If there has been an overriding theme for Rachel Reeves as shadow chancellor and now, chancellor, it has been that her economic programme is about economic growth. Her first budget, due on Wednesday, will be a “growth budget”. Reeves vowed to lead a “pro-growth” Treasury. Her first speech as chancellor announced “growth … is our national mission.” Labour’s number one priority is to “secure the highest sustained rate of growth in the G7”. Nor is this “obsession” (Starmer’s word) with economic growth a uniquely Labour derangement. Tory leadership contender Robert Jenrick thinks that achieving “faster economic growth” is the “biggest priority for this country”. The left-liberal Resolution Foundation praises the fixation with growth as “much-needed ambition”. The free marketeers at the Adam Smith Institute want the government to “pull out all the stops” to “go for growth”. Consensus reigns: growth is necessary, growth is good and growth will return with a flourish. Sadly, this is delusional.

Absent an economic miracle, growth will fail to deliver increased public spending on the scale needed to repair public services. Increasing growth today by about one percentage point implies, from economic modelling, around £12bn more in extra taxes. Increasing it by two percentage points, a very dramatic rise, implies £24bn. The Institute of Fiscal Studies estimates that Britain needs £25bn more spent on its public services just to stand still, almost certainly a conservative estimate. The Centre for Progressive Policy has forecast that, allowing for an ageing population and the need to repair the damage of austerity, public spending needs to increase by £142bn a year by 2030. It is implausible that growth alone will get us there – something Labour has tacitly admitted, since its first budget will contain substantial tax rises as well as some spending cuts.

Nor is Britain likely to suddenly leapfrog the other G7 economies to become the fastest-growing out of all of them. It’s true that this country has been the poorest performer – if growth is our metric – since around the start of the austerity programme in 2010. Prior to that point, despite much rhetoric in the 1970s about “decline”, Britain’s economic growth performance was pretty well in line with the others. Since the financial crisis and austerity in particular, growth across the developed world has been anaemic – but Britain has underperformed even within that group. So there is some potential for catching up: simply investing in public transport, energy generation, new housing and so on should, after a long period of underinvestment, should produce some additional, short-term growth.

But sustaining this growth, still less beating every other big, rich country, is a different challenge. Labour thinks it can encourage private investment to deliver and has been actively courting Big Tech in particular, seen in a flurry of announcements about major new investments in data centres across the country. Labour’s 2024 manifesto talked up the immense potential of data centres to deliver growth. It is true that our collective production and use of data has grown exponentially over many years: global internet traffic has grown from 156GB transferred every second in 2002 to 150,000GB a second in 2022.

But generating, processing and storing all that data is a physical process – it needs raw materials like semiconductors and energy in the form of electricity. Increasingly, this processing and storing is taking place in the vast data centres of the cloud, where thousands of banks of servers sit, powering the modern internet. AI, which relies on the processing of data on a vast scale for its operations, has put rocket boosters to these demands: a typical ChatGPT prompt uses about 10 times the amount of energy as a Google search. A typical “hyperscale” data centre, of the kind Microsoft, Amazon and Google are constructing all over the world, uses the same electricity as 37,000 homes. But it’s not just electricity for processing – as anyone who has used a laptop knows, computers get warm when they work. Cooling all those humming servers uses an incredible amount of water: around 3-5 million litres daily in a hyperscale data centre, equivalent to a town of 40,000 people.

It’s no wonder the construction of these “data vampires” (in technology writer Paris Marx’s phrase) is sparking protests and restrictions across the world, from Virginia to Chile to Ireland, where projections suggest that by 2026, one-third of its electricity supply will be gobbled up by data centres. Capacity constraints on the supply of electricity and water are very real and where both are limited. it’s no surprise that residents, businesses and farmers want to see their needs prioritised over big tech profits. Because fossil fuels are often easiest and quickest to access for data centre operators, rising demands for power are fuelling a US construction boom in CO2-emitting gas-fired power plants, which now make up 60% of new power plant construction. Google’s emissions, for example, have climbed nearly 50% in the last five years as a result of data centre expansion.

Yet these monsters form a core part of Labour’s dash for growth. The government is ripping up the planning system to allow giant new data centres to be built over the heads of local objections. Nor do data centres deliver significant numbers of jobs, relative to the size of the investment: the hyperscale £10bn data centre investment in Blyth, announced by US asset manager Blackstone, is forecast to create just 4,000 jobs. That’s a cost of £2.5m for each new appointment. Data centres are large, capital-intensive investments that create few new employment opportunities – but place enormous demands on electricity and water systems that are already under significant (and worsening) strain.

But the bigger picture is that growth is going to be increasingly hard to find. No matter the policy prescription tried, the most likely prospect is that this country, like every other developed economy, will (at best) sputter along relative to the recent past – perhaps worse off than similar economies, given its failing institutions and long legacy of decline. Collectively, humanity has seen 250 years of industrial, capitalist economic growth, with Britain as the very first country to see it on a sustained basis. That growth is now, in the first decades of this century, running hard into the fundamental barrier that is the end of the Holocene – the stable period in the earth’s geological and environmental history that modern humanity has lived in and, in the last few centuries, built an entire industrial civilisation on the foundations of. In the same month that has seen two US hurricanes cost $100bn or more whilst farmers across Europe report the worst harvests for decades, it’s idle to presume that at some point in the future stable, consistent economic growth will return. We can speculate about magic future technologies but as we are seeing, the technologies we have impose their own resource demands – and do not solve the basic problem, whatever Google’s former CEO might fantasise about.

Fiddling with the planning system or scraping a percentage point off of corporation tax won’t make the slightest bit of difference to the fundamentals. The real economic questions are: how will this collapse play out? Who will lose out, and who will be protected?

This is a more basic issue than that of degrowth. The idea of choosing to turn our attention away from growth is becoming increasingly popular, with thinkers like Jason Hickel and Kohei Saito promoting the idea that continued economic growth in the rich world (not the global south) is incompatible with the continued existence of a stable environment. The basic degrowth argument is simple: since each extra unit of GDP produced demands a certain amount of physical inputs, continual, high growth is simply unsustainable. The efficiency of production has improved significantly over time but because the global economy has grown so much and is now so big these improvements made for each extra pound or dollar or whatever of GDP are drowned out by the sheer size of the economy. Although every additional bit of global GDP leads on average to far fewer greenhouse gas emissions than in the past – our economies are much more efficient now – the size of the global economy is so great that emissions are still rising: last year saw a new record for greenhouse gas emissions, now at their highest-ever level.

Our basic problem is not that we in the richer world can choose to end growth. It is that we will have less and less choice about whether or not to degrow: growth will be harder and harder to come by. The implication, in a competitive, capitalist global economy is that life will become worse and harder for most of us since a low-to-zero growth economy is still one from which profits must be extracted. When growth is low, that means increasing the rate of exploitation of people and nature to deliver those profits – or, failing that, grabbing through unequal exchange and even military force the resources of others. Governments committed to chasing growth in a low-growth world will merely reinforce this process. Better instead to think about how to fairly protect everyone from worsening environmental chaos; how to improve the care we can provide for everyone in an ageing and increasingly sickly society; and how the real goal of economic policy should be to provide a good life for all, not peddling fantasies about growth.