Business

Chancellor’s ‘Britain needs you’ plea to the retired may be a tall order

Jeremy Hunt became chancellor because he was the most sensible candidate left standing in the wake of Liz Truss’s catastrophic mini-budget.

Four months on, he’s earned praise for balancing the books but still had a blank space to fill in when it comes to growth – a crucial plank of economic policy in danger of becoming a dirty word after Truss pursued it over a cliff edge.

The economic circumstances remain deeply challenging, with inflation running above 10%, interest rates on the rise and public sector workers demanding pay rises while business and Conservative backbenchers want tax cuts to incentivise investment.

Two months before his first budget, the chancellor was not about to blow a reputation for rectitude by announcing detailed new policy.

Instead, we got a speech that, in tone if not style, could have been delivered by Boris Johnson, recasting the economic challenge as a debate between optimists and pessimists.

Brexit, Mr Hunt said, remains the opportunity on which future prosperity will be based, despite the myriad challenges reported by businesses at the sharp end.

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He had statistics to prove it. Britain has performed “about as well” as Germany since 2016 and better than Japan, Italy and France on one measure of GDP since 2010.

Asked by Sky News whether it would be more honest to acknowledge that Brexit had failed to live up to promises, he said no.

“It’s a big change in our economic relations with our closest neighbours and of course that is going to need adaptation,” he said.

“Of course there is some short-term disruption, but I think it’s completely wrong to just focus on that without looking at the opportunities.”

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1:15

‘Brexit is an opportunity’

Anyone denying the UK was well-placed to thrive was peddling “declinism”, a characterisation with echoes of Johnson’s “gloomsters” that channelled the crudest divisions of the referendum debate.

Those guilty, Mr Hunt said, include newspaper columnists on the left and right, and the Labour Party.

Judging by conversations in the margins of his speech, he also blames a number of Britain’s largest employers, who have called for more business-friendly government policy.

For the backbenchers who have lobbied hard for tax cuts despite the recent trauma of Truss’ unfunded giveaway, there was a clear message.

“The best tax cut right now is a cut in inflation,” he said.

That means do not expect much in March.

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6:02

Carmakers seek support in face of ‘protectionist’ threat

For the audience in the room, entrepreneurs and investors in the new technologies, life sciences and advanced manufacturing crucial to delivering growth, the message was delivered with a broad brush.

He said enterprise and education were priorities, pointing to the natural advantages of the City of London and the brains trust of the UK’s world-leading universities.

New investment worth up to £100bn would be unlocked when reforms to EU-era regulation governing the reserves held by insurance companies are finally passed “in the coming months”, he said.

The chancellor did not deny that the economy faces challenges, referring to the “productivity puzzle” that has seen output still not recover to pre-pandemic levels.

He said increasing employment was the key, highlighting a shortage of workers that many businesses blame on new Brexit immigration controls.

Mr Hunt preferred to focus on the growth of “economic inactivity” – those of working age who are not in work, by choice or through illness.

Around one-in-five 16-64 year olds currently meet that definition, 6.6 million people once students are removed from the figures.

Mr Hunt promised help to get the long-term sick back to work and then made a striking direct appeal to retirees: “To those who retired early after the pandemic, or haven’t found the right role after furlough, I say – Britain needs you.”

Persuading those who don’t need to work to come back to the daily grind may be a tall order.

Whether you’re an optimist or pessimist, economic reality will have the last word.

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