Jim O'Neill on BizNews: A blueprint for the UK turnaround so desperately needed

Key topics:Manchester outpaces UK growth under Andy BurnhamUK urged to reform housing, pensions, and welfareBrexit fallout still hurting trade and investment.By Jim O’Neill*.LONDON—Given UK Prime Minister Keir Starmer’s flailing effort to stay in power despite his party’s huge losses in local elections this month, it should come as no surprise that the country’s mood is darkening. Many are now wondering if the United Kingdom has simply become ungovernable, implying that the current economic sclerosis will only get worse.But in the spirit of never letting a crisis go to waste, I still see an opportunity for someone to step forward and offer a bold vision for the country. As I explained this past December, the UK does have some good things going for it, but it will not escape the hole it has dug for itself unless it slays five sacred cows—issues that Britain can no longer afford to postpone addressing.One of the positives, I noted, was Greater Manchester’s marked economic improvement over the past 15 years—an outcome made newly relevant by the rise of its mayor, Andy Burnham, as a potential challenger to Starmer within Labour. As the annual regional gross-value-added data show, Greater Manchester—not just Manchester itself—has outperformed the overall UK economy considerably, growing at close to three times the rate of London..Read more:.This is what a Reform government would do in the UK.Burnham deserves a lot of credit for this. Although he did not launch all the initiatives that lay behind Manchester’s relative success, he did embrace the opportunity those initiatives had created. He is right to point to his city as evidence that other important regions could someday enjoy the same success. By accelerating the devolution of power to the regions—including control of certain levers that the central government has been reluctant to surrender—a future national government could create the conditions for a national revival.The second positive development was the underperformance of the London housing market relative to the rest of the country. A continuation of this trend would imply that some problems stemming from social and geographic immobility are sorting themselves out. The more opportunities that Britons have outside of the unaffordable London metropolitan area, the better.But even if these trends continue, the UK will need a national leader who is not afraid to take on the economy’s toughest challenges, and who is not obsessed with the daily signals emanating from social media, opinion polls, and the Westminster bubble. Far from being politically damaging, decisiveness on the issues that truly matter will kickstart economic growth and deliver improvements to people’s standards of living.One such issue is housing. Why has no UK government followed economists’ advice and overhauled the system to tax land itself, rather than what sits on the land? That one change could restructure the entire housing market, generating a boom in construction activity that would in turn boost economic confidence more broadly..Read more:.UK government teeters as Mandelson affair reignites Starmer crisis.A second big issue—one where another Starmer challenger, Wes Streeting, deserves some credit—concerns trade with Europe. Even if the UK does not rejoin the European Union, getting as close as possible to the continent is a no-brainer. Brexit has had obvious, ongoing negative consequences in terms of trade, investment, the labor supply, and other issues. Outside of Reform UK (Nigel Farage’s right-wing populist party), no one takes the juvenile EU bashing seriously anymore.The third problem that desperately needs to be addressed is the “triple lock”: the requirement that state pensions rise annually “in line with either inflation, wage increases, or 2.5%—whichever is highest.” Why are politicians from all the major parties so terrified of changing this nonsensical rule?Whenever I pose this question, I am told that doing so would be unfair, unaffordable, or an act of political suicide (pensioners are the most reliably engaged voting bloc). But I refuse to believe that a sufficiently talented politician could not make the case for reform. After all, how can we ever expect young people to be optimistic about their economic prospects when they are priced out of home ownership and forced to pay more in taxes to protect older voters, 74% of whom own their homes outright (with no mortgage)?Finally, wouldn’t it be remarkable if Labour—the traditional champion of the working class—became the party that finally tackled the rising costs of social insurance (the fourth big issue) and the National Health Service (the fifth)? As I noted previously, welfare payments are so easily gamed that there are now millions of people claiming multiple benefits and receiving annual incomes above what they would earn by working a minimum-wage job. Moreover, the NHS has long been consuming a rising share of GDP with nothing to show for it..Read more:.The Economist: Reform UK is reassembling Boris Johnson’s electoral coalition.Any politician who tackles these issues with the ambition that they demand would trigger a massive rally in long-term UK bond prices, an associated reduction in long-term borrowing costs, an upward revaluation of the UK equity market, and a much-needed boost in business and consumer confidence. The opportunity is there. The UK needs a leader who is willing to seize it..*Jim O’Neill is a former UK Treasury minister and a former chairman of Goldman Sachs Asset Management.Copyright: Project Syndicate, 2026.www.project-syndicate.org.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. 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Jim O'Neill on BizNews: A blueprint for the UK turnaround so desperately needed

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