Britain’s government has been urged to stop “flip-flopping” on key decisions and push ahead with bold UK reforms if it wants to turn early economic green shoots into real gains for households.
A new report from the Resolution Foundation says repeated policy U-turns and watered-down plans risk wasting a rare opportunity to improve productivity, wages and living standards across the UK.
What is the Resolution Foundation warning about UK reforms?
The think tank says the government’s approach since Prime Minister Keir Starmer’s election victory 18 months ago has been marked by hesitation rather than delivery.
In its assessment, plans on tax, welfare, trade and employment have either been delayed, dropped, or softened following political pressure.
Greg Thwaites, Research Director at the Resolution Foundation, said in the report: “With signs that productivity may be turning a corner, the government must capitalise by ramping up its plans.”
The message is clear: stability and long-term reform matter more than short-term political caution.
Which UK reforms could actually boost household incomes?
According to the report, three areas stand out as having the biggest potential impact:
1. Can planning reform fix the housing crisis?
The think tank argues that changes to planning rules, especially in and around major cities, are essential if housing targets are to be met.
- Faster approvals could unlock large-scale house building
- More homes would ease rent and house price pressure
- Workers could live closer to jobs, improving productivity
Housing shortages are currently one of the biggest drags on UK economic growth.
2. Why does EU alignment still matter after Brexit?
Despite leaving the EU, the report says closer regulatory alignment with European standards could significantly help UK trade.
- Easier exporting for UK firms
- Lower costs for manufacturers
- Better access to European supply chains
The Resolution Foundation estimates the economic hit from Brexit could already be close to 8%, nearly double the 4% impact assumed by official budget forecasters.
3. How can more people be brought back into work?
Employment reform is another major focus. The report highlights:
- Supporting older workers back into jobs
- Helping young people not in education or employment
- Reforming welfare rules to encourage work without hardship
If done properly, these steps could raise average household incomes by around £2,000 per year, according to the analysis.
Is the UK economy really improving?
There are early signs of progress, but they remain fragile.
- UK productivity rose by 3.1% in the year to the end of Q3 2025
- The figure adjusts for past under-recording of employment using payroll data
- Growth follows years of stagnation since the 2008 financial crisis
However, GDP per person in the UK still lags behind other major European economies, especially since the COVID pandemic.
What could this mean for public services like the NHS?
The Resolution Foundation says stronger growth driven by serious UK reforms would also help public finances.
Its modelling suggests that higher productivity could generate enough extra tax revenue to increase NHS spending by around 25%, without raising tax rates.
That would be a major shift at a time when health services remain under severe pressure.
Why does the think tank say policy U-turns are a problem?
Frequent changes of direction make it harder for:
- Businesses to invest with confidence
- Councils to plan long-term housing projects
- Workers to trust future tax and welfare rules
The report describes recent government behaviour as “kite-flying on tax ideas and timidity,” arguing that consistency is just as important as ambition.
