Britain’s crumbling public services are bad for business, and spending more taxpayers’ money to fix them is a pro-growth policy, the pensions minister, Torsten Bell, has argued.
Rachel Reeves has been accused by business lobby groups of clobbering the economy with the £25bn increase in employer national insurance contributions imposed in her October budget.
But in his first interview since being appointed in January, Bell argues that the other side of the ledger – the chancellor’s plans for higher public spending, including an extra £25bn for the NHS over this year and next – has been underplayed.
“The reason why the budget is pro-growth is because you cannot have a failing state and a growing economy,” he told the Guardian.
“I’ll give you a concrete example: I walk into a Sainsbury’s in Uplands, in Swansea, and there are security guards on the door. Why are there security guards on the door? Because there isn’t a functioning response to shoplifting, right? That is a retail tax. We are taxing retail to pay for the failing state – and that is what we are turning around.”
Turning to the impact of the struggling NHS, he said: “It is like a sickness tax on every business in the country if their workers are off because they are not being treated.”
Bell, formerly the chief executive of the Resolution Foundation thinktank, was selected for the Swansea West constituency just a few weeks before last year’s general election.
“One thing I’ve definitely learned from six months as an MP: every Saturday I meet people – and if I’m door-knocking, in England as well as in Wales – who say, ‘My health is affecting everything else in my life,’” he said.
To underline the scale of the challenge facing Labour in rebuilding the economy, Bell points to the grim fact that a typical man in 2024 was earning 7% less in real terms than his counterpart a full 20 years earlier.
“That brings to life how large the economic failure is and why people might be really pissed off,” he said.
Challenged on whether the government would be able to deliver tangible results on repairing public services and kickstarting growth in a single parliament, he insisted: “What people need to see is that tomorrow looks better than today. No one’s test is that everything is perfect.”
And speaking in his roomy ministerial office at the Treasury, where he once worked as a civil servant, and then as a special adviser to the late Alistair Darling, Bell repeatedly stressed the radical nature of Labour’s project.
“Some people think, or least talk about us, as if we are a government that’s defending the status quo, and we are not,” he said. “Our substantive view, underpinning all that we’re doing, is that the status quo is economically and morally bankrupt. And so, we’re changing it.”
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