Britain is turning a corner but must back wealth creation and ensure prosperity reaches every region if it is to solve its woes, John Healey will say in his first major speech as chancellor.
As he seeks to reassure nervous markets over Labour’s stewardship of the economy, he will also argue fiscal credibility is “indivisible” from growth.
Laying out his vision on Monday just weeks before what is expected to be a painful Budget, he will say: “I want to see wealth creation in this country. I want to see businesses make a profit… (and) we need an active, accountable state at all levels to remove blockages and create the conditions for more investment.”
open image in galleryNew PM Andy Burnham has set out a “clear diagnosis” of the problem and the “solution” is a “fundamental shift that starts with putting power in the right places”, he will say.
That starts with strong city regions that bring government, local leaders and businesses together to chase investment and jobs instead of “getting in the way with complexity and red tape”.
Growth will tell a new story about Britain, he will say in his address in the Midlands, “an optimistic story. One of resilience. Pride. Huge latent potential. A country turning a corner. A country whose people, businesses and communities are ready to seize the opportunity of new technologies and new ideas.”
Despite the upbeat tone, he will come under pressure to rule out tax rises, after the PM failed to do so, and to reassure jittery markets.
UK government borrowing costs reached their highest level since the 2008 global financial crisis last week, in part thanks to continued instability caused by the Iran war.
On Saturday, ministers published plans to slash outdated reporting rules, saving businesses more than £450 million a year in total.
Mr Healey will also announce £150m from the British Business Bank for northern scale-ups “to get behind the most innovative and fast-growing firms”, a move which he will insist is not “sentimentality” based on the PM’s birthplace, but instead is “supply side economics”.
open image in galleryShadow chancellor Andrew Griffith accused him of a “policy-light word salad from a chancellor who seemingly does not understand how growth is created. It will do little to comfort hard-working families and businesses across the country who are worried about more tax rises or the fact that government borrowing rates are near a 28 year high.
“Commitments to reduce red tape are welcome but given this Government’s track record with its Employment Rights Act and other anti-business measures, people will rightly question their sincerity.
“We are facing serious threats from Russia and Iran on our doorstep, as well as threats to the Falkland Islands. Yet the chancellor, the man who resigned over defence spending, seemingly does not want to mention our Armed Forces or how we will reach 3 per cent of GDP on defence.
Reform’s Treasury spokesman Robert Jenrick said: “Even Rachel Reeves had more vision than this guff. Days after a market meltdown, when grip and direction are required, John Healey has revealed himself to be an empty vessel with no idea about how to rescue our economy.
“He won’t cut the ballooning benefits bill, foreign aid, or net zero subsidies so taxes on working people will inevitably rise at the budget. Reform is the only party that will cut wasteful spending so we can raise the tax-free personal allowance to £15,000 in our first budget.”