Key facts
- Entrepreneurship adviser Alexandra Depledge warned that economic growth relies on private sector productivity and scale-ups, not government spending.
- Depledge's remarks serve as a potential rebuke to Chancellor Healey and Andy Burnham as they draft their first budget.
- Burnham's government has expressed a desire for greater public control over utilities.
- Lord Jim O’Neill cautioned that increasing capital gains tax could deter entrepreneurs and negatively impact growth.
- Andy Burnham has not ruled out further tax increases or increased borrowing.
Alexandra Depledge, entrepreneurship adviser to Chancellor John Healey, has cautioned against relying on government spending and policy announcements to drive economic growth. In a LinkedIn post, Depledge, founder of property startup Resi, emphasized that growth is achieved when businesses become more productive and scale-ups, which account for a small fraction of UK SMEs but generate a significant portion of turnover, are fostered. Her comments come as Healey and Prime Minister Andy Burnham prepare to deliver their first budget on October 28th, facing pressure to increase defense spending and support households amid the cost of living crisis. Burnham's government has previously signaled a desire for greater public control over utilities and criticized the privatization trends of the 1980s. However, Depledge's advice suggests a focus on unleashing the private sector and encouraging global scaling of British firms. Lord Jim O’Neill, a former Goldman Sachs executive and economic adviser to Burnham, echoed concerns about potential tax hikes, warning that an increase in capital gains tax could discourage entrepreneurs and hinder growth. During his first appearance at Prime Minister's Questions, Burnham did not rule out further tax rises or increased borrowing, stating only that the government was taking action to reduce debt.