Healey’s adviser warns spending won’t drive UK growth

Alexandra Depledge, founder of property start‑up Resi and newly reappointed entrepreneurship adviser to Chancellor John Healey, used LinkedIn to argue that the UK cannot boost growth by simply increasing public spending or rolling out new policy announcements. Her comments arrive as the government prepares its first budget under Prime Minister Andy Burnham.

Why the warning matters

Since taking office in July, Burnham has pledged to bring utilities under greater public control and to reverse what he describes as the excessive privatisation of the 1980s. The administration is also weighing new levies on capital gains, banks and oil‑and‑gas firms, despite pressure from business groups that higher taxes could drive entrepreneurs abroad.

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 adviser also reminded ministers that firms classified as “scale‑ups” represent roughly 0.6 % of UK SMEs yet deliver about 55 % of small‑business turnover. She urged the Treasury to nurture these companies rather than rely on fiscal stimulus.

Government’s fiscal stance

Both Healey and Burnham have signalled they will not rule out further tax hikes in the upcoming budget, with capital‑gains tax on the shortlist. Lord Jim O’Neill, a former Goldman Sachs executive who advises Burnham on economic policy, warned that raising capital‑gains tax would “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.”

During Prime Minister’s Questions, Burnham declined to promise a tax freeze when pressed by Tory leader Kemi Badenoch, stating only that the government is “taking the action needed to get debt down.”

What’s next for the budget

With the budget set for 28 October, Healey faces a balancing act: delivering the “full authority of the very centre of government” growth plan while addressing calls for higher defence spending and household support. If the Treasury follows through on capital‑gains increases, the private sector may push back, potentially reshaping the policy debate ahead of the budget.

Analysts will watch whether the government adopts Depledge’s recommendation to focus on scaling high‑growth firms, a move that could shape the UK’s long‑term productivity trajectory.