Chancellor Jeremy Hunt will dismiss misplaced “gloom” about the prospects for the UK economy, saying Britain stands ready to take advantage of its Brexit “freedoms” to become a new world leader.
In a keynote speech on Friday, he will deliver an upbeat message, saying: “Declinism about Britain was wrong in the past and it is wrong today”.
But despite the optimistic tone, the Chancellor is expected to continue to resist calls from some Tory MPs for tax cuts to kick-start flagging economic growth.
Instead he will say the UK should exploit the opportunities provided by the UK’s withdrawal from the EU to raise productivity while using the proceeds of growth to support public services.
His address comes after a Cabinet away day at Chequers on Thursday, where the Chancellor said ministers they must maintain their “disciplined approach” if they are to get inflation under control.
Speaking at Bloomberg’s European headquarters in London, Hunt will say that some of the “gloom” about the current economic outlook is based on statistics which “do not reflect the whole picture”.
“Like every G7 country, our growth was slower in the years after the financial crisis than the years before it,” he will say, according to advance extracts from his speech released by the Treasury.
“But since 2010, the UK has grown faster than France, Japan and Italy - since the Brexit referendum, we have grown at about the same rate as Germany.
“If we look further ahead, the case for declinism becomes weaker still, the UK is poised to play a leading role in Europe and across the world in the growth sectors which will define this century.”
Hunt will say that what the UK Government offers is a plan for “long term prosperity based on British genius and British hard work”, adding: “It is a plan necessitated, energised and made possible by Brexit which will succeed if it becomes a catalyst for the bold choices we need to take.
“Our plan for growth is a plan built on the freedoms which Brexit provides. It is a plan to raise productivity.
“It is a plan to use the proceeds of growth to support our public services at home, to support businesses in the new low-carbon economy and to support democracy abroad.”
Hunt will also use his speech to announce that the government is to proceed with reforms to Solvency II – an EU directive that governs the amount of funds British insurers are required to hold in reserve.
The Treasury pointed to an estimate by the Association of British Insurers which suggested the changes could unlock up to £100bn of private investment into UK infrastructure and clean energy – such as nuclear power – over the coming decade.
Hunt is facing calls from some Tory MPs to cut taxes in his budget in March to inject growth into the economy.
But at Chequers on Thursday, both he and Prime Minister Rishi Sunak emphasised the priority remained inflation which was only predicted to fall because of the “tough decisions” taken to stabilise the economy following former Prime Minister Liz Truss’s catastrophic mini-budget tax giveaway.
“The Chanceloor said it would be necessary to retain this disciplined approach in order to reduce inflation, because it is the greatest driver of the cost of living,” according to a No 10 readout of the meeting.
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