To help answer the defining the question of the Labour government, Spotlight reached out to experts working across the third sector.
We need to rethink the way that we invest
Growth must mean more than a simple rise in GDP. Decades of underinvestment, rigid fiscal rules, and an overreliance on financial markets have left communities across the UK struggling, while the richest continue to amass wealth. We need a new model.
First, we need to change how we invest. The current fiscal rules are holding back the investment needed in public services, infrastructure, and green industries. We need an approach that allows for strategic public investment without arbitrary constraints – this would ensure growth benefits people and the planet, not just financial markets.
Reforming the Office for Budget Responsibility (OBR) is crucial – its narrow assumptions about government spending limit the potential for policies that could transform our economy. If we change the way the OBR assesses fiscal space, we could unlock billions for investment in renewable energy, housing, and transport, which in turn would create jobs and strengthen communities.
The government’s National Wealth Fund (NWF) needs to be a much stronger economic actor. If we follow the example of the KfW bank in Germany, the NWF could raise £100bn over the next decade and drive the transition to a low-carbon economy.
The Bank of England must also play its part. Today, monetary and fiscal policies are pulling in opposite directions. The Treasury is expected to drive growth, yet the Bank’s hikes in interest rates make borrowing more expensive and squeezes incomes. We need greater coordination between the Treasury and the Bank.
Lastly, growth must be rooted in communities. Too much power is in London and the financial sector. We need to shift investment to local economies, cooperatives, and social enterprises that keep wealth circulating. Growth should mean better lives for everyone – not just bigger profits for a few.
Chaitanya Kumar is head of economic and environmental policy at the New Economics Foundation.
Improved workers’ rights will fuel the economy
Economic growth is rightly a national priority. But for most people in this country, GDP rising means little if improvements in their day-to-day lives aren’t seen.
That’s why the government’s Make Work Pay agenda is so important. Creating more secure jobs is good for both working families and the economy.
Improving employment standards boosts productivity and innovation – both of which contribute to long-term growth. We need a new approach in this country where good jobs and rising incomes are recognised as growth drivers and measures of success. That’s why the Employment Rights Bill is integral to the Labour’s Plan for Change.
The bill includes important measures such as protection from unfair dismissal and access to sick pay from day one, and a ban on zero-hour contacts. These will deliver more security for workers and help shift our growth rates in the right direction.
When employment standards are higher, investment rises. Retention goes up, and companies benefit from accumulated skills and knowledge. Costs from turnover and retraining reduce. Employment rates also improve.
If more carers, parents, disabled people and those with health conditions are to move into, and stay in, work they need stable, decent jobs and incomes they can rely on.
Stronger rights at work can drive up labour market participation, improve employee health and productivity, and give working people higher living standards and secure incomes. Labour’s workers’ rights plans are common sense reforms that will bring the UK back in line with the international mainstream.
We cannot continue with the same failed status quo. That has been tested to destruction over the last 14 years. It’s time to make work pay.
Paul Novak is the general secretary at the Trades Union Congress.
Elevating our regions is the best bet for the UK
Growth is anchored in place. We need growth to lift communities and reduce regional inequality; the benefits must be shared and felt by people in their day-to-day lives. This is our best bet for UK growth.
Successive governments have operated with institutional and cultural defaults that have served too few people, concentrated wealth and bred political disillusionment and distrust. When governments have prioritised investment in already productive places, this has implied we should accept that some can be left behind. The promise that benefits will be redistributed across the country when the south-east grows rings all too hollow.
Growth led by our regions and which supports people’s lives will require interlinking and sustained interventions.
The government needs to correct the unequal distribution of public spending. In transport alone we found that the North should have received around £86bn more over a decade if matching the per head transport investment in London.
Metro mayors must be at the centre of the government’s growth plans. Mayors need the levers and financial heft to take charge of UK industrial strategy and make different decisions to government whether on transport, skills or housing in their places. This must be underpinned by support for public services delivered by local government and community organisations.
There are plenty of “big bets” outside of the south-east that have economic potential, too. Government should commit to substantial projects in the north, such as Northern Powerhouse Rail and education, housing and infrastructure. This long overdue action would signal a change of course.
Our economy needs to better serve its people. There is no national growth without regional growth and thriving regions are our brightest bet.
Zoë Billingham is the director of the IPPR North think tank.
This article first appeared in our Spotlight Igniting Growth supplement of 14 March 2025.
Content from our partners
Related
