Chancellor sets out long-term vision to grow the economy
Chancellor Jeremy Hunt today set out his vision for long-term prosperity in the UK, calling on businesses in key growth areas to invest in the UK and expressing his desire to make the UK an attractive site for innovators and entrepreneurs.
Speaking at Bloomberg’s European headquarters in London, the Chancellor opened his speech on the economy by highlighting one of the UK’s major growth sectors – technology – before revealing that the opening section of his speech had been written by ChatGPT, the AI software that was released late last year.
Getting the economy growing faster is one of the government’s five priorities, as set out in Prime Minister Rishi Sunak’s New Year address. Mr Hunt outlined how he intends to deliver upon that over the coming years, ahead of the Spring Budget due on 15th March.
The Chancellor Jeremy Hunt said:
“Our plan for this year remains to halve inflation, grow the economy and get debt falling.
“But all three are essential building blocks for much bigger ambitions for the years beyond.
“World-beating enterprises to make Britain the world’s next Silicon Valley.
“An education system where world-class skills sit alongside world-class degrees.
“Employment opportunities that tap into the potential of every single person so businesses can build the motivated teams they need.
“And opportunities spread everywhere just as our talent is spread everywhere.”
The Chancellor went on to call on businesses in the key growth sectors of Digital Technology, Green Industries, Life Sciences, Advanced Manufacturing and Creative Industries to increase their investment in the UK, with the Chief Scientific Adviser Sir Patrick Vallance already leading work on how we should change regulation to better support safe and fast introduction of new emerging technologies.
The Chancellor added:
“If anyone is thinking of starting or investing in an innovation or technology-centred business, I want them to do it in the UK. I want the world’s tech entrepreneurs, life science innovators, and clean energy companies to come to the UK because it offers the best possible place to make their vision happen.
“And if you do, we will put at your service not just British ingenuity – but British universities to fuel your innovation, Britain’s financial sector to fund it and a British government that will back you to the hilt.”
Digital Secretary Michelle Donelan said:
“I believe that Britain is uniquely placed in the world to become the number one home for tech – one where entrepreneurs have both the stability, but also the freedom, to invest and innovate.
“We have a clear vision for where this country is going, and a government that is prepared to match that ambition with action. That’s why this year we’re bringing forward new laws to transform digital markets, free up businesses to innovate with data, and set out our strategy for globally important semiconductors.”
Business Secretary Grant Shapps said:
“We stand at the cusp of a new age, facing a technological revolution that will transform the world as deeply as the industrial revolution did in the nineteenth century.
“The UK has an opportunity to be at the forefront of this revolution, building upon our world-class research infrastructure and open markets to scale up the business titans of the future here in Britain, in everything from AI to quantum, from robotics to biotechnology.”
The Chancellor set out his aim to increase enterprise, supporting businesses by using our new-found Brexit freedoms to review regulations in key growth sectors to make it easier for companies to innovate, alongside the importance of competitive business taxation.
He reiterated the importance of employment and tackling economic inactivity, helping more people into work and filling the vacancies in the jobs market. He also outlined ambitions to help more disabled people and those with mental illnesses into work, and a pensions system that encourages continued workforce participation. The Work and Pensions Secretary is thoroughly reviewing issues holding back workforce participation, with a report due to conclude shortly.
The Prime Minister and the Chancellor have both placed enormous importance on education, with £2.3 billion of additional funding for 23-24 and 24-25 announced at the Autumn Statement and continued implementation of the government’s skills reforms. The government has already made progress with T-levels, boot camps and apprenticeships.
And finally the aim of levelling up everywhere across the UK, ensuring that all areas feel the benefits of economic growth with empowered local areas and reducing the time it takes to build new infrastructure. Already the Levelling Up Fund has awarded £3.8 billion to projects across the UK and the UK Government is working to launch Freeports in every country in Britain, with several already operating in England and the locations of two having recently been announced in Scotland.
The Secretary of State for BEIS Grant Shapps and Secretary of State for Culture Media and Sport also delivered keynote speeches at the event.
Sector Response
Geoff Barton, General Secretary of the Association of School and College Leaders, said:
“We are pleased to see that the Chancellor has made education one of his priorities, but he now needs to deliver on that promise.
“The erosion in the real value of teacher and leader pay over the last decade has led to a recruitment and retention crisis that is already damaging educational standards. The Chancellor spoke a great deal about grounds for optimism. Teachers going on strike next week and leaders managing the implications of this are unlikely to share his sunny outlook.
“The extra funding for schools announced in the Autumn Statement will largely be swallowed up by the high cost of energy bills, leaving very little left over for any significant improvement to pay. The Chancellor is right to say the UK has some of the very best teachers in the world, but one third of them are leaving the profession within five years for jobs with better pay and conditions.
“The Chancellor is equally right to identify the importance of children leaving school with basic skills in reading and maths, and the role that technical qualifications play in equipping people with the skills they need for future employment. But any ambitions to improve education rely on schools having a qualified teacher in every classroom, something that is becoming more and more difficult to achieve. Providing the investment needed for a significant pay rise for teachers that will begin to address the recruitment and retention crisis must be the immediate priority.
“The Chancellor said that if companies cannot employ the staff they need, they cannot grow. It is exactly the same for schools and it is a damning indictment of the government that they are unable to recognise this.”
TUC General Secretary Paul Nowak said:
“Public services are the backbone of our economy. They are vital for growth and health.
“But the Chancellor is ignoring the massive staffing crisis hitting our schools, hospitals, care homes and other key services.
“Rather than addressing the fundamental issue of public sector pay – which is driving many key workers out of their professions – it was the elephant in the room.
“Public servants will be deeply worried about the Chancellor’s warnings of further restraint. We know that is usually code for cuts.
“Jeremy Hunt and Rishi Suank are key to unlocking the current industrial disputes.
“They should be giving public services the funding they desperately need – starting with fair pay rises this year for the staff who keep them running.
“We cannot afford to repeat the mistakes of the 2010s when years of underinvestment gutted frontline services and ultimately led to the staffing exodus we are seeing today.”
Kevin Courtney, Joint General Secretary of the National Education Union, said:
“The Chancellor talked today about education being one of the pillars of a modern economy. It is hard to disagree with this but the Government need to wake up to the very shaky foundations that they have built after 13 years in power.
“The Chancellor was correct to say that our teachers rank amongst the best in the world. He was silent though on the fact that the Government have repeatedly missed their teacher recruitment targets and that a third of the teachers who qualified in the last decade have quit. Ministers need to get a grip of the recruitment and retention crisis in education. They could start by giving the fully funded, above inflation pay rise that is needed to keep teachers and support staff in the classroom.
“Rishi Sunak when he was Chancellor famously said that the Government had ‘maxed out’ on education recovery spending. The Government shamefully put in only a third of the investment recommended by their own education recovery tsar. These actions speak louder than the empty words we have heard this morning.”
REC chief executive Neil Carberry says:
“Jeremy Hunt is right to say we should be optimistic about the potential of the UK economy. There is a lot we can achieve – and we need to remember that only growth can drive prosperity and properly fund public services. The Four E’s the Chancellor set out are an important contribution to the debate, but firms will be looking to government for more than words. Actions that support long-term, sustainable growth matter. This morning’s speculation about cutting back on vital infrastructure, for instance, runs counter to an optimistic vision for Britain.
“We agree with the Chancellor that if businesses cannot hire, they cannot grow. Our report ‘Overcoming Shortages’ found that labour shortages risk costing the economy anywhere between £30 billion and £39 billion every year. And our latest January Labour Market Tracker found that there were more than 1.53 million active job postings in the UK. Looking ahead, unless Jeremy Hunt acts in the upcoming Budget to tackle labour shortages we will miss out on annual growth equivalent to two Elizabeth Lines by 2027.
“We are relieved that incentivising business to invest in skills and make it easier to recruit and retain staff is on the Chancellor’s agenda. We need a plan for jobs that sets out how to achieve that. Unlocking access to training by reforming the Apprenticeship Levy is part of it, but so is immigration, devolution of skills planning and labour market activation policies such as better childcare and local transport.”
David Hughes, Chief Executive of the Association of Colleges, said:
“I’m pleased that the Chancellor has set out the compelling need for a major boost to college funding. It is colleges which will deliver the bulk of the training and skills needed to boost the economy.
“It is colleges where the half of the population who do not hold higher level qualifications and the nine million adults who struggle with their basic literacy, numeracy and digital skills will get the support and skills they need to be competitive in the labour market.
“I look forward to the Chancellor backing his words today on 15th March when he presents his Spring Budget. Colleges are ready to deliver their part in the economic growth plan, but they need the investment to be able to do that after 12-years of declining funding for adults and young people alike. Post-16 education funding is way behind what is needed to boost economic growth.”
Federation of Small Businesses (FSB) Chief of External Affairs Craig Beaumont said:
“The contents of the Chancellor’s speech today had all the right elements to build a successful, prosperous economy – but now the proof will be in the pudding in the years ahead. His personal drive is clear. It was helpful to speak to the Chancellor after the speech on how to take this forward.
“As a former small business owner himself, it was encouraging to hear him talk about his own, personal experiences with enterprise and innovation. But policy decisions now must match his new four-pillar framework. We’ve got to boost growth and productivity.
“First up must be to change the recent decisions to gut the SME R&D scheme due to too much take-up, where we need a new way forward. The abolition of Help to Grow Digital due to too little take-up means we need new ideas – such as our Help to Green proposals that boost investment and net zero.
“The Government must now turn its efforts into getting more people into employment through a Kickstart scheme. It should also set a target to grow the number of disabled entrepreneurs by 100,000 by 2025, because a disability entrepreneurship gap exists, and the Government should act to help close it. The self-employed should also be given the right help to expand their business.
“The litmus test of today’s framework and the policy decisions that now flow will be on the Chancellor’s budget on March 15, when we hope he follows today’s bark with a bite.”
Anthony Painter, Policy Director, Chartered Management Institute (CMI) said:
“Fixing the UK’s productivity problem means not only recognising our undoubted potential, but also both employers and Government taking decisive steps to increase participation and skills levels in the economy.
“That means meaningful moves to hire and support the millions of people in left behind parts of the country, people with disabilities, those from lower socioeconomic backgrounds, women and people from minority ethnic communities.
“It also means increasing our commitment to high-value apprenticeships. Research by the Chartered Management Institute shows that degree level management apprenticeships can lead to more than 20% productivity gains, with private sector productivity gains estimated at 27%. We need more of them and we need to see management and leadership skills as a vital part of the solution – not least because it is good managers and leaders who will develop others.
“The UK’s long-term underinvestment in ensuring those leading and managing firms across the country are trained to do the job properly can no longer be viewed as a ‘nice to have’, it needs to be an urgent priority if employers of all sizes – both in the private sector and in public services – are to deliver meaningful growth and a better standard of living for all.”
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