Chancellor of the Exchequer John Healey has declared that the UK economy is “turning a corner” and pledged to rein in public expenditure ahead of next month’s Budget, while also vowing to ease the growing pressure on businesses.
Delivering his first major address since taking charge at the Treasury, Mr Healey acknowledged the strain of high government borrowing costs and set out an ambition to double the number of “unicorn” firms in the country.
Addressing the fiscal challenge
Speaking in Coventry at the Manufacturing Technology Centre, Mr Healey sought to strike an upbeat tone about the UK’s economic outlook, despite ongoing turbulence caused by global crises including the conflict in the Middle East and Russia’s invasion of Ukraine.
He said: “The Prime Minister and I are in lockstep in our commitment to meeting the fiscal rules at the upcoming Budget, to balancing the books with a buffer to protect against uncertainty. To controlling borrowing to bear down on inflation and reducing long-term pressures on our public finances.”
He argued that the mounting cost of debt interest demonstrated that “staying true to our values means being honest about the need to control government spending”.
Optimistic story for the economy
Yet he maintained there remained an “optimistic story” to be told about the UK economy, which he said possessed “huge latent potential”.
“It is a country turning a corner, a country whose people, businesses and communities are ready to seize the opportunity of new technologies and new ideas,” he said.
Outlining his vision for the economy, Mr Healey confirmed the Government would extend its overhaul of judicial review from energy projects to encompass all major infrastructure schemes. He stated the reforms would ensure “vexatious litigation and challenge can’t block economic growth”.
Fiscal devolution and regional growth
The Chancellor also reaffirmed the Government’s pledge to devolve power away from Whitehall, announcing he would unveil a “roadmap to fiscal devolution” at next month’s Budget.
He said: “London, of course, is our powerhouse, but if our city regions could emulate the success of those in France or Germany, growth in our country would be transformed.”
In advance of that, he revealed the British Business Bank would be injecting £150 million into high-growth firms across the North of England, while also announcing the establishment of a “Northern 500” collective of “the North’s most ambitious mid-sized businesses”, to be led by regional mayors.
Doubling unicorn firms and testing new technology
Mr Healey said he wanted twice as many “unicorn” firms in the UK and to make it easier for businesses to test new technology.
“So, I’m setting an ambition now to double the number of unicorn firms in this country,” he said.
He said he would also aim to have “sandboxing” powers in place so businesses and innovators can test technology from pavement robots to drones to life-saving medical equipment, which he said regulation currently prevents.
