What do Rachel Reeves’ plans for growth mean for the economy?
What do Rachel Reeves’ plans for growth mean for the economy?
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Chancellor Rachel Reeves has laid out fresh plans to grow the economy. In a speech on Wednesday, she pledged to turn Oxford and Cambridge into “Europe’s Silicon Valley”, while also backing a third runway at Heathrow Airport. She said the plans are part of her “fight” for economic growth across the UK.
But what does Ms Reeves mean by “growth”, and how does it affect normal people? The PA news agency explains. – What does the Chancellor mean by ‘growth’?. When Rachel Reeves talks about growth, she is broadly talking about boosting the economy and, in doing so, making people and businesses a bit richer.
The main measurement we have for this is gross domestic product (GDP). That refers to all the spending by companies, governments and people in a country. But GDP has been stagnant since Labour won the election last year – up just a few percentage points since July.
– How does growth affect me?. If GDP is rising, people are earning and spending more money – and they are also paying more tax. This means the Government has more cash to spend on improving things which actually affect everybody’s lives, like schools, police and hospitals.
When the economy shrinks, these things tend to get worse, because there is less money to spend on them. Ms Reeves said on Wednesday that the Government will have succeeded “when working people are better off”. – What is the Government doing about it?.
