Towards a (Minority) Shareholder State? The Labour Government's Fiscal Framework

Abstract This article explores the politics of the fiscal framework launched by the Labour government in October 2024. Relative to the trajectory of fiscal frameworks in the UK since fiscal rules were first introduced by New Labour in 1997, the reform represents a contradictory enterprise. The differentiated treatment of borrowing underlying the ‘stability rule’ and a newly gained legitimate avenue for public sector financial activities represent progress relative to the country's needs and Labour's promises. The new fiscal rules' shorter time horizons and continuing bias against non‐financial public investment and public corporations may prove self‐defeating. This, coupled with the government's key economic policy narratives in its first months in office, makes it difficult to think of the new fiscal framework as the cornerstone of a decade of national renewal.