Ill health is holding Britain's economy back. If the government wants growth, it must start there

This month’s budget takes place against a backdrop of a black hole in public finances, with the Treasury searching for growth in a difficult fiscal environment. But something risks being overlooked: a nation in poor health cannot grow its way to prosperity.

Across Britain, ill health is holding people and the economy back. Illness keeps people out of work, drives up NHS costs, and limits productivity. But much of this illness is preventable, and preventing ill health is one of the most effective ways to strengthen the economy. That starts with improving the conditions in which people live.

Those conditions are not experienced equally. Poverty and race remain two of the strongest predictors of ill health. People on lower incomes, as well as people from Black, Asian, and other racially minoritised communities, are more likely to be exposed to air pollution, less likely to have access to affordable, nutritious food, and more likely to live in insecure housing. These inequalities are not inevitable. They are the product of policy choices, which can all be addressed in this month’s budget.

If ministers are serious about unlocking growth, they must see improving health as a precondition for prosperity rather than a cost to be delayed.

At Impact on Urban Health, we see how the places in which people live shape their health. In inner-city London, people are affected by housing conditions, debt, the availability of healthy food, and air pollution. These conditions determine whether a child grows up to be healthy or carries preventable illness into adulthood. Improving these conditions is one of the most powerful investments the government can make.

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Children’s health and food

Food is a good place to start. A recent House of Lords committee report found that food-related ill health costs society equivalent to 1–2% of GDP a year.

Here the government deserves credit. The recent commitment to extend free school meals to children from families on universal credit, along with the introduction of the new Healthy Food Standard – which mandates a target for sales of healthy food, against which all large food businesses will report – will help more children access the nutritious food they need.

Policies like the Soft Drinks Industry Levy also show what works. Since its introduction, sugar sold in soft drinks has fallen by more than a third without harming sales and the same principle has been extended to milk-based drinks.

The government should now introduce a new levy that incentivises manufacturers to make a wider range of products healthier. This would reward responsible businesses, spur innovation and reflect public demand: 68% of adults back an extension of the levy, and three quarters want the revenue reinvested in children’s health.

A serious child poverty strategy

Millions of children are growing up in poverty and insecure housing. Poverty in childhood leads to poorer health, lower educational attainment and lower lifetime earnings. Reducing child poverty should be viewed as an economic reform, not a welfare cost.

The two-child limit on universal credit and tax credits is one of the most significant drivers of child poverty, pushing hundreds of thousands into hardship. Abolishing it would lift 350,000 children out of poverty and reduce deprivation for 700,000 more. At around £2 billion a year, the long-term return in health and productivity would far outweigh the cost.

Clean air, fair growth

Air pollution is another silent drag on the economy. It contributes to up to 43,000 deaths a year in the UK and costs the economy £27bn every year through hospital admissions, lost productivity and premature deaths. Its impacts fall disproportionately on children and people in lower income areas or from racialised communities.

Around a third of emissions in urban areas come from industrial and commercial sources, yet businesses are rarely incentivised to change. The Treasury could introduce tiered business rates relief to reward companies that measure and reduce harmful emissions such as PM2.5. This would reward those investing in cleaner operations and level the playing field between polluters and responsible firms.

London’s progress shows what is possible, but extending such incentives nationally would accelerate improvements in air quality, delivering healthier communities and a stronger economy.

Growth that lasts

This budget will be defined by hard choices. But some of the smartest decisions don’t require big spending, just a clearer vision of what drives long-term growth. Policies that create cleaner air, fairer opportunities and healthier environments will pay for themselves through lower NHS demand, higher productivity and stronger communities.

Growth built on poor health is fragile. Growth built on improving the health of society is sustainable. If the government truly wants to go for growth, it must start by improving the conditions that allow people to live healthy lives.

Peter Babudu is executive director of Impact on Urban Health.

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