Speech to WMG

[Steve]

Thank you very much for the opportunity to speak to you today about the Government’s economic plans and priorities.

It has been a bit of a shock to the system, naturally, to move from running our Brexit negotiations to running the economy. But it is a huge privilege, to have the opportunity to step into this role at this essential time.

When thinking about where to give this speech, this seemed the perfect place. Because it represents many things, I think. It is where Labour launched its election campaign when it was last in Government in 2010, and so I suppose there is a bit of philosophical symmetry. But more importantly, I think, it represents the best of what Britain’s economy could be at its full potential. 

Unfortunately, I think that we aren’t meeting that potential at the moment. Places like this can be at the cutting edge of Britain’s economic and industrial revival: with the right economic and industrial policy behind it.

Labour was elected on a mandate of economic change. An end to austerity and an economic transformation for the many, not the few.

That will be my guiding star as Chancellor.

Ending austerity does not simply mean an end to public spending cuts. For me, there are three key pillars to our new post-austerity agenda.

First, ending austerity must mean tax and spending policies that provide better public services, distribute the gains from economic growth and prosperity more fairly, and are fair between generations. Right now, austerity fails on all three counts. 

We have rising waiting times and declining school standards.  Many of the cuts have made our country less equal, with child poverty rising at a time when billions and billions are being added to the bank accounts of the wealthy every day. And even though the deficit has fallen, reducing the debt that future generations may have to service, so much of that has been achieved by cuts that directly affect those young people: tripling tuition fees, cutting climate change spending, cutting youth job guarantees. 

What is the point in cutting the debt future generations pay if it is just making those future generations poorer?

We will be fiscally responsible. But when we set out our plans, we will be setting out a plan to balance not just the economic books, but the social books as well.

This task is urgent. Labour was not elected to sit on its hands and preside over the social decline that Cameron and May delivered. We will take action: we will get waiting times down, we will get school standards up, we will get more police officers on the street, we will get poverty falling.

When the Government came to office in 2010 keen to set out their plans to cut the deficit, they held an emergency budget. I am minded to do the same in order to tackle the social emergency we face, and make it clear to the country the steps that we will take to end austerity.

We will therefore deliver a Budget by the end of this year, alongside a full economic and fiscal forecast, where we will take immediate action to mend the social fabric of this country

Second, ending austerity means transformation to a low emission, high wage economy. 

The Deputy Leader of the Labour Party will, in the next few months set out our ambitious plan to achieve net zero emissions by 2040. That is a huge and historic economic opportunity to be a world economic leader. The Conservatives squandered the last seven years when we could have been the green workshop of the world. We will not, and we will prioritise a transition that creates millions of new green, high wage jobs in this country: by supporting a world leading electric vehicle industry, insulating British homes, and delivering renewable energy not just at home but also abroad.

A sustainable higher wage economy means boosting productivity: helping our industry and our people produce more goods the world wants to buy. Delivering a good Brexit deal will be vital there. But so will a modern industrial policy. And key to that will be our plans for a new National Investment Bank, on which I will bring forward legislation later this year. That bank will provide vital finance not just for infrastructure, but for small businesses, for innovative industry, and for regional development across the country.

And we will invest in and boost skills and research: bringing the UK from close to the bottom of the international league table on high skilled jobs and investment in R&D, right up to the top. Harnessing the potential of initiatives like this one and making our economy work for everyone.

The third pillar is an issue on which I feel particularly strongly: economic security. 

For many, we aren’t even meeting the basics as a country. I strongly believe that one of the fundamental failures since the 1970s has been on this issue. We as governments have been far too quick to put up our hands and say we can’t help when your local factory closes. Or when international headwinds hit, we spin the lines instead of delivering the action. Labour in the financial crisis pulled so many of the levers necessary to protect people, only for austerity to undo that piece by piece. 

It is no good to the struggling parents who need to feed their kids that they lost their jobs because of events halfways around the world. It doesn’t matter to them and it shouldn’t matter to us. What should matter is what we do about it. Which is why we’re so opposed to leaving the EU without a deal - which would plunge millions into uncertainty and insecurity. It matters nothing to them that Britain can of course, ultimately grow and thrive in any scenario. It matters if they can put food on the table right now.

So next week I will be introducing a new Economic Security Act, which will increase the minimum wage, restore and improve rights and work, and prevent wages from being undercut by recruitment agencies advertising abroad. It is a first step. And there will be more.

I was elected on a manifesto on a simple and clear message.

For the many, not the few.

The economy right now does not deliver that simple pledge.

My mission as Chancellor is to change that.

To end austerity: providing better public services and fairer taxes, a high wage and low emission economy, and more security for the families and workers that are the backbone of our shared prosperity.

Thank you very much.

Edited October 21, 2022 by Harry West
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