Helen Miller is poring over reams of old printer paper. “This is what it used to look like to do research,” she says excitedly, spreading a giant worksheet, covered in calculations, over the table in her London office. An analyst was “cleaning data here… to do some new analysis” back when the Institute for Fiscal Studies (IFS) was still getting used to computers. Its technology has evolved somewhat since then, but its obsession with sums—and its determination to check that the government’s add up—remains identical.
When we speak, Miller, 39, is about to take on leadership of the IFS, where she has spent her whole career. She follows Paul Johnson, a respected number-cruncher who held the post for 14 years. As director, Miller will oversee research with considerable influence on the UK’s political debate. The Labour government is desperate to demonstrate its fiscal credibility and is twisting into political contortions to do so. The IFS’s verdict—Miller’s verdict—will serve as an authoritative judgement on whether its tax-and-spend policies make sense.
So is the UK’s fiscal position a happy one? “No,” replies Miller, instantly. “Does anyone think it’s a happy one?”
“We have a combination of taxes rising to historically high levels and the size of the state increasing,” and yet there are “problems in public services. You have to do quite a lot just to… stop the problems”. Theoretically, higher taxes should enable the UK to fund a functioning state; but growth is so meagre that there is “no end in sight” to our fiscal challenges. “We now spend £100bn on debt interest,” Miller adds, “and that means you’ve spent quite a lot of money on stuff that’s not doctors and teachers and nurses.”
What should be done? “We invest less than other countries,” Miller laments. We need more funding for “science, technology, research and development” to “get more innovation going”. And infrastructure? “I just can’t believe the UK has the best -infrastructure we could have,” she says. “I mean, how can that possibly be true?” Miller is a tax specialist: her other plea is for common-sense reforms to the tax system, which is currently “a big mess”. Fixing that could help unlock growth, and then “we’re all better off”.
So the challenge is not insurmountable. But “politically, we don’t know how to solve it”. Politicians aren’t always upfront with the public and retreat into a short-termist comfort zone: “I absolutely hate the word ‘headroom’—I’m going to ban it,” jokes Miller. Rachel Reeves’s space to manoeuvre against her fiscal rules “is in some sense trivial compared to the underlying problem: what if our growth rate stays this low for the next 20 years? How is that going to shape life in the UK?” And “as the population ages, how are you going to deal with that? How are you going to trade off between ageing, net zero and growth? All those big-picture questions, we don’t ever get to debate those properly”.
It isn’t just Labour that shies from uncomfortable issues. The Reform party, currently leading in the polls, seems to offer “motherhood and apple pie”. But the tax cuts it proposes would cost “north of £50bn, could be £90bn… the equivalent of a few departments. I mean, that’s a lot of money,” says Miller. Nigel Farage’s party needs to spell out “what’s going to get the axe”—otherwise, Miller says, it is not having a realistic conversation.
Miller will now be speaking these hard truths from the director’s chair. She may get pushback. The IFS is proudly orthodox in its approach, and sometimes accused of underpricing how radical policies might benefit the economy. It’s a criticism levelled even more vehemently at the Office for Budget Responsibility, a government body which produces its own assessments of the public finances. More broadly, politicians may simply find the IFS’s assessments inconvenient.
“I’m sure that we annoy politicians sometimes, which is probably as it should be,” says Miller. As long as the numbers are accurate, she can handle it. “I’m excited,” she tells me. “And I feel the weight of responsibility.”
