“UK economy flatlines in November as Labour growth push fails” was a common British newspaper headline on the eve of the Labour government’s November budget. Since entering government almost one and a half years ago, Labour has insisted growth is the number one priority to deliver its political and economic goals—and to stay in power. Meanwhile in Spain, with its democratic left government, the English-speaking prime minister, Pedro Sánchez, in power since 2018, doesn’t talk growth: he does it. So is it time for Sir Keir Starmer to learn Spanish?
Spain’s GDP grew by 2.3 per cent in 2023, compared to 0.3 per cent in Britain. In 2024, UK growth was 1.1 per cent while the Spanish economy grew by 3.1 per cent. In 2025, UK growth is estimated to reach 1.5 per cent; Sánchez expects to deliver 2.9 per cent growth in the Spanish economy this year. So the question for Britain—and especially the Labour government—is this: can British MPs, officials and business leaders swallow some national pride and learn from Spain?
The reasons for Spain’s growth success story can be listed under three Ds: demography, decentralisation, and decent treatment of workers.
The migration dividend
Unlike the 21st-century British pathology about migrants, Spain—which has the same level of demagogic populist anti-immigrant voices in politics and the media as Britain—has decided that to grow the economy you need to grow the population.
Spain welcomed 1.3 million immigrants in 2023, up from 920,000 in 2017. About half came from Latin America, including 250,000 Spanish-speakers from Colombia and Venezuela alone. But there were also 123,458 Muslim immigrants from Morocco, as well as economic migrants from Romania and Ukrainians arriving as war refugees ready to work hard for a better life. Spain also took in 64,000 undocumented migrants in 2024, including 46,843 boat people arriving on the Canary Islands. Britain last year took in 43,650 undocumented migrants despite having a much bigger population—nearly 70 million compared to Spain’s 48 million.
Sánchez and his determined labour minister, Yolanda Díaz, have pushed through pro-worker fairness laws reducing the working week, axing zero-hours contracts, and introducing the so-called “Rider Law” stipulating that delivery workers have the same rights as full-time employees. This led Deliveroo pompously to quit Spain, but its work was taken over by other delivery companies. In contrast, British employers and most of the UK press insist that treating workers fairly will damage the economy. Spain proves the opposite is the case. Indeed, throughout labour-market history, workers who have more money in their pockets and are not exploited will use their free time spending money in local economies.
As a European Union member state, Spain has been allocated 176 billion euros from the Next Generation budget. Britain, in turning its back on Europe, has no such luck.
Decentralisation delivers
Spain is a kingdom but in reality a decentralised republic, with 17 autonomous regions including Catalonia and the Basque Country, each with its own elected assembly and government. These regional authorities are much closer to economic actors and have a sharper sense of what needs to be invested to grow the economy than Britain’s highly centralised system, dominated by the Treasury in Whitehall.
South Madrid is a giant building site of new affordable housing and a new five-kilometre tunnel for traffic to get out of the capital. Labour ministers would die to be able to show such investment. But Whitehall rigidities and town-hall opposition by local Labour, Liberal Democrat, Green and Conservative councillors to new homes and new transport investment prevent Britain from growing.
Spain’s politics are far from perfect, and there is as much in-work poverty—especially in the health and education sectors—as in Britain. Sánchez does not have a majority for his Socialist Party in the Cortes and relies on parties including Catalan and Basque separatists. Corruption also remains a widespread issue; according to the Madrid-based academic Professor Nigel Townson in his Penguin History of Modern Spain, legal proceedings concerning corruption have involved hundreds of political figures.
But if British Labour really does want to follow the “growth, growth, growth” mantra endlessly repeated by Sir Keir Starmer and Rachel Reeves, they could do a lot worse than study how the socialist government in a big European country has turned the political growth wish into government reality.
Denis MacShane was a Labour MP (1994-2012) and served as UK minister of Europe. He writes regularly on European politics and Brexit.
