Jon Pearce: Events, dear boy, events – and why growth must be our priority
“We are in a better position than we have been for years, but we have a great deal of lost ground to make up.”
“Events, dear boy, events.” Harold Macmillan’s famous observation feels particularly relevant as we look ahead to the Budget.
The conflict in the Middle East and disruption to global energy markets have created enormous uncertainty. But for that we would have significant optimism about the resilience of our economy and its prospects for the future. The recent annualised growth figures of 2.7% from Jan-August is the strongest start to a year since 2017 (excluding the pandemic bounce back).
Indeed, there is evidence that the economy is returning towards the sort of performance we saw before Brexit and the financial crisis.
That matters. For too long, Britain accepted weak growth as inevitable. Brexit made our economy worse, not better, while a decade of Tory austerity held back investment and damaged our public services.
We are in a better position than we have been for years, but we have a great deal of lost ground to make up.
Here in High Peak, there are encouraging signs, too. My Careers, Skills and Jobs Fair gets bigger and better each time. At the latest event in Glossop, more than 40 exhibitors joined hundreds of local residents, from school pupils exploring their options to people looking for a new career or a chance to retrain. The range of employers, apprenticeships and opportunities on offer was a real reminder of the strength of our local economy and the benefits of our links with Greater Manchester, one of the UK’s strongest economic regions.
But growth must translate into better living standards. The crisis around the Strait of Hormuz threatens another squeeze on household budgets, particularly through energy bills. The Prime Minister has acted to provide some breathing space, including cutting tax on household electricity bills; committing to cap single bus fares at £2 from January; and business-rates relief for pubs and other local venues.
We must do everything we can to protect families from immediate pressures. But we cannot permanently insulate ourselves from global shocks unless we change the way our economy works. That means generating more of our own renewable energy to bring the costs down and becoming less dependent on dictators and volatile international markets.
Ultimately, the only lasting answer to the cost-of-living crisis is an economy that grows and delivers rising wages, better opportunities and greater security. That must be our overriding priority. We need to seize every opportunity: rebuilding our economic relationship with Europe, removing unnecessary barriers that hold businesses back, and harnessing AI to improve productivity while ensuring it is properly regulated and works in the public interest.
Our new Chancellor has an opportunity to build on the foundations already laid. Difficult decisions have been necessary to fix the foundations of our economy. We must continue to bring debt down and maintain sound public finances. But growth is not a distraction from that task; it is essential to achieving it. That is the only way to limit the impact of events we cannot predict or control.