Chancellor unveils his long-term vision

Last month, Chancellor of the Exchequer Jeremy Hunt set out his long-term vision for the UK economy in a speech delivered at Bloomberg’s UK  headquarters in the City of London. 

The Chancellor warned that the UK must not succumb to “declinism” and said his priorities included halving inflation, lowering national debt and growing the UK economy. Some of the key points outlined during his speech were:  

  • Mr Hunt said that his plan for growth would be based on what he called his “four pillars” or “the four E’s” of economic growth and prosperity. These are Enterprise, Education, Employment and Everywhere 
  • The Chancellor confirmed the government would be introducing Investment Zones, termed “mini-Canary Wharfs,” across the country to support each of our growth industries and help reverse economic migration to the South East of England. He said each one would be focused on the country’s “research strengths” in “high-potential but underperforming areas” and that a process to identify exactly where they will go would start soon 
  • Mr Hunt emphasised that his plan for growth was “built on the freedoms which Brexit provides” and talked of the opportunity for business reform and changes to regulations that would provide innovative companies with easier access to cash 
  • On taxes, the Chancellor stressed “the importance of low taxes in creating incentives and fostering the animal spirits that spur economic growth.” However, he appeared to rule out any significant tax cuts in next month’s Budget, arguing that the “best tax cut right now is a cut in inflation.” 

Business reaction 

While business groups did welcome the sentiments expressed in the Chancellor’s speech, they also voiced concerns that his growth plan was noticeably short on detail: 

“The Chancellor is right to be optimistic for the future of British businesses which are desperate to grow and prosper. But beyond pledges to introduce Investment Zones and to use reform of Solvency II to unlock capital there was very little meat on the bones of the Chancellor’s vision.”  

Shevaun Haviland, British Chambers of Commerce Director General  

“There is much to get behind here with the Chancellor’s emphasis on using innovation as the foundation of the UK’s future economy. He now has a strong framework for growth. And we hope the Budget will show strong actions to move us forward.”   

Tony Danker, Director-General of the Confederation of British Industry 

“The Chancellor himself said his speech was “not a series of measures or announcements”. We would therefore add a fifth E for ‘Empty’ to his 4 E’s economic framework.” 

Kitty Ussher, Institute of Director’s Chief Economist