Lucy Hooker
Business reporter, BBC News
Getty Images
Chancellor Rachel Reeves has backed the construction of a third runway at Heathrow, and a whole host of other plans – with the aim of getting the UK economy growing.
In the chancellor’s words growth is not “just about lines on a graph” but also about “the pounds in people’s pockets”.
So will it make us all feel better off? And how soon?
What did Rachel Reeves say?
Not for the first time, the chancellor has been stressing how important growth is, and that this government is making growth its priority.
More economic growth should mean more jobs, higher wages, and more taxes flowing in to finance government spending on public services, such as education, policing and healthcare.
“Without economic growth, we cannot improve the lives of ordinary working people,” Reeves said.
She outlined plans for expanding airports and creating a science hub around Oxford and Cambridge, building reservoirs and upgrading rail lines.
And she set out how she wants to make the UK a better – and easier – place to do business.
At a glance: What was in Rachel Reeves’ speech?Will boosting growth affect me?
There’s always a fierce debate over what will or won’t make the economy grow.
Growth measures any increase in the size of the economy, which means all the things we buy and sell, whether that’s a haircut or a house.
What is economic growth?Every government says it wants to boost growth, and comes up with its own plan. But whether it works depends on a huge range of factors, including what is happening in other countries. And currently growth in the UK is flatlining.
Reeves’ plan is to get things moving by backing big building and transport projects, making it easier to get planning approval, and encouraging more money from firms rather than goverment money.
The effects of growth are never felt evenly, so even if it’s a big success, some will benefit more than others.
For some people it could mean a new job, or higher wages, especially if you work in a sector that is seeing the direct benefit of new investment, for example, construction or AI.
Even if you don’t, there could be a knock-on “domino” effect as the first people to benefit go out and spend more in pubs, shops and elsewhere, boosting earnings for other businesses.
But most of us will only get a sense that the economy is growing when we see cranes towering above a new building site or new shops opening on the High Street.
And although Reeves said she wants to improve living standards across the UK most of the specific projects she announced were in the south of England.
Will expanding Heathrow boost economic growth?Getty Images
When will I feel the benefit?
We might be told the economy is growing. We might even see building underway. But it could take a while longer for us to feel any direct benefit – more pounds in our pockets.
That’s because a lot of the projects Reeves outlined will take years to be delivered.
Construction on the new runway at Heathrow for example is unlikely to start before 2035.
So if you aren’t a planner, a lawyer or a builder, that means waiting a while for the impact to ripple out to you.
Even Reeves admitted things “can’t be turned around overnight”.
But the chancellor is banking on one other thing that could have an effect a little sooner.
She has been criticised for being too gloomy about the UK’s prospects. Now she is focusing on “opportunity” and “potential”.
If she can make people feel more optimistic about the UK’s economic fortunes, there could be a much faster boost to our mood. People may spend more and employers may choose to spend some of that money on pay rises.
