Speaking at Bloomberg's European HQ in London on 27 January, Chancellor Jeremy Hunt outlined plans to grow the UK economy and turn the country into "one of the most prosperous countries in Europe".
Hunt set out four ‘pillars' for growth, including ‘enterprise', ‘education', ‘employment' and ‘everywhere'.
Ideas include turning UK into the next ‘silicon valley' for tech innovation; wider access to university; unlocking the labour of those who can work but don't want to, and "levelling up" the country.
Hunt signalled that tax cuts would only come "when the time is right", focusing instead on reducing inflation, which he described as the "best tax cut" the Government could offer right now.
To hit the Government's ambition to reduce public debt while keeping taxes competitive, that therefore means a "constraint on spending", according to Hunt.
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."
Speech met with support from some
The Confederation of British Industry (CBI) it was optimistic about his focus on growth.
Tony Danker, director general of the CBI, said:
"It's only by improving the UK's languishing performance on productivity that we can realise the huge economic potential in every corner of the country.
"There is much to get behind here with the Chancellor's emphasis on using innovation as the foundation of the UK's future economy and championing the strengths of the UK tech sector.
However, the Institute of Directors (IoD), slammed Hunt's speech, writing the Chancellor "should add a fifth E for ‘empty' to his vision for the economy".
Chief economist of the IoD Kitty Ussher praised Hunt for "championing Britain's strengths to potential investors, in particular, high-tech industries" but criticised the Chancellor's own's admission that the speech was "not a series of measures or announcements".
She said:
"Business needs government action to counteract the negative mood, for example, through a continuation of the capital investment super-deduction, through tax credits for employers who invest in skill shortage areas and a plan to incentivise the net-zero transition for the SME sector."
IMF downgrades economy predictions after Hunt's speech
Only a few days after the Chancellor's speech, the International Monetary Fund (IMF)said it expects the UK economy to contract by 0.6% over 2023, making it the only G7 country forecast to shrink this year.
"With inflation at about 10% or above in several euro-area countries and the United Kingdom, household budgets remain stretched.
"The accelerated pace of rate increases by the Bank of England and the European Central Bank is tightening financial conditions and cooling demand in the housing sector and beyond," the IMF said.
Overall, the IMF forecasts global growth to be 2.9% this year, 0.2 points higher than anticipated in October 2022, while the projection for 2024 has been revised down by 0.1 points to 3.1%.
In response to the IMF forecast, Hunt said that "these figures confirm we are not immune to the pressures hitting nearly all advanced economies".
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