Market

Public investment holdup will hurt Britain's growth, leading economists tell Reeves


Leading economists have warned the Chancellor that holding back public investment will damage Britain’s growth.

In a letter to the Financial Times, the group of eight senior figures urged Rachel Reeves to reverse plans inherited from the Tory government. 

They argued that reducing investment as a share of gross domestic product (GDP) would backfire.

Public investment: In a letter to the Financial Times, a group of eight leading economists urged Rachel Reeves to reverse plans inherited from the Tory government

Public investment: In a letter to the Financial Times, a group of eight leading economists urged Rachel Reeves to reverse plans inherited from the Tory government

Labour has pledged to spend an extra £4.7billion a year investing in energy and the green transition but that would still leave investment as a share of GDP falling.

Signatories to the FT letter include former cabinet secretary Lord O’Donnell, who served under Tony Blair, Gordon Brown and David Cameron.

Former commercial secretary to the Treasury Lord O’Neill and University College London professor Mariana Mazzucato – whose signature idea of ‘mission driven’ government inspired Sir Keir Starmer – also signed the letter.

‘The Government has inherited spending plans that imply substantial real-terms cuts in public investment over the current parliament,’ the letter said.

‘We do not see how the planned “decade of national renewal” can take place if these cuts are delivered.’

The letter added that ‘low investment leads to both a weaker economy and greater social and environmental problems’.

The Government has already faced a fierce backlash for cuts including plans to axe winter fuel payments to 10m pensioners.

DIY INVESTING PLATFORMS

Easy investing and ready-made portfolios

AJ Bell

Easy investing and ready-made portfolios

AJ Bell

Easy investing and ready-made portfolios

Free fund dealing and investment ideas

Hargreaves Lansdown

Free fund dealing and investment ideas

Hargreaves Lansdown

Free fund dealing and investment ideas

Flat-fee investing from £4.99 per month

interactive investor

Flat-fee investing from £4.99 per month

interactive investor

Flat-fee investing from £4.99 per month

Get £200 back in trading fees

Saxo

Get £200 back in trading fees

Saxo

Get £200 back in trading fees

Free dealing and no account fee

Trading 212

Free dealing and no account fee

Trading 212

Free dealing and no account fee

Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.

Compare the best investing account for you





READ SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.