Investing in Britain, crashing scooters and eating bugs Top of the charts 6 June 2025 Ruth Curtice Morning all, I’m writing this morning from drizzly York, where I’ve been invited on a stellar panel for the Festival of Ideas. Hoping to see TOTC readers in attendance! As you’re all aware, there’s only five more sleeps until the Spending Review. Those of you keen to learn more about that can catch me live in living colour on a Panorama special, catch up on mine and James’s run down of what to watch out for, or keep reading for more below… For reads this week we are asking how to get growth, who’s hurt in a trade war and… who’s willing to eat bugs. Have a great weekend, Ruth Chief Executive Resolution Foundation Legislating for growth. Red tape deters growth… right? Well this analysis of American laws between 1965-2012 counted legal provisions to show that higher legislative output leads to more economic growth. How? The authors theorise that detailed legislation reduces “uncertainty about enforcement, which deters businesses from making investments”. The effect isn’t huge – they found that a 10 per cent increase in legislative flows saw state GDP per capita growth increase by 0.15 percentage points. This effect is limited to economic (rather than social) legislation and is strongest when existing legal detail is limited. So it turns out we just need to get Parliamentary productivity into overdrive….maybe. Who wins the trade war? Are there any upsides to a trade war? This research finds that discriminatory tariffs reduce the number of foreign rivals, with less productive domestic companies able to increase their market power and emerge as ‘winners’. But overall, tariffs still result in less trade, higher prices and fewer products for consumers. Ultimately, the authors find much of the economic fallout from trade wars comes not just from tariffs themselves, but from the ripple effects of firm entry and exit. When large, productive exporters leave a market, or new ones move in, it reshapes product variety, pricing power, and competition. The real winners? Countries that manage to stay neutral in a bilateral trade war, as they snap up the market share lost by their trade-warring neighbours. Bug boys. Finally, someone has found an answer to the question we’ve all been asking since our knees were freshly skinned by playground gravel. Who eats more bugs, men or women? According to this (inexplicable) research, women are less keen. The experiment paired up participants (374 Japanese people), offering them bugs to eat and letting them choose how much to consume, in the knowledge that their partner would finish off the rest. Women experienced more disgust, and men generally chose to eat a higher proportion, with an even higher proportion when they were partnered with a woman. Is this more incontrovertible evidence of our intellectual superiority? Or the persistence of chivalry? Hard to say – but while men may be from Mars, women certainly aren’t from Venus (Fly Traps). Scoot scoot. Everyone has strong opinions about recently ubiquitous e-scooters. But what do we know about the risk factors for scooter crashes? This research from Sweden analyses real time ride data to find out. They looked at just 17 scooters within a 4 km² area in Gothenburg, but that amounted to nearly 7,000 trips by just under 5,000 riders over 18 months. Some risk factors are to be expected – travelling in groups, crossing intersections and travelling on a Friday or Saturday evening all emerged as some of the riskiest factors. But leisure trips (as opposed to commutes) and travelling at low speeds also emerged as similarly dangerous. Tell your teens to look away now – single handed riding and phone use were only medium-level risk factors. A big blind spot in the study is that they did not have data on levels of alcohol intoxication, although that seems a likely culprit for the higher crash risk on weekend evenings. Scoot safely! Something for the weekend? | Hey big spender! Next Wednesday, Rachel Reeves will deliver the first multiyear Government Spending Review since Rishi Sunak’s in October 2021, when pandemic travel restrictions were still in place. As others have noted, the Government faces conflicting expectations between public demands for investment in public services and the tight fiscal constraints they have continuously recommitted themselves to. Despite a challenging backdrop, accusations of a return to austerity feel a little unfair when you consider that (in levels terms) austerity will essentially be undone by the end of this Parliament. The Government has announced an additional £400 billion in public spending since the election – but that doesn’t mean everyone will emerge happy. The main public priority for spending is the NHS – seven-in-ten think the Government is not spending enough. Public sentiment stands alongside a strong historical precedent for continuous spending increases, which average 3.6 per cent per year since 1949. But the NHS is now so big this one choice will dominate the maths for everyone else. A generous settlement would come at the cost of further cuts to those long-suffering ‘unprotected’ department budgets. One hot-button issue to watch is social housing. Investment here is consistently popular with the public (seven-in-ten Brits supported it last year) and aligns with Government goals on housing affordability and security. However, it’s capital-intensive and slow to deliver results. Rumours suggest this hasn’t been the easiest bit of the spending review to nail down… Whatever the final settlement next week, political ambition will struggle with fiscal realism. This will be a tricky balancing act between keeping ministers happy and targeting support where it’s most needed. Tune in to hear our assessment first thing Thursday morning. Chart of the week The Spending Review isn’t just about day-to-day public services, the Chancellor will also allocate over £100 billion of additional public infrastructure spending (such as the trailed £15 billion of transport projects). That means maintaining public investment at a respectable 2.5 per cent of GDP. But given Britain’s acute infrastructure needs after decades of chronic-underinvestment there are lots of calls on the additional cash. This means the Chancellor will need to trade-off prioritising economic infrastructure projects (rail networks, energy grids and R&D) against social infrastructure (hospitals, prisons and affordable housing). Chart of the Week (from this report) shows that economic projects have been winning this trade-off hands down since 2010. The capital budgets for Business and Trade, Energy Security and Net Zero, and Science, Innovation and Technology have grown by over 150 per cent since 2010. In sharp contrast, the Education budget for this kind of spend has been cut by over 50 per cent. No wonder some schools were literally collapsing last year…The Spending Review offers an opportunity to tilt this balance. For example, a tighter settlement on day-to-day health spending could be offset by more investment in equipment like hospital beds, MRI scanners and IT to help make the NHS more productive. And if more affordable homes are built in the right places – like major cities – it should help them to expand their economic footprint too.
