Emma Revell is External Affairs Director at the Centre for Policy Studies.
Growth is probably the most overused and under-delivered word in British politics.
Keir Starmer came to office promising that growth would be the defining mission of his new government. In the 18 months running up to the election, Labour went out of its way to woo business, to convince the people who actually make money and create jobs in this country that the party had moved on from the socialist rhetoric of Jeremy Corbyn and John McDonnell. That their companies and their sectors would be safe in Rachel Reeves’ hands.
And why shouldn’t those bosses take the punt?
The Conservatives may think of themselves as the natural party of business and entrepreneurship. But their record of delivery after 14 years in office hadn’t filled anyone with confidence.
There were moments of ambition – supply-side reform, planning liberalisation, attempts at tax competitiveness, many of which had roots in the work of our team at the Centre for Policy Studies. But they were too frequently abandoned at the first sign of political resistance. Meanwhile, the public sector continued to grow almost unchecked.
The result was a kind of economic no man’s land: a state still too large and intrusive, but not effective enough to justify its scale; a tax burden at historic highs, but without the growth to support it.
Since the global financial crisis, growth has been held up as the solution to all our problems: the answer to stagnant wages, creaking public services, and a rising cost of living. And it would be, if we had done any of the things necessary to allow it to happen. Nearly two decades on, however, none of the parties that have served in government have covered themselves in glory when it comes to delivering on their economic promises.
Growth, especially to anyone under 40 who’s barely seen even a hint of it in their adult lives, feels almost mythical. Politicians seem to view it as an aspiration rather than as the core of a programme for government.
That is why this year’s Margaret Thatcher Conference on Monday – the CPS’ annual set-piece event – could hardly be better timed.
This year’s theme is Prosperity. Not as a buzzword, but as a serious policy objective.
Because if the last 20 years have taught us anything, it is that prosperity cannot be taken for granted. It must be built deliberately, consistently and, crucially, by the private sector – often in the face of political headwinds and resistance.
The CPS has long argued that growth is the product of choices. Choices about tax, regulation, energy, planning, migration, and the role of the state. Get those choices right, and economies flourish. Get them wrong and stagnation follows.
Britain, too often, has got its choices wrong – or rather, refused to make them at all.
Consider the tax burden. At its highest level in 70 years, it reflects a political consensus that has drifted away from rewarding work, investment, and risk-taking.
Raising taxes may be politically expedient in the short term, but it carries long-term costs – not least in discouraging the very activity on which growth depends. That is why we are seeing such high numbers of Brits with high earning potential leave the country, taking their businesses and their skills elsewhere. It’s also why we’re seeing it become much harder for young people to find work, because the tax wedge on employing people on the minimum wage – like those trying to get into work for the first time – is being slowly ratcheted up.
Or take regulation. It has accumulated to the point where it acts as a brake on innovation and expansion. Businesses, particularly smaller ones, face a thicket of rules that consume time and resources better spent creating and selling the goods and services consumers actually want to buy.
Then there is planning – the perennial Achilles’ heel of the British economy. Successive governments have acknowledged the need for reform, particularly to unlock housing and infrastructure. Yet meaningful change has proved elusive, repeatedly sacrificed to short-term political pressures.
Or entrepreneurship. The UK is rightly celebrated as a hub for start-ups. But scaling those businesses into global leaders remains disproportionately difficult. Access to growth capital, regulatory barriers, and a tax system that can penalise success all play a role. Our recent paper ‘Patently Absurd’ highlighted how, despite being home to many of the world’s leading universities, Britain’s ability to turn ideas into useful business output is actually falling.
These are not new problems. But they are problems that demand new urgency.
The Margaret Thatcher Conference is designed to provide exactly that: a forum where the debate moves beyond diagnosis to prescription.
The conference will bring together business leaders, policymakers, and thinkers who understand that growth is not delivered by speeches alone, and rarely by politicians at all. We’ll be joined by figures like Currys’ CEO Alex Baldock and Gymshark co-founder Ben Francis of Gymshark to hear straight from those whose every day is devoted to growing their businesses.
Our emphasis is on bridging the gap between those who make decisions and those who live with their consequences. That matters, because too often policy is made in isolation from the realities of business, and business operates in spite of – rather than because of – the policy environment.
If Britain is to break out of its low-growth trap, that has to change.
The Conservatives, for all their instincts, failed to sustain a coherent pro-growth agenda. Too often, they retreated into caution or contradiction – trimming one tax while raising another; championing enterprise rhetorically while constraining it in practice.
Labour, meanwhile, risks erring in the opposite direction: prioritising stability to the point of inertia.
While markets may welcome predictability, they also require dynamism. Without a willingness to challenge entrenched interests and rethink the role of the state, growth will remain elusive.
The danger is that we settle into a new normal of low expectations – where modest growth is celebrated, and more ambitious reform is dismissed as politically unrealistic.
That would be a profound mistake.
Because ultimately, prosperity is not a mystery. It is the result of policies that encourage work, reward innovation, and allow businesses to grow. The founders, funders and CEOs speaking at the Margaret Thatcher Conference next week know what is needed to move beyond talking about growth and start delivering it.
Because they do that every day.