Jeremy Hunt has no plan for growth, says CBI bosson November 20, 2022 at 1:35 pm

The chancellor’s Autumn Statement offered no plan to revive economic growth, the head of the UK’s biggest business lobby group has told the BBC.

Tony Danker from the Confederation of British Industry (CBI) said Jeremy Hunt had instead prioritised stability.

Mr Danker said that without higher growth, the UK would not afford the growing cost of health and social care.

The health secretary said that post-Brexit freedoms would boost the country’s “high growth” industries.

In his Autumn Statement last week, Mr Hunt laid out £55bn of spending cuts and tax rises aimed at bringing down soaring prices while protecting public services.

At the same time, the government’s economic forecaster warned households would see their biggest drop in living standards on record in the next few years as living costs surged and the country fell into recession.

Speaking on Sunday with Laura Kuenssberg, Mr Danker said Mr Hunt’s statement had been “all about fighting inflation and getting the government budget in some decent shape and that does need to be done”.

But he added that “there was really nothing there that tells us the economy is going to avoid another decade of low productivity and low growth”.

“Jeremy Hunt did some things which will be very welcome, but he also made businesses and everybody pay more taxes and so the fear is there just wasn’t enough there to turn round and say, ‘we can grow again’,” he said.

“So I don’t think he did enough, I think he is going to have to come back with more.”

Mr Hunt’s Autumn Statement was in large part designed to reassure financial markets after the controversy sparked by his predecessor’s mini-budget in September.

Kwasi Kwarteng promised major tax cuts to boost growth, but the unfunded plans spooked investors and caused government borrowing costs to spike.

Mr Danker, who initially welcomed elements of the former chancellor’s plans, told the BBC that the tax cuts had clearly backfired.

However, he said other of Mr Kwarteng’s proposals – such as relaxing immigration, regulation and planning laws – needed to be looked at again.

The CBI, which represents 190,000 UK businesses, will see its annual conference kick off on Monday.

The UK economy has lagged behind those of other developed nations over the last decade and the country is expected to be in recession all of next year.

Part of the problem is global, with energy and food prices soaring this year due to the war in Ukraine and Covid.

But the UK also faces significant labour supply challenges, while it is more difficult for small businesses to trade with Europe or access the talent they need due to Brexit.

According to a report in the Sunday Times, senior government officials are now looking at how to build closer ties with the European Union as a way to boost growth.

This could see the UK move to a Swiss-style arrangement, where it paid into the EU budget to remove trade barriers, although it would not accept freedom of movement as Switzerland does, the paper reported.

Steve Barclay, the former Brexit Secretary, told Laura Kuenssberg he did not “recognise that story” and it was not on the cards.

He also said Mr Hunt had taken action in the Autumn Statement to promote growth.

“We’ve protected the research and development budget increase up to £20bn. We’ve got £600bn of infrastructure investment. We are seizing the greater opportunities of our freedoms through Brexit.”

He said the UK would now use its “regulatory autonomy” to find new opportunities in high growth industries such green energy, digital, financial services and life sciences.