Chancellor Jeremy Hunt has pledged to get millions of people who retired early during lockdown back into work – as he outlined a vision of using Brexit to drive economic growth.
Warning that businesses would struggle to grow if they cannot find enough staff, Mr Hunt told those who opted out of working life before retirement: “Britain needs you”.
He also said it was time for a fundamental programme of reforms to support people with long-term conditions or mental illness to overcome the barriers and prejudices that prevent them from working.
In his first big speech since November’s autumn statement, the chancellor also said he would prioritise cutting inflation over cutting taxes.
The “best tax cut right now is a cut in inflation”, he said, promising investment outside London as part of the government’s levelling-up agenda.
“We will never harness the full potential of our country unless we unlock it for each and every one of our citizens. Nor will we fix our productivity puzzle unless everyone who can participate, does,” the chancellor said.
“So, to those who retired early after the pandemic, or haven’t found the right role after furlough, I say: Britain needs you. And we will look at the conditions necessary to make work worth your while.”
Britain needs you. And we will look at the conditions necessary to make work worth your while— Jeremy Hunt, Chancellor of the Exchequer
Speaking at Bloomberg’s London HQ, Mr Hunt said reducing inflation was the “only sustainable way to restore industrial harmony” in Britain, suggesting tax cuts would have to wait.
Halving inflation is one of the top five priorities that prime minister Rishi Sunak has already set out in the run-up to the next general election.
Public-sector workers ranging from nurses and ambulance crews to highways-maintenance staff have staged strikes over pay since the autumn.
And economists are predicting the UK could be heading for a recession deeper than previously thought, with inflation standing at at least 10 per cent.
The chancellor said: “My party understands better than others the importance of low taxes in creating incentives and fostering the animal spirits that spur economic growth. So the best tax cut right now is a cut in inflation.”
Mr Hunt also used his speech to lay out a plan for Brexit to become a “catalyst” for growth, while announcing measures designed to increase prosperity outside southeast England and London.
Our plan for growth is necessitated, energised and made possible by Brexit— Jeremy Hunt
The chancellor said he wanted to reverse what he called a “declinism” attitude in Britain, declaring that the country’s economy had “grown at about the same rate as Germany” since the 2016 European Union referendum.
He said Brexit should be looked at as an opportunity to “create an economic environment which is more innovation-friendly, and more growth-focused”.
“Our plan for growth is necessitated, energised and made possible by Brexit,” he said.
“We need to make Brexit a catalyst for the bold choices that will take advantage of the nimbleness and flexibilities that it makes possible.”
Mr Hunt said levelling-up across the UK formed part of one of his so-called four “E” pillars against which he would assess growth policies: enterprise, education, employment and everywhere.
Unveiling proposals to drive regional economic prosperity, he said the Treasury would identify investment zone sites that could be turned into “mini-Canary Wharfs”.
The regeneration of the docklands area since the 1980s has led to the creation of a major financial centre in east London.
Promising to provide “high-potential but underperforming areas” with “advantageous fiscal treatment to attract new investment”, he said work on identifying the locations would start shortly.
But Rachel Reeves, the shadow chancellor, said: “Thirteen years of Tory economic failure have left living standards and growth on the floor, crashed our economy, and driven up mortgages and bills.
“The Tories have no plan for now, and no plan for the future. It’s time for a Labour government that will build a better Britain.”
Unions said accused Mr Hunt of “ignoring the massive staffing crisis in schools, hospitals and care homes” and of signalling cuts to services.
TUC general secretary Paul Nowak said: “The chancellor is ignoring the massive staffing crisis hitting our schools, hospitals, care homes and other key services.
“Public servants will be deeply worried about the chancellor’s warnings of further restraint. We know that is usually code for cuts.
Unison general secretary Christina McAnea said: “The chancellor holds the key to unlock the damaging health pay dispute and rebuild the NHS, but he’s not even trying.
“Paying proper wages will halt the staff exodus and mean there’s more money to spend in the local high street.”
Liberal Democrat Treasury spokesperson Sarah Olney said: “This Conservative Party sounds like an unfaithful partner asking for yet another chance.
“But after crashing the economy and sending mortgages sky-high, why should we trust them again?
“Jeremy Hunt’s speech is cold comfort for families and pensioners facing unbearable price rises.”
Business groups gave a lukewarm reaction. Tony Danker, CBI director general, said: “He now has a strong framework for growth. And we hope the Budget in less than two months will show strong actions to move us forward.”
