12th September 2026
Britain has become accustomed to hearing rather depressing economic news.
Weak growth High borrowing costs, Rising debt, Pressure on public services, A housing shortage. Expensive energy, Businesses complaining about regulation, Defence suddenly demanding much more money.
Underneath all of it, the uncomfortable fact that Britain's economy has not been growing fast enough for many years.
So is there any reason for optimism?
Perhaps there is.
The arrival of John Healey at the centre of Labour's economic thinking does not represent a complete break with Rachel Reeves. But there are signs that the emphasis is changing.
Reeves' job was largely to stabilise the finances and create the conditions for investment. She changed the fiscal rules to allow substantially more public investment in housing, energy and transport, while insisting that day-to-day spending should ultimately be covered by taxation. She has repeatedly argued that stability is the foundation on which growth must be built.
That was understandable. Britain had emerged from years of political and economic instability, and the disastrous reaction of financial markets to Liz Truss's 2022 mini-Budget was still fresh in the minds of policymakers.
But there is a problem with stability on its own.
If the economy grows only slowly, the Government can spend years trying to balance the books without ever really getting ahead.
This is where Healey's approach becomes interesting.
From repairing the economy to making it grow
Healey's thinking appears to put much more emphasis on the idea that economic growth itself can help solve Britain's financial problems.
That does not mean abandoning fiscal discipline. It means asking a different question.
Instead of asking only how much the Government can afford to spend, it asks what can be done to increase the country's productive capacity.
That means getting houses built, improving infrastructure, speeding up planning decisions, encouraging business investment and making better use of government procurement.
It also means making sure that when the Government does spend money, more of that spending produces lasting economic benefits.
This is important because Britain does not necessarily suffer from a complete lack of money. It often suffers from an inability to turn money into completed projects quickly enough.
We can announce a railway, a nuclear project, a power connection or a housing programme. Then the planning system, environmental assessments, procurement rules, consultations and financing arrangements can take years.
By the time the project is finally moving, costs have risen and political priorities may have changed.
That is not simply a spending problem it is a productivity problem.
Defence could become part of the economic solution
Healey's background in defence makes another difference. Britain now has to spend considerably more on defence because the international security environment has changed. But that spending does not necessarily have to disappear into a black hole.
The Government's Defence Industrial Strategy explicitly describes defence as an "engine for growth". It points to more than 460,000 jobs already supported by defence and £28.8 billion of spending with UK-based businesses.
That changes the way we should think about defence expenditure. Building ships, submarines, aircraft, drones, communications systems, cyber-security equipment and other advanced technology can create highly skilled jobs and strengthen British manufacturing.
If Britain gets the industrial policy right, some of the money that has to be spent on national security can simultaneously increase the country's industrial capacity. That could be particularly important for Scotland, where defence, engineering, shipbuilding and nuclear skills already provide a substantial industrial base.
The challenge is making sure that the economic benefit reaches the regions rather than becoming concentrated in a handful of established companies and locations.
Energy is another opportunity
Energy may be an even bigger test as Britain needs electricity that is reliable and affordable. It also needs enormous investment in generation, storage and the electricity grid. That means nuclear, renewables, transmission lines, batteries and other technologies will all require substantial investment.
Again, the question should not simply be how much these projects cost. It should be what they leave behind. A new energy project can create construction jobs today, but it can also provide decades of electricity, attract businesses, develop skilled workers and create supply chains.
For Scotland and the Highlands, that matters enormously. The country can produce large quantities of renewable electricity, yet many communities still feel that the economic benefits are not proportionate to the resources being developed around them.
A growth strategy that genuinely spreads investment around the UK could begin to change that.
Housing may be the simplest test
Housing provides perhaps the clearest example of Britain's economic problem. The country needs more homes, but simply announcing a target does not build them.
There have to be planning permissions, land, infrastructure, builders, materials, finance and workers. This is why faster decision-making and regulatory reform could prove as important as additional government spending.
Reeves has already moved in this direction. Her Government has backed planning reform and changed the Treasury's Green Book approach so that the wider economic benefits of investment can be better recognised.
So Healey is not starting from scratch. Rather, he appears to be pushing the same broad growth objective harder, with greater emphasis on implementation, regulation and getting investment out of Whitehall and into the real economy.
It could also mean something for places such as Caithness
This is where the argument becomes particularly interesting outside London. For decades, economic policy has often appeared to work on the assumption that investment naturally gravitates towards the places where economic activity is already strongest.
That can become self-reinforcing. More businesses attract more infrastructure. More infrastructure attracts more workers. More workers attract more businesses.
Meanwhile, remote areas can struggle to break into the cycle.
But the Government has now begun changing the way major investment decisions are assessed. The revised Green Book approach is intended to give greater weight to regional growth, jobs and prosperity rather than relying so heavily on narrow calculations of immediate economic return.
That matters to areas such as Caithness. A road, electricity connection, housing development, college expansion or industrial project may look less attractive if judged solely by the number of people immediately affected.
But if it helps unlock a much larger economic opportunity, the calculation changes. That is precisely the sort of thinking that could help peripheral areas.
There is no magic solution
None of this means Britain has suddenly solved its economic problems. The Government still has a large debt burden. Interest payments remain expensive. Public services require more money. Taxes are already high by historical standards. Businesses remain cautious and productivity growth remains a major problem.
There will also be arguments over whether regulation can really be reduced without weakening environmental or social protections. There is an obvious danger in assuming that every pound spent on infrastructure automatically produces economic growth.
It does not.
Some projects will be poor investments. Some will take too long. Some will cost too much. The answer is not simply to spend more. It is to become better at deciding what is worth spending money on.
But there is a reason for some optimism
Perhaps the most encouraging aspect is that Reeves and Healey are not actually arguing over whether Britain needs growth. They agree on that.
The difference is increasingly about how to achieve it. Reeves has concentrated on establishing financial credibility, increasing investment and creating a framework in which the Government can borrow for productive investment while maintaining fiscal discipline.
Healey's approach puts more emphasis on the supply side of the economy: industry, defence, infrastructure, regulation, skills and the ability to get things built.
Those approaches could complement each other rather than conflict. And that may be the hope. Britain does not necessarily need another grand economic revolution. It may need something rather more practical as a Government that can take the money it already has, remove some of the obstacles that prevent investment, build infrastructure faster, support productive businesses and make sure that economic growth is spread beyond London and the South East.
The encouraging thing is that some of those changes are already happening. The Government's own figures suggest that public investment has been increased substantially, while its March 2026 forecast expected GDP per person to grow by 5.6% over the Parliament.
Those forecasts could prove too optimistic. Economic forecasts frequently do. But there is a bigger point. After years in which Britain's economic debate has often been about deciding which spending to cut or which taxes to raise, perhaps the more useful question is finally becoming:
How do we make Britain capable of producing more wealth in the first place?
If Reeves can provide the financial stability and Healey can help turn investment into actual factories, homes, energy, infrastructure and skilled jobs, the two approaches may prove more complementary than competing.
Britain's economic problems are serious but they are not necessarily permanent. For country that has spent a long time discussing how to divide a slowly growing economic pie, there is something rather hopeful about finally concentrating more attention on making the pie bigger.