Britain's Emergency Playbook

Break Glass Before The Fire

There is a document circulating in Westminster that nobody in the government wants to talk about. It is called In Case of Emergency, Break Glass, and it is published by the Centre for a Better Britain. It is written by serious people, a former head of risk for a $100 billion asset manager, a fixed income chief investment officer at RBC BlueBay, a former TaxPayers’ Alliance research head, with a foreword from Sir John Redwood. It is not a pamphlet. It is a crisis manual. And the very fact that it has had to be written tells you something deeply unsettling about the condition of this country. It b sets out what must happen,
“The task is to restore confidence - not only in the government, but in the belief among bond holders that other holders will also remain confident.”
Not for it the blythe, brain free self-confidence of Andy Burnham’s acolytes about the markets having to, “have to fall in line”.

The paper’s central argument is not especially controversial in the City. The UK is carrying public sector net debt approaching £3 trillion. It is paying more than £100 billion a year in debt interest alone, more than it spends on defence or housing. It is borrowing not merely to fund public services, but to pay the interest on what it has already borrowed. The Bank of England, in one of the more quietly scandalous facts buried in this report, is in the process of losing taxpayers an estimated £257 billion through the active sale of gilts at large losses under its quantitative tightening programme. Every year, the Treasury writes a cheque to the Bank of England for over £20 billion to cover those losses.

Read that again. The British taxpayer is subsidising the Bank of England’s own mistakes, year after year, to the tune of £20 billion.

The paper does not scaremonger. If anything, it is almost too measured, too gentlemanly in its tone. It is not predicting a crisis. It is saying that one is plausible, that the underlying conditions are ripe, that several plausible triggers exist, and that if one fires while the government has no playbook, the consequences could be severe. The triggers they identify are worth sitting with: a failed gilt auction; a credit rating downgrade forcing index-tracking investors to dump UK bonds; contagion from a French sovereign debt crisis; a change of Prime Minister or Chancellor towards someone less fiscally credible, (hard to believe that is possible, but we are talking this Labour Party); a sharp dollar rebound pushing up import costs; or simply the accumulating weight of markets concluding that the numbers no longer add up.

The most newsworthy element of this paper is not the crisis scenario itself. It is the specific menu of spending cuts the authors believe could stabilise the position, a menu that is detailed, costed, and politically deliverable. Not since the early days of the Coalition government has anyone put such granular numbers on the table, and even then not with this level of financial market sophistication behind them.

The headline items deserve attention. Stopping the Bank of England’s active gilt sales would save over £10 billion a year immediately. Introducing a tiered system for reserve remuneration, as the ECB and Bank of Japan already operate, saves a further £14 billion in year one. Together, those two measures alone, requiring nothing more than decisions by the Governor and the Chancellor, would knock nearly £25 billion off the annual burden. That is serious money, achievable within weeks, with no impact on a single public service.

Beyond that, the paper argues for returning civil service headcount to 2019 levels, from 516,000 to 413,000, a reduction of 102,000 posts that, it is worth noting, would represent a return to a size the state managed perfectly well six years ago. The productivity case is overwhelming: public sector productivity has fallen by over four percent since 2019 despite vastly increased spending. We are paying more people to do less. That is not austerity. That is waste, and the paper is right to name it plainly. Would it mean strikes? Yes probably, but if the messaging is write the general public would support, the Government, not the activist trade unions.

The welfare numbers are the most sobering of all. Total claimants across all categories have risen from under four million in 2019 to over six million today. Personal Independence Payment claims have nearly doubled, from just over two million to almost four million. Disability and incapacity benefits for working-age adults have risen from £34.6 billion to £53.9 billion, a 56 percent increase in six years, with no corresponding improvement in public health outcomes. More than half of the working-age population now receives benefits exceeding the taxes they pay. This is not a welfare state. It is a welfare economy, and it is eating itself.

There are aspects of the paper one might contest. The net zero section, while directionally correct in identifying the cost burden, sometimes conflates fiscal savings with growth projections in ways that require careful unpacking. Extending the net zero target from 2050 to 2060 is presented as saving £5 billion annually in 2029-30, but the assumptions behind private sector investment displacement deserve more scrutiny than they receive here. Similarly, the proposal to mandate that ISAs invest in UK securities to stimulate domestic gilt demand has a mercantilist tinge that sits awkwardly with the paper’s otherwise liberal instincts on markets. Forcing savers to buy government debt is a form of financial repression, and it ought to be named as such even when the fiscal case is pressing.

But these are quibbles at the margin. The core of the paper is correct, and its most important chapter may be the final one: what not to do. The Labour government’s instinct in the face of fiscal pressure has been to reach for the tax lever. It has already raised National Insurance on employers, taxed non-doms, applied VAT to private school fees and is hunting down farmers in their fields. The Chancellor is now widely expected to raise further taxes in her autumn statement, with wealth taxes, property levies and pension taxes all reportedly under consideration. The paper makes the case, clearly, with evidence, that further tax rises in an economy already carrying a post-war record tax burden would be actively counterproductive. Higher employer taxes suppress employment. Wealth taxes accelerate capital flight. Bank taxes are passed directly to consumers through higher borrowing costs, suppressing exactly the private sector demand the economy needs to recover.

The paper’s authors are too diplomatic to say it directly, but the implication is clear: Rachel Reeves is pursuing a policy that risks making the crisis she fears more likely, not less. Markets have noticed. Long-dated gilt yields have been rising for most of 2025 even as the Bank of England has been cutting interest rates, a dissociation that signals precisely the kind of underlying distrust the paper warns about.

The question the paper ultimately poses is not an economic one. It is a political one. These reforms, the civil service reductions, the welfare tightening, the Bank of England adjustments, the net zero rephrasing, are all achievable. They were, in many cases, the settled common ground of British economic management not long ago. The question is whether any government has the nerve to implement them before a crisis compels it, or whether, as the authors quietly and rather despairingly note, “even among policy experts there is growing recognition that much of what needs to be done will not be attempted until a crisis compels it.“

That sentence should haunt anyone who reads it. Because what it describes is not a failure of economics. It is a failure of political will. And in a democracy that has spent six years lurching from one emergency to another, we should not be sanguine that the compulsion will arrive in time, or in a form we would choose.

Break the glass now, or wait for someone else to break it for you. That is the choice. And this paper, to its credit, has at least had the honesty to say so.