Jeremy Hunt, the Chancellor, today said financial stability had to come before tax cuts, but said a competitive ’low tax environment’ would be the backbone of future growth. Sascha O’Sullivan looks at his speech.
Rishi Sunak’s cabinet spent the day at Chequers yesterday being told by election guru Isaac Levido that the polls wouldn’t shift for sometime.
They’ll have to wait it out.
It’s good news for Jeremy Hunt, whose speech at Bloomberg this morning is unlikely to have moved the dial.
Although there have been some suggestions the Conservatives have pulled back trust on the economy, the Labour campaign to win over business has dented any goodwill the private sector still had for the government.
Today’s speech was billed by Politico to be more Geoffrey Howe, who told everyone things were pretty bad, than Denis Healey, an optimist to the point of mild delusion.
But Jeremy Hunt spent a chunk of it telling off journalists and commentators for buying into “British declinism”.
He cited a series of figures which suggest Britain isn’t as bad off as we might like to think and are “in the middle of the pack” of G7 nations.
After leaving the European Union, our growth has been about the same as Germany, he said.
It is one of the great curiosities, however, that politicians continue to fall back on “record low unemployment” as a good thing.
For anyone who has ever even thought about the Office of National Statistics numbers on the labour market (admittedly still quite a niche subset of the population), they will know the problem is we don’t have enough workers.
In October to December last year, the number of vacancies fell from 75,000 to 1.1m. But while it has been falling consistently, it is still at historically high levels, the ONS noted.
Indeed the fall in vacancies has largely not been the result of people filling those roles, but companies holding back on recruiting in light of economic uncertainties.
The government knows a tight labour market and falling productivity, not unemployment, is its problem and it says all the time. Why else do you think there were bizarre rumours over-50s would be given huge tax incentives to return to the workforce? Or new plans to help mothers return to their jobs?
Unemployment figures only count those actively looking for work, not the economically inactive or out of work for chronic illness.
That the both the Chancellor and the Prime Minister keep relying on this unemployment stat in fact suggests they are struggling to find any other positive figures on the UK economy.
I’ll leave it to you to decide if that sounds more Howe or Healey.
Now the last thing I’d want to do is fall into the stereotype Jeremy Hunt painted of journalist gloomsters chewing over the bones of the British economy (actually, I’m kind of ok with it), but a speech promoting Britain as a future leader in green tech had curious timing.
It was only last week Britishvolt collapsed into administration, to the surprise of few who worked in the electric or automotive sector, many of whom decried Britain’s failure to invest in gigafactories.
And, as Sam Richards, chief executive of the growth group Britain Remade wrote in this newspaper yesterday, it currently takes 13 years for an off-shore wind farm to be up and running – even though it only takes 3 years to actually build one.
Hunt started his speech with a gag about ChatGPT, claiming he asked the AI chat to to write the opening line.
Many will be wondering if he should have let the 2023 version of Microsoft’s Clippy write the rest of it.