October 03, 2022

Our plan for the economy

Kwasi Kwarteng, Chancellor of the Exchequer, addressed Conservative Party Conference 2022 on our plan for the economy.

Here is what he said:

Thank you, conference.
What a day!
It has been tough, but we need to focus on the job in hand.
We need to move forward.
No more distractions. We have a plan, and we need to get on and deliver it.
That’s what the public expect from their government. 
But first conference, welcome back to Birmingham.
This is a remarkable city.
It has a history of great brilliance
Joseph Chamberlain in the nineteenth century was an extraordinary civic leader who led Birmingham and the world through the industrial revolution.
And today Andy Street is following in that great tradition.
Grafts and grit turned this small town first into a thriving industrial market.
Then into one of the centres of the industrial revolution…
Which powered and grew not just the British economy,
But provided the new technologies that changed the world forever. 
The Industrial Revolution was one of the most monumental transformations in human history.
And it began here.
With determination and application
Those Britons built a thriving economy.
They inspire me today.
They remind us that in Britain, with the British people, absolutely anything is possible. 
Our Plan today focuses on the same, bold sentiment.
The same inspiration
To deal with the challenges of today by giving people the tools they need to thrive tomorrow.
To get Britain moving.
We have great ideas
We have the same inspirational people
And I know we have the same determination.
Our Growth Plan set out ten days ago will ensure we focus relentlessly on economic growth.
Because we must face up to the fact that for too long our economy has not grown enough.
The path ahead of us was one of slow, managed decline.
But I refuse to accept that it is somehow Britain’s destiny to fall back into middle league status…
…or that the tax burden reaching a 70-year-high is somehow inevitable. 
It isn’t, and it shouldn’t be.
Conference we needed a new approach, focused on raising economic growth. 
Because that is the only real way to deliver opportunities, to deliver higher wages, to deliver more jobs, and crucially, to deliver that revenue to fund our precious public services…
…and it is the best and only way of achieving long-term fiscal sustainability.
Because it is only by raising economic growth that we will spread opportunity and prosperity to every corner of our country. 
With economic growth, everybody benefits. 
And I mean everybody.
Whilst we all believe in growth
We as Conservatives also believe, it is an important principle that people should keep more of the money they earn. 
I don’t need to tell you that. That isn’t radical. That isn’t irresponsible. 
It is a deeply held belief that we all share as Conservatives.
We were faced with a 70-year high tax burden,
… we were confronted with low growth
… and the path we were on was clearly unsustainable.
So that’s why we are cutting taxes for working people. 
That’s why we will reverse the National Insurance hike on the 6th November. 
And that’s why we will bring forward the 1p cut to the basic rate of Income Tax by one year.
And that’s why we will take 200,000 people out of paying Stamp Duty altogether. 
Taken together … this is what our support will do for all our people.
Thanks to our energy intervention, a typical person in a semi-detached property will save £1,150 on their energy bills this winter. 
On top of the £400 discount. 
And if they are earning an average salary, they will benefit from an additional tax cut of around £400.
That is almost a TWO-THOUSAND-POUNDS saving this year alone.
But I can be frank, I know the plan put forward only ten days ago has caused a little turbulence.
I get it. We are listening and have listened.
And now want to focus on delivering the major parts of our growth package because with…
Energy bills skyrocketing
A painful Covid aftermath
War on our continent
A 70-year high tax burden
Slowing global growth rates
And glacially slow infrastructure delivery:
We couldn’t simply do nothing.
We can’t sit idly by.
What Britain needs more than ever is economic growth…
And a government wholly committed to economic growth. 
That is why we will forge a new economic deal for Britain… 
…backed by an ironclad commitment to fiscal discipline.
More businesses. More jobs. Higher pay. More money for public services.
Because we cannot have a strong NHS without a strong economy. 
We can’t have good schools without a strong economy. 
We cannot fund our Armed Forces without a strong economy. 
So growing our economy should be our central and guiding mission. 
With this plan, we are aiming for two and a half percent annual trend growth.
We have done it before, and we can do it again. 
And even in the face of extreme volatility in global markets…
…with major currencies wrestling an incredibly strong US dollar…
…and longer-term trends from demographic change to climate change…
…we will show that our plan is sound, that it is credible and that it will increase growth.
That is our pledge to the people of this country. 
However, there is an immediate challenge facing not just our country, not just our people, but the whole of Europe…
The high cost of energy driven by Putin’s barbaric invasion of Ukraine. 
Cast your mind back just four weeks ago. 
We had dire warnings of extreme energy prices to come. 
Corner shops to heavy industry predicted unprecedented disruption. 
Business groups feared mass unemployment.
Entire livelihoods were on the line. 
Make no mistake, this was a very real prospect for our country. 
So, within 48 hours of taking office, we announced one of the most significant interventions ever conceived by the British state…
Annual energy bills of up to £6,500 from next year were staring us in the face.
Everybody was worried.
Now, we are holding down the price at an average of £2,500.
Not just this winter like the Labour Party promised… but next winter too. 
Two years of significant taxpayer support to protect our people.
Because THIS government will always be on the side of those who need help the most.
For our businesses too, Conference, help is on its way. 
A local pub could save £3,100 a month, cutting their bills by 40 per cent. 
And we have also frozen Alcohol Duty!
Make no mistake, this is a monumental support package to protect millions of families and businesses from devastating price hikes unleashed by Vladimir Putin. 
There is no doubt that this is a substantial intervention, but we had no choice.
Doing nothing was simply not an option. 
We couldn’t just cross our fingers and hope for the best. 
The price of inaction would have been far greater than the cost of the scheme.
We will deal with the short-term shocks caused by Putin…
But we must also go for growth to ensure we are much more self-sufficient.
We will tackle the mistakes of the past to ensure the UK can NEVER again be blackmailed by people such as Putin and his like.
When Covid hit our shores, we were right to intervene to protect lives and livelihoods.
And I can say – in all sincerity – that we went into that crisis in a much better position because of the action we have taken over the last decade.
Because of successive Conservative governments, the UK now has the second lowest debt to GDP ratio in the G7.
And throughout this urgent endeavour of ours to protect Britain from high energy costs… and in response to…
… the urgent need to grow our economy… we have taken the appropriate action.
Our entire approach will be underpinned by a strong institutional framework, which enhances growth in our country…
…including our independent Bank of England and Office for Budget Responsibility.
We will have a strong fiscal anchor with debt falling as a proportion of GDP over the medium term. 
That is the Conservative way.
But today, we face new challenges. 
And in addressing those challenges, we will act in a fiscally sustainable and responsible way. 
That is why, shortly, we will publish our Medium-Term Fiscal Plan setting out our approach more fully.
It will set out how we plan to get debt falling as a percentage of GDP over the medium term.
And I have asked the OBR to publish a full economic and fiscal forecast alongside our Medium Term Fiscal Plan.
There is no path to higher sustainable economic growth without fiscal responsibility.
Conservatives have always known this and we know it still.
And it is because we are Conservatives, that we must remain absolutely committed to being serious custodians of the public purse. 
This is what defines us – and separates us from the Labour Party
But conference, to grow the economy we really do need to do things differently.
We know that it is our towns and cities which drive much of our economic growth today.
Business investment, skills, science and technology, infrastructure, housing, energy supply, strong financial services…
…these are the key ingredients for higher economic growth and well-funded public services.
I had the great privilege of being Business Secretary for nearly 2 years.
I visited every corner of this country.
I saw the creativity, the drive, the entrepreneurial spirit.
We have to celebrate our entrepreneurs, our business people, our job creators, people who are taking risks…
But I also saw where government got in the way of progress.
My job now is to free that potential.
This starts with Investment Zones.
We will empower local areas to do things differently, just as here in Birmingham.
We will liberalise planning rules, releasing land and accelerating development.
We will cut taxes for business in these zones.
We will accelerate tax reliefs for new structures and buildings.
We will provide relief on investments on plant and machinery.
We will lower taxes which stop businesses hiring and skilling up their workforce.
That is an unprecedented set of incentives for business to invest, to build, and to create jobs right across the country.
And it will start right now.
Conference, we will…get… Britain… moving. 
But too often regulation holds business and Britain back.
Stifling red tape puts up too many barriers for entrepreneurs looking to scale up… 
…there are too many rules for the small business owner who wants to take on an apprentice
… there are too many burdens on our finance sector stopping it from investing in key projects
And when Britain’s innovators, job creators, entrepreneurs and risk takers are held back…
…so is Britain. 
That is why we will review, replace or repeal retained EU law holding our country back.
We will also speed up the delivery of infrastructure and promote house building to create a true home owning, shareholding democracy. 
Unapologetically, and emphatically we will get out the way to get Britain building and on its feet.
Over the coming days and weeks, we will forge ahead and break down the barriers that have held our country back for too long. 
On childcare, agriculture, immigration, planning, energy, broadband, business, financial services…
Sensible, economic reforms to produce more of the products and services we need to drive down costs.
To create jobs
And generate higher pay and productivity.
And when it comes to those who would hold us back, we will act. 
Pernicious strike action disrupts the lives of the British people and it slows down our economy.
It stops children going to school.
It stops parents from going to work.
And it stops people from getting the vital care they need. 
Action which slows down our economy cannot be the policy of any serious party serious about growth.
And a party which is not serious about growth, can never be considered fit for office.
So, we will introduce important reforms to stop strike action from derailing our daily lives.
Reform to get Britain moving.
Conference, I am unashamedly a pro-business Conservative.
I know that the interests of businesses and hardworking families are not in conflict. They are aligned.
When businesses thrive, they create more jobs, they raise wages, and they contribute more for our public services.
Rather than bashing business, we’re backing it.
That is why we need to make our tax system simpler, more competitive and pro-growth.
So, we will reverse the planned increase in Corporation Tax, ensuring we have the lowest rate in the G20.
This will plough almost £19bn a year back into the economy.
That’s £19bn for businesses to reinvest, to create jobs and raise wages.
We will reverse the reforms to IR35 that have added unnecessary complexity and cost for so many businesses.
We will maintain the £1 million Annual Investment Allowance, giving 100% tax relief on investments in plant and machinery. 
For over a decade, the Conservative Party has stood up for working people in this country.
Since 2010, we have delivered:
● The lowest unemployment since the 1970s
● A million new businesses
● More than doubling the tax-free personal allowance
● We have taken 2 million of the lowest paid OUT of paying tax altogether.
● The National Living Wage, boosting the pay packets of the lowest paid
● Fuel duty, frozen for 12 years.
● The £1,000 uplift in Universal Credit, making sure work always pays. 
These are great achievements. Conservative achievements. 
And let us not forget…
When this Party came into Government – we were met with the full force of Labour’s economic incompetence.
● ‘No money left’
● Taxes raised
● Record unemployment.
We reversed that story of national decline.
But even after three election defeats, they still haven’t learned their lesson.
The Labour Party would have you believe that every penny you earn should go straight into the Government’s coffers.
The Labour Party believe that they know how to spend your money better than you do.
The Labour Party believe that you can tax your way to growth. 
We don’t believe that.
We believe in low tax, high growth and fiscal discipline. We are Conservatives.
And that’s what our growth plan delivers.
Last week we saw a Labour Party with the same old ideas
… empty slogans
… and no plan for growth.
But we as Conservatives believe in Britain.
We love this country, our patriotism, isn’t something that we turn on and off and negotiate like the Labour Party
It goes to the core of what it is to be a Conservative… it is an unyielding quality.
Yes we have challenges to face.
But our plan will take this country forward.
We will get Britain moving. 
We will deliver lower taxes for you and your family.
And we will grow our economy.
I know we can achieve that goal.
With grit, with drive and with determination
We can meet the challenges of this new era.
Thank you.