Today’s the day we finally get to hear the Chancellor’s plans for growth
GDP growth in November was 0.2 per cent. It slipped to 0.1 per cent in December and we now know that by the end of January it had withered to zero. The British economy recorded no growth in the first month of this year.
It was only a monthly reading and it may be revised up (or down) but you don’t need to be an academic to detect a worrying trend in the growth rate.
We’re fortunate, therefore, that someone is riding to the rescue armed with big ideas and bold thinking. That’s right, Rachel Reeves will today deliver the annual Mais Lecture at the Bayes Business School in the heart of the City.
The Chancellor teased us with her thinking when setting out her Spring Statement (a damp squib rendered even more pointless by subsequent events) where she promised that her lecture will set out “three major choices that will determine the course of our economy into the future.”
Today she will set out a plan “to build for growth, to champion innovation” through investment in AI and quantum computing and to forge “a deeper relationship with the EU.” These endeavours, which speak to political choices as much as economic ones, could be filed under ‘necessary but not sufficient.’
The growth emergency needs urgent action
The last time Reeves delivered the Mais lecture, in 2024, she was merely the shadow chancellor and she warned that “unless you get growth…you’re always going to have to make almost impossible trade offs.” Speaking to the BBC ahead of that event, she said “you can’t just tax and wait [for] better public services.” She went on to raise tax by about £40bn in her first budget and another £20bn in her second, all without delivering any growth worth speaking of.
Alongside big announcements on the promise of future tech and the supposed benefits of “an active and strategic state”, the Chancellor would do well to consider a new report by the BusinessLDN group, whose new Growth Commission is proposing a full review of tax competitiveness, the abolition of stamp duty on share transactions, phasing out the bank surcharge and bank levy and reviewing regulations that hold back housebuilding.
These are all eminently sensible, doable, transformative pro-growth measures that would inject some much-needed dynamism into economy while at the time sending a very clear signal that Britain recognises the urgency of the situation and is prepared to be bold.
Let’s see if the Chancellor manages to convey a similar message today.