John Healey's entrepreneurship adviser, Alexandra Depledge, has warned that economic growth cannot be achieved solely through government spending and policy announcements. Her comments come as Chancellor Healey and Prime Minister Andy Burnham are developing their first budget.
Depledge, founder of property start-up Resi and reappointed entrepreneurship adviser to the Chancellor, wrote on LinkedIn that ministers should empower the private sector rather than relying on increased spending and policy announcements. She previously served in the same role under former Chancellor Rachel Reeves.
Prime Minister Andy Burnham stated this week that his growth plan would be "driven with the full authority of the very centre of government." Since July, Burnham has pledged to increase "public control" of utilities and claimed that economic power became too privatised in the 1980s. He has also suggested that devolving power to regional governments could boost growth.
However, Depledge argued that ministers should instead concentrate on increasing the number of scale-ups in Britain to drive economic growth through the private sector. She noted that scale-ups, while making up approximately 0.6% of UK SMEs, generate around 55% of small business turnover. Depledge added, "Grow the number of firms capable of scaling globally from Britain, and the rest of the economy grows around them."
Chancellor Healey is facing various economic pressures as he prepares to deliver his first Budget on 28 October. He is reportedly facing calls to increase defence spending and announce new support for households dealing with the cost of living. Both Burnham and Healey have not ruled out further tax increases in the Budget, with reports suggesting they are considering new levies on capital gains, banks, and oil and gas companies.
Lord Jim O'Neill, a former Goldman Sachs executive who advised Andy Burnham on economic policy, stated he expects the government to raise capital gains taxes. However, he also said this would be the "last thing that should be happening when we want more growth," warning it could discourage entrepreneurs.