The Book That Rachel Reeves Should Read Before Her Budget – But Won’t

The Autumn Budget is usually the largest fiscal event of the year, laying out the Government’s taxation and spending priorities in the coming year. Chancellor Rachel Reeves will deliver her second Budget at around lunchtime on November 26th, after Prime Minister’s Questions. The economic backdrop to this Budget is dire to say the least.

Labour promised in its ‘Change’ manifesto last year to “kickstart” the economy in order to “secure the highest sustained growth in the G7 – with good jobs and productivity growth in every part of the country, making everyone, not just a few, better off”. However, a senior Cabinet Minister admitted Britain is facing a “growth emergency” ahead of the Chancellor’s Budget. Earlier this year, a leak revealed the broad trajectory of the Office for Budget Responsibility’s (OBR) upcoming growth forecasts, which were due to be published alongside Chancellor Rachel Reeves’s second Budget.

The leaked information indicates that the OBR has downgraded its growth projections for the UK economy from 2026 to the end of the current Parliament in 2029, its most pessimistic economic growth forecasts in 15 years. Britain’s growth potentially will be as low as 0.1% in some years, significantly worse than the previously forecast peak of 1.9% for 2026. Ms Reeves is expected to raise taxes to fund an expected £20 to £30 billion hit to the public finances from the OBR’s weaker growth outlook and higher debt costs.

Experts and business leaders warn that proposed Budget measures, such as a mansion tax and bank levy, could further hinder economic growth. Ed Al-Hussainy, an interest rate strategist at Columbia Threadneedle, an asset manager, said: “The biggest obstacle the Labour Government has is, first and foremost, growth. It’s had the bad luck of not being in a high-growth environment, and whatever policy levers that it’s pulled over the last 12 months haven’t worked.”

So, modest as prospects are for the next few years, they are now worse. Yet, the Government has overseen the country’s highest borrowing costs since 1998. The yield on 30-year Government bonds (gilts) hit 5.723% in September 2025, marking a 27-year high and surpassing previous peaks from earlier in the year. This surge reflects growing investor concerns over the UK’s fiscal outlook, economic stagnation and the Government’s ability to manage its debt. The situation has intensified pressure on the Chancellor to consider tax increases and spending cuts in the upcoming Budget as she faces disgruntled voters, rebellious members of her own political party and anxious bond investors.

How to Return to Growth

Against this horror-show backdrop, there are moments in a nation’s life when a book appears with almost perfect timeliness — a work that seems to speak directly into the storm gathering overhead. Jon Moynihan’s Return to Growth is such a book. Published in two dense, forensic volumes, it arrives just as the new Labour Government prepares to unveil its first Budget this week under a stagnant economy and an anxious public bracing for yet more taxes, more regulations and more sermonising from the state. If the UK is indeed, as many analysts increasingly warn, hurtling toward an IMF-style reckoning — a ‘doom loop’ where soaring debt service costs feed a falling currency which in turn feeds yet higher borrowing costs — Moynihan’s two volumes may prove to be the most important diagnostic manual and treatment plan available to any leader willing (and more importantly, able) to avert national decline.

Moynihan is too modest by half. Though he insists he is not an economist, he displays in these pages a keener analytical mind, a broader historical grasp and a deeper practical sense than most professors of economics in Britain’s universities. A businessman, venture capitalist and consultant by background, unencumbered by academic groupthink, he slices cleanly through the muddled orthodoxies that have trapped the UK and wider Western Europe in decades of low growth, over-regulation, bloated government, moral panics and fashionable ideologies. His thesis is simple, devastating and urgently needed: Britain — once one of the world’s greatest engines of prosperity — has allowed itself to drift into the torpor of social democracy, where high taxes, high public spending and a suffocating regulatory state have crushed dynamism, productivity and growth.

As the Budget looms and the Chancellor of the Exchequer Rachel Reeves— ‘Rachel from Accounts’, as some wryly call her — prepares to lean further into the very policies that caused the problem, Moynihan’s book is essential reading for any leader hoping to rescue Britain from its accelerating descent.

The Argument: Why Growth Matters — and Why We’ve Lost It

Moynihan structures Volume I around three pillars: the size of government, the rate of taxation and the quantity of regulation. These are not abstract economic variables. For Moynihan, they constitute the very architecture of national prosperity or decline. Across Europe, where the social-democratic model has ossified into dogma, the results are clear: barely any growth per capita for two decades, rising welfare commitments and failing public services. These are not steady-state economies. They are “barely ticking over”, unable to generate the surpluses required to sustain the very welfare state voters cling to. The system is, in his words, unstable and unsustainable.

The grounding for this analysis is laid out starkly in Moynihan’s first chapters. Economic growth, he argues, is not merely an instrumental good — it is a moral imperative. The idea that affluent societies can flirt with ‘degrowth‘, one of the more esoteric imports of luxury-belief elites, is savaged with statistical precision and moral clarity. Degrowth will not save the planet. In a zero-sum society, where anyone becoming richer can only be based on someone else becoming poor, it would condemn billions to shorter lives, greater disease and deeper poverty. The past two centuries of rising lifespans, falling infant mortality, dramatic expansions in material comfort and human flourishing — none of this was produced by central plans, socialist regimes or government ‘industrial strategies’. It was the outcome of private enterprise, competitive markets and innovation unfettered by dirigiste political fantasies. Government’s role in this remarkable ascent was simple: it got out of the way.

Yet Britain, like much of Europe, has forgotten this lesson. Wagner’s Law — that public expenditure grows inexorably as societies grow wealthier — has combined with political incentives to produce a state swollen well beyond its productive capacity.

Politicians purchase short-term popularity with long-term unaffordable commitments, leaving future governments to pick up the bill. Moynihan points out the brutal arithmetic: as public debt rises, servicing it consumes an ever-greater share of national output. Britain is among the most indebted of developed nations, spending over £100 billion a year simply to stay afloat. The UK’s debt-to-GDP ratio is now hovering near 100% — a level unthinkable two decades ago.

Against this background, Moynihan introduces core concepts that any first-year economics student should know but most politicians pretend do not exist: the Laffer Curve, the growth-destroying dynamics of over-taxation; the deadweight loss of regulation; and the devastating consequences of debt compounding over time. Taxes and regulations do not simply reduce growth at the margin — they can smother entire sectors, drive investment offshore and hollow out the entrepreneurial energy of a nation. Britain’s creeping descent into this condition is now unmistakable.

What Really Kills Growth: The Regulatory Hydra

Of Moynihan’s three villains — big government, high taxes, excessive regulation — it is the third he reserves his sharpest criticism for. Excessive regulation, he writes, is “what really kills growth” because it destroys not only present output but future possibilities.

The chapters on regulation are among the most powerful in the entire two-volume work. Here Moynihan synthesises themes as disparate as Net Zero, DEI ideology, ESG compliance, planning constraints, housing distortions, moral panics over mental health and climate change, and the metastasis of bureaucracy. What unites these trends is the relentless shift of power from ordinary citizens and businesses to regulators, quangos, civil service activist-bureaucrats and ideological networks.

Net Zero, for instance, has grown into “a festering mass of regulation, regulatory evasion, subsidy seeking and dodgy claims of success”. London’s Mayor Sadiq Khan — chair of the C40 network — emerges as a central symbol of this overreach, promoting policies that would choke off economic growth by restricting transport, mandating lifestyle changes and imposing severe limits on travel, clothing consumption, meat and housing. The C40 vision, in Moynihan’s telling, is nothing less than an agenda of enforced austerity disguised as planetary virtue.

The same dynamic emerges with DEI and ESG. Moynihan recounts with mordant humour the disastrous McKinsey report that purported to prove that diversity produces superior corporate performance — a study later debunked as unreproducible and empirically flimsy. But such evidence scarcely matters. Corporate HR departments have embraced DEI with the fervour of a state religion, consuming managerial time, institutional focus and financial resources — all to pursue ideological goals that undermine meritocracy, chill free speech and distract from the only purpose of business: to serve customers.

These are not small matters. Such regulatory overreach clogs the arteries of economic life. When house-builders must navigate habitats regulations protecting bats while mass immigration inflates demand for new homes; when landlords are harassed for failing to meet impossible Net Zero requirements; when the City of London — once an engine of global finance — is paralysed by anti-fraud regulations that produce little reduction in fraud, one begins to see the cumulative effect Moynihan warns of. Britain is turning into a high-cost, low-growth, bureaucrat-dominated economy.

None of this is incidental. All of it is political.

Europe’s Fatal Conceit — and Britain’s Addiction to Planning

Moynihan frames his critique in a deeper philosophical and political context in Volume II. The Western world, he argues, has succumbed to what Friedrich von Hayek famously termed the fatal conceit — the belief that wise technocrats can manage complex economic and social systems from the centre. Whether dressed in the language of industrial policy, environmental planning, social-justice objectives or ‘strategic sectors’, the conceit remains the same: government knows best. Reality repeatedly proves otherwise.

The UK’s ongoing delusion that Net Zero-driven central planning will deliver prosperity is the most glaring example. Britain, uniquely in the developed world, has legislated itself into an energy trap where its own abundant onshore and offshore gas reserves lie unused while it imports gas from the US and Qatar at multiples of domestic cost. Nuclear power — the cleanest, densest, most reliable source of energy known to man — is regulated to the point of paralysis, with new reactors costing four to five times what they cost in South Korea or the UAE. The result? Soaring electricity prices, energy-intensive industries shutting down, blackouts looming and vast wealth transfers from households to subsidised renewables (wind, solar and batteries).

Meanwhile, China — the world’s industrial superpower — approves the building of two coal plants a week and continues to dominate solar and wind energy supply chains. Yet Britain blithely continues punishing itself in deference to a global virtue-signalling contest it cannot possibly win.

This is not merely bad policy. It is suicidal policy.

Immigration, Education, Planning — The Structural Roadblocks

Appendix A of Volume I offers one of Moynihan’s most candid interventions: his brief discussion of education, immigration and planning. Here he notes problems so entrenched that no government of the past 30 years has dared to confront them.

Teachers’ unions have captured the education sector, ensuring that reforms serve their interests rather than those of children. Mass immigration — which the OBR insists is always an economic good — is revealed as a fiscal and infrastructural burden given the UK’s high-welfare model. Moynihan is clear: the gross inflow matters more than net migration. Highly skilled, high-earning Britons are leaving, replaced by low-skilled dependants drawn to generous social benefits. A country cannot grow when its most productive citizens depart and its least productive arrive.

Planning is the final disaster. From housing constraints to bans on drilling, Britain has wrapped itself in environmental protections and NIMBY dogmas that strangle economic dynamism.

To implement any of the reforms he recommends, Moynihan argues, the UK would have to leave the European Convention on Human Rights and rewrite its equalities legislation. The likelihood of this under the present Labour Government is, in his view, vanishingly low.

A Blueprint for Renewal — If We Can Escape Our Doom Loop

The final chapters of Volume II lay out Moynihan’s practical programme for recovery. It is both radical in its implications and refreshingly simple in its execution:

• Shrink the state
• Cut taxes
• Slash regulation
• “Let free markets thrive, let free trade flourish and let sound money prevail”
• Restore the sanctity of contract, competition and price signals

This is not a call for libertarian utopia. It is a call for normalcy. It is a call for Britain to rediscover the source of its past greatness — the conditions that, for two centuries, made it the richest nation on Earth.

But Moynihan ends on a sober note. He doubts that any British government will adopt these measures absent a genuine crisis. The political culture has drifted too far towards state-dependency, bureaucratic interests and Left-wing moral panics. The media, universities and quangos tilt overwhelmingly towards bigger government and more regulation. A Thatcher-style renaissance may require something akin to the late-1970s — a moment when the collapse becomes too large to ignore. Bond markets are watching nervously, with 30-year borrowing costs now at their highest levels since 1998, as already noted.

Some suggest that the collapse of sterling followed by an IMF-led bailout may be that moment. If so, the next leader of Britain would do well to emulate Margaret Thatcher’s famous act — slamming Hayek’s Constitution of Liberty on the Cabinet table and declaring, “This is what we believe.”

Except this time, Hayek will not be enough. If Hayek provides the theory, Moynihan provides the operating manual. Any leader seeking to steer Britain out of its doom loop must have Return to Growth at his or her elbow.

Jon Moynihan has written what is arguably the most detailed, clear-eyed and practically grounded analysis of Britain’s economic malaise in decades. His two-volume Return to Growth is a sweeping indictment of the social-democratic model and a masterclass in applied political economy. It is written not by an academic priesthood member but by an astute outsider who sees clearly what insiders have forgotten: that prosperity is created by individuals, not governments; that innovation thrives under freedom, not central planning; and that enduring national strength requires humility, restraint and trust in markets — not hubris, bureaucracy and moral crusades.

As Britain enters what may prove to be the most consequential period since the 1970s, the timing of Moynihan’s intervention could not be more critical. That the Labour Government will hear him is doubtful. Whether the British public will, when the crisis bites, is another matter entirely.

One hopes that when the reckoning comes — as it surely must — there will be a leader prepared to take up Moynihan’s blueprint and chart the way back to growth.

Dr Tilak K. Doshi is the Daily Sceptic‘s Energy Editor. He is an economist, a member of the CO₂ Coalition and a former contributor to Forbes. Follow him on Substack and X.