John Healey has been warned that higher public spending will not automatically translate into economic expansion. The caution came from Alexandra Depledge, founder of the property start‑up Resi and the newly reappointed entrepreneurship adviser to the Chancellor.
Depledge posted on LinkedIn that ministers should focus on unleashing private‑sector productivity rather than relying on additional spending or policy announcements. She noted that scale‑up firms represent roughly 0.6 % of UK SMEs yet generate about 55 % of small‑business turnover, arguing that "growth doesn't happen because the government spends more or announces more. It happens when businesses become radically more productive, and a small fraction of them do most of the work."
The remarks arrive as Andy Burnham, who has led the government since July, pushes a platform of greater public control of utilities and regional devolution, positioning these moves as growth drivers. Depledge, who previously served under former Chancellor Rachel Reeves, says the focus should instead be on building more globally‑scalable firms.
Healey faces mounting pressure ahead of his first budget on 28 October, with calls for increased defence spending and measures to ease household cost‑of‑living pressures. Both Burnham and Healey have signalled that further tax hikes remain on the table, including possible levies on capital gains, banks and oil‑and‑gas firms.
Former Goldman Sachs executive Lord Jim O'Neill, an adviser to Burnham, warned that raising capital‑gains tax could deter entrepreneurs from staying in the country. "It will force even more genuine risk‑takers to be discouraged and think about either moving or not doing as much of this kind of thing as they've done," he told LBC.
During Prime Minister's Questions, Burnham declined to rule out additional tax rises or borrowing, noting that the government is already "taking the action needed to get debt down." Opposition leader Kemi Badenoch pressed the issue, highlighting the political stakes of the upcoming budget.