This report shows that cuts in spending in the midst of a recession are a bad idea and that any budgetary shortfall can more sensibly be financed through tax reform which makes the current system fairer. Britain has moved from a credit crunch and an economic recession caused in large part by the excesses of bankers to a public expenditure and public services crisis. Those at the top have been bailed out by the public, while those at the bottom will have pay and benefits frozen and services cut. Overall tax incidence in Britain is currently regressive: taxes fall more heavily on the very poor than on the very rich, contributing to growing income inequality. This report challenges the economic orthodoxy of the main political parties by analysing the consequences of public spending cuts and the current tax regimes. It makes quantified reform proposals which would result in fair taxes, a sustained recovery and strong public services.