscal framework should focus more on:

• promoting sustainable and inclusive economic growth (76%)
• resourcing high quality public services (72%); and 
• responding to geopolitical threats and emergencies (59%). 

More Labour MPs than not also believe that the current fiscal framework is not fit for purpose in achieving those same objectives:

• 45% think the fiscal framework is unfit for purpose for responding to geopolitical threats and emergencies, vs only 33% who think it is fit for purpose.
• 45% also think the fiscal framework isn’t fit for resourcing high quality public services, vs 36% who think it is.
• 43% think the fiscal framework isn’t fit for promoting sustainable and inclusive economic growth, vs 39% who think it is. 

This indicates strong support in the Parliamentary Labour Party for a fiscal framework that gives the government greater flexibility and firepower to respond to the structural challenges facing the UK economy. 

These insights into Labour MPs’ views on fiscal policy come as speculation mounts that the Chancellor will announce tax rises to meet her fiscal rules and increase headroom at the Budget. Many commentators also expect the Chancellor to make changes to the fiscal framework so that the OBR undertakes only one full fiscal forecast a year. 

Louis Willis, Director of the Invest in Britain campaign, said:

“The government’s current fiscal approach risks leaving Britain stuck in a low-growth trap. We need to get beyond a simplistic obsession with ‘headroom’ and instead start using fiscal policy as a tool to drive sustainable growth. 

“These findings show clear support among Labour MPs for a more ambitious and credible strategy — one that raises the revenue needed to rebuild public services and invests in the foundations of long-term growth.”