Moving money, multiplying money
This is the heart of the issue. Not all public spending is equal. Our media has an unhealthy tendency to equate the government’s finances to household budgeting. This isn’t only unhelpful, it is also completely inaccurate. In fact, it’s much more useful to think of a country like a business. When you invest smartly you make more money.
Some interventions cost money, but generate far more economic activity than they consume. In fact, new research shows that investing £11billion in social housing today, wouldn’t just provide homes for 90,000 families, but add over £50billion to the UK economy over 30 years. And when you factor in savings to the social security budget, the impact on employability, the boon to the construction industry and associated tax receipts, it would be a net benefit to government coffers of nearly £12 billion. Other targeted spending on childcare, health and education are known to have similar “multiplier” effects where each pound invested generates even greater returns for the state and the national economy.
It’s obvious really, when you put money into the pockets of ordinary people, they spend it locally, boosting growth. When you invest in keeping people healthy and happy, they’re far more productive. When you upgrade national infrastructure, you strengthen the foundations of the economy itself. And when you take money from unproductive wealth— the hoarded fortunes of the ultra‑rich, the profit margins of tax‑dodging multinationals siphoned off to shareholders, the offshore accounts of the corrupt— and redirect it into households, public services, and local businesses, the return is greater still. That is how you rewire an economy.
These early policies like the bus cap and VAT reduction are welcome, but they are low‑hanging fruit which do nothing to change the design of our broken economy. To truly put an end to the cost of living crisis, and breathe life into communities hollowed out by years of underinvestment, the government will need to go much further: investing in all regions of the UK to share prosperity and create jobs, restoring the NHS, expanding free childcare, improving public transport, building affordable council housing, and bringing down energy bills. We’ve shown how the UK could raise £50 billion through fair taxes that deliver for ordinary people rather than holding them back — a blueprint for a fairer, more dynamic economy. The question now is whether Healey is likely to follow it?
We just don’t know. And we aren’t able to judge Burnham and Healey’s approach just yet. Time will tell. But importantly they are not operating in a vacuum. Remember, it’s also up to us to shape what sort of Prime Minister and Chancellor they’ll be. Thank you for being part of the People’s Lobby, and helping us wield our collective power to hold the new government accountable. We already know that one of Burnham’s biggest influences and closest allies is pulling for a Wealth Tax, and Burnham has repeatedly refused to rule it out. So now is the time to lift our voices and increase the pressure on Burnham to make the changes we need.