As they entered office in mid 2024, one thing was certain about Labour’s plan for growth: they did not have one. There was no recipe book, and few raw ingredients for growth were in place. Apart from a shopping list wistfully titled “securonomics”, the kitchen at No 11 was bare.
With growth being the government’s primary mission, the absence of a growth plan has taken many of us by surprise. It is among the reasons why the government has been hostage to repeated misfortune over its first few months, buffeted rather than shaping events. This black hole, rather than the fiscal one left by the Tories, has mattered most.
Over time, some growth-plan ingredients have started taking shape. Planning reform and housing were first out of the traps. A good AI action plan and strategy for tackling labour market inactivity were followed by a white paper on devolution and a green paper on industrial strategy. Last month, Chancellor Rachel Reeves’ Oxford speech signalled a grand project gearshift in the growth agenda.
While directionally sensible, these announcements leave us well short of a growth strategy. Don’t take my word for it. Neither the Office for Budget Responsibility (OBR) nor financial markets – the economy’s judge and jury – have shifted their views on underlying UK growth. If anything, the balance of risks to growth has shifted to the down side, as the Bank of England’s recent downgrades demonstrate.
The Chancellor’s major announcements have been reheated leftovers from the Treasury’s freezer – from winter fuel allowances to third runways. And as the current debate around fiscal headroom shows, when faced with a hard choice, the Treasury’s fiscal-first instincts prevail, with lower-growth projections risking a tightening of the fiscal stance, worsening growth prospects.
Other aspects of the growth plan are too green to give confidence about delivery or are missing entirely. An example would be industrial strategy. The government’s green paper was a middling-quality undergraduate essay, and without government money as lubricant, the leap from academic words to practical action is large.
More fundamentally, the industrial strategy leaves most of the country out. In many regions, 80-90 per cent of the workforce would not be covered by the eight selected sectors. Most employment is, and will continue to be, in the foundational economy – retail, care, distribution, construction.
What is true at the sectoral level is true at the spatial level too. The Chancellor’s Oxford speech offered little for anyone living north of Cambridge or west of Oxford. It was a standard Treasury-issue Golden Triangle speech.
Yet, the government has no hope of hitting its growth target unless all points on the UK growth compass are pointing due north. And what’s the point of growth that fails to lift the lived experience of most of the country? The government heralded a “Devolution Revolution” in its white paper last year. It was no such thing – rather a modest increment to local spending powers with nothing on fiscal powers. The UK will remain the most centralised nation in the Western world. Policy paternalism (the belief that those outside the M25 cannot be trusted with money) risks derailing local growth and the national growth mission.
And finally, to the largest policy gap of all – skills. Most businesses say it’s their biggest barrier. All announced initiatives will fail without a skills transformation. How can we build 1.5 million homes, a third runway or supercharged sectors without architects, surveyors, builders, electricians and technicians? Growing your own skills is a generational endeavour, and the government has yet to plant a seed.
Against the backdrop of a flatlining economy, the dog’s breakfast of growth initiatives has seeded more frustration than expectation. There is still time for a coherent growth strategy to emerge, but early signs have been discouraging, and the scenes in No 11 have been more Kitchen Nightmares than MasterChef.
This article first appeared in our Spotlight Igniting Growth supplement of 14 March 2025.
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