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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is UK prime minister
The theatrical impulses of Westminster have long seemed out of step with the need to communicate a stable plan for change. And nowhere is this tension starker than at Budget time. Over recent years we have watched successive chancellors pull increasingly threadbare “rabbits” from the hat as government policy veered around under an ever-changing cast of prime ministers.
You can’t underestimate the damage this chaos did to our growth and standing with investors. And nor should we undervalue the investment premium that political stability can attract in an ever more volatile world. That is why our recent international investment summit celebrated £63bn-worth of private investment into the British economy. But I want that to be just the start. The decisive election result has handed us a golden opportunity to set this country on a path to sustainable growth — a decade of national renewal. What I hear time and again from my conversations with businesses and CEOs is the enormous value of certainty. That is exactly what this government is offering.
It was work Rachel Reeves, Britain’s first-ever woman chancellor, continued this week. Make no mistake, the choices she made have prevented devastating austerity in our public services and a disastrous trajectory for our public finances, had we stuck to Tory plans. She wiped the slate clean, fixed our foundations and began the resolute work of rebuilding. But everything she did was built upon that steadfast commitment to economic stability and policy certainty.
Our tough fiscal rules — which we will meet two years early — lock in stability by guaranteeing day-to-day costs will be covered by revenues. Meanwhile, our “corporate tax road map” will provide boardrooms with a stable and competitive framework for long-term investment. Corporation tax has been fixed, full expensing capital allowances sustained and crucial start-up investment reliefs — such as the Enterprise Investment Scheme — have been extended until 2035. This is vital for new businesses. I am determined that Britain maintains its position as Europe’s leading technology sector and a world-leading place for entrepreneurs. Future growth depends on supporting risk-takers through an age of artificial intelligence transformation.
Yet while we have always said economic stability is the first step on our mission for growth, the Budget also opened the door on the next stage of our plan: reform. Just as we cannot tax and spend our way to prosperity, nor can we simply spend our way to better public services. That is why reform is an essential pillar of this government’s agenda. Reform of our creaking central state. Reform of our public services. And reform of our economy, with a modern supply-side agenda ready to take advantage of our new climate for investment.
Retailers plagued by shoplifting; transport infrastructure that seldom works; 6mn people waiting for an NHS treatment — these are not just social challenges; they are also profound economic supply challenges. Our investment this week will start that job. And our partnership approach on industrial policy means we can minimise the risk this crowds out valuable private sector activity. After all, we know that growth is a shared mission.
But investment is only part of the answer — if we want Britain growing again, then we need to get Britain working again. The Budget set aside new funding for welfare reforms that will help people back to work. Finally making work pay will be good for long-term productivity. However, perhaps most importantly of all for growth, we will also get Britain building again.
I have spoken to hundreds of leading CEOs over the past few years and I am convinced the biggest supply-side challenge we face is the way overweening regulators and a dysfunctional planning regime combine to stop our country building. Homes, warehouses, laboratories, grid connections — billions upon billions of private investment in the infrastructure of tomorrow is held up or blocked outright in this way. We have ambitious plans to bulldoze through those barriers.
Mandatory housing targets have been restored. Planning reforms, including the release of “grey belt” land, are in train. Clean energy projects have been quickly signed off — a signal of our intent. New planning passports will grant default permission on certain brownfield sites. And a rapid review of regulators is under way that will root out the bureaucracy that stifles growth.
This process involves detailed, often painstaking work. For that reason, it is not yet ready to be included in the OBR’s forecast for growth. However, we should be optimistic about the potential. A “big build” could become as transformative for working people as the Big Bang was for the City of London in the 1980s.
This government is determined to make the UK one of the best places to invest and do business, not just in Europe but the world. Only by working in partnership with the private sector can we deliver change, fix the NHS, rebuild Britain and make good on our promise of a decade of national renewal.