Executive summary

The first and most fundamental duty of a civilised state is the safety of its people.

Not just safety from overseas adversaries, or crime in the street. Economic security. A bill you can pay without going overdrawn. A house you can afford before your children have children of their own. A job that lasts long enough to plan around.

Britain guarantees none of these. Not for want of money, or land, or people who know how to build. Our nation has all of that.

For forty years we have outsourced that security to the global marketplace. We locked ourselves in a room and posted the key to a trading desk in New York. British government policy subservient to global winds.

They call it living within our means. We call it Hostage Nation.

“This is not a think-tank essay. It is an escape plan. It is about escaping four words: we can’t afford it.”

You have heard them applied to housing, to buses, to social care, to anything that would make ordinary life cheaper or safer. They arrive as a statement of fact, like a shipping forecast.

They are not a fact. They are the summary of a set of decisions, and every one of those decisions was made by somebody, in a meeting, in a building, on a date.

John Maynard Keynes said it in 1942, with the country at war and the outcome uncertain. “Assuredly we can afford this and much more,” he said. “Anything we can actually do, we can afford.” He was not claiming that money is unlimited. He was showing that the real question is can the thing be built. The financing is a decision about where the obligation sits, who holds it, and how the cost is counted.¹

Change those decisions, and ‘we can’t afford it’ stops being true.

This report makes three arguments, each building on the last.

First, the constraints are self-imposed. Britain has had ten sets of fiscal rules since 1997 and abandoned nine of them. The Treasury has appraisal methods that cannot value an asset paying back over thirty years. The Bank of England has one instrument that reaches under a third of households. None of that is a law of nature. The Truss crisis of 2022 is the case study, and it is not the story most people were told. The market did not punish ambition. It choked on a supply of government bonds the Bank of England had announced the day before.

Second, the state can fund what it builds without depending on a market that can panic. The money already exists in British hands: cash sitting in accounts earning less than inflation, and pension funds holding under 5% of their assets in British companies. Offer savers a fair, index-linked return on assets the country needs, and the finance follows. Nobody is told where to save. Anyone who prefers a different investment remains free to make it — just not with a subsidy from other taxpayers. The gilt market continues. What changes is that new investment no longer waits on a good morning in London.

When the state finances a long-lived asset on its own balance sheet, the arithmetic changes. A project that fails a contractor’s five-year investment hurdle rate can be plainly worthwhile for a country counting over thirty, because the country collects the tax, the wages, the health savings and the bills that the contractor never sees.

Third, this can be done without inflation, by building the capacity first. Skilled workers, supply chains, and an industrial base, all recruited and built before and alongside the money, not after it. Funding is released only when the capacity to use it exists. That is the discipline that makes the rest safe, and it is the part of this report that most resembles hard work.

Almost none of it needs a new law. The powers are on the statute book already, some of them for over a century.

The evidence is in the endnotes, and will add to your reading time. You don’t need it to follow the argument. It is there because every figure in this report should be checkable by somebody who would rather it were wrong.

Two hours. It’s a shorter argument than the one we have been having for forty years.