Britain’s finance minister, John Healey, used his first major speech since taking office seven weeks ago to try to set out a brighter vision for the economy before an annual budget when he faces tough tax and spending choices.
Speaking at a manufacturing hub in central England, Healey announced plans on Monday to give city regions greater powers to attract private investment as part of Prime Minister Andy Burnham’s plan to devolve power away from central government.
He also stressed his commitment to fiscal discipline and to curbing rising costs for business and the public, including a 25% reduction in regulatory costs by the next election due in 2029.
Yet much of what Healey said about his focus on growth, reducing regulation and lowering the cost of living was a continuation of the policy of his predecessor Rachel Reeves and former prime minister Keir Starmer.
“While Britain’s growth trajectory has been weak, this must now change,” Healey said, pointing to positive signs from fast growth in the first half of the year and signs that “productivity (is) finally ticking up after decades of lagging behind our peers”.
CHALLENGE UNDERLINED BY JLR JOB CUTS
However, the challenge facing Healey was laid bare by an announcement while he spoke that Britain’s biggest car maker, Jaguar Land Rover, planned to cut 4,000 jobs worldwide over the next two years.
Asked about the threat to jobs, Healey said it showed how the government needed to focus on developing growth broadly across Britain, rather than relying on a handful of major economic centres.
Several earlier governments have made spurring growth their focus with limited success.
Healey talked about wanting to set out an optimistic vision for Britain, in contrast to Reeves who used some of her first speeches as finance minister to dwell on the difficult budget legacy she was left by previous Conservative administrations.
Reeves’ first budget shocked businesses with a big rise in employers’ payroll taxes. Healey repeatedly declined to comment on his tax plans before his debut budget on October 28, as investors worry about the inflationary impact of rising oil prices from the Iran war, shrinking budget headroom, and rising spending commitments.
Andrew Griffith, finance policy chief for the main opposition Conservative Party, said Healey sounded like “continuity Rachel Reeves”. “Warm words about growth will not make growth a reality,” he said in a statement.
HEALEY REAFFIRMS PLEDGE ON FISCAL RULES
Healey and Burnham have already pledged to stick to the fiscal rules adopted by Starmer and Reeves, including a target of balancing day-to-day spending with tax revenues by the end of the decade.
But given Burnham’s plans for expanded social care and more defence spending, Healey is already under pressure to raise billions of pounds in tax at the budget.
“Staying true to our values means being honest about the need to control government spending,” Healey said, highlighting the rising cost of servicing government debt as interest rates globally have soared to multi-decade highs.
Healey on Monday announced £150 million ($203 million) of funding already allocated from the British Business Bank will be earmarked for firms in northern England, pumping in between £5 million and £15 million to attract additional private capital.
Legal challenges to big infrastructure – usually made on environmental grounds – would be restricted and the government would investigate the high cost of delivering new railways, he added.
“The role of government is to act, and I’ll end the consultation culture at the Treasury and beyond,” he said.
($1 = 0.7396 pounds)
(Reporting by Andy Bruce）
