Jeremy Hunt delivers speech on plans for the UK economy
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MPs warned Hunt that if he failed to act this would spell “the end of an era”, destroying the Tory reputation as a low-tax party.
They said that announcing tax cuts when he stands up in Parliament on March 15 would boost incomes, help people survive the cost-of-living crisis and win back disaffected voters.
Former business secretary Jacob Rees-Mogg said highest tax burden in 70 years was “not good for economic growth”.
I don’t dispute their arguments, and I can’t imagine many Express readers would. Almost nobody likes paying taxes, especially today, with food and fuel bills going through the roof.
It’s just not going to happen.
Anybody who recalls the glee on Jeremy Hunt’s face as he administered a harsh dose of fiscal rectitude after replacing Kwasi Kwarteng knows that.
He was enjoying himself.
Unfortunately, he was also right. The nation needed a reality check.
Former Prime Minister Liz Truss has been trying to justify her disastrous Premiership in recent days.
She was in charge of the country for just 44 days but as my colleague Leo McKinstry points out, Calamity Liz still had time to plunge markets into turmoil, send interest rates soaring and nearly destroy the nation’s pensions.
Truss did this by proposing a staggering £45billion worth of tax cuts, but without announcing any spending reductions. In fact, she promised huge increases on infrastructure and childcare spending.
Global money markets decided the UK was no longer serious about keeping the nation’s finances under control, and chaos ensued.
Would you lend your money to a free-spending debtaholic who is in total denial of reality? I certainly wouldn’t. Nor would the bond markets.
The UK is in a financial mess. It owes almost £2.5trillion, more than the economy produces each year.
Annual borrowing hit a new all-time high of £27.4billion in the year to December, up from £16.7billion one year earlier.
We are still spending way more than we earn and borrowing like crazy to plug the shortfall. And Truss wanted to borrow tens of billions more?
Worse, as interest rates rise, the cost of servicing that debt has rocketed. In December, it hit a record £17.3billion.
That’s money that could have been better spent on frontline services like the NHS.
Or tax cuts.
Like it or not, Jeremy Hunt is in no position to cut taxes. Yet there is one thing he and Prime Minister, Rishi Sunak must must do, if they are to save the Tory party and the country.
That’s to deliver some economic growth.
Calamity Liz was right about that at least, but it is hardly a great insight. The economy does need to grow. She just set about it in a childish fashion.
Hunt and Sunak are supposed to be the grown-ups in the room, and they have shown that by restoring order.
Yet the country is doomed to slide even deeper into managed decline, unless they can find a way of making the economy grow.
Hunt has wittered on about making encouraging enterprise, tackling poor productivity, and getting more people into better paid jobs, yet these are just words.
At times he seems as fanciful as Truss, when he talks about making the UK “the next Silicon Valley”.
It’s all very well throwing around fancy phrases like “digital technology, green industries and life sciences”, but he has to make them work.
Good luck with that.
Incredibly, for a Tory Chancellor, cutting taxes was the easy bit.
If Hunt or anybody else is ever going to cut them again, we need that growth first.
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