Brexit will shake Britons out of their comfortable torpor, turn them into risktakers and put the UK at the forefront of the digital revolution – that was Jeremy Hunt’s message in his much-trailed speech on growing the UK economy.
The chancellor came to Bloomberg’s HQ in the City of London on Friday seeking to raise the country’s spirits, hail the split with Brussels and dispel the “declinism” he says saps Britain’s energy.
He came armed with the prime minister’s five pledges and some of his own – “the four Es” – to show he has a plan to make Britain’s post-Brexit economy boom. But those four steps – enterprise, education, employment and everywhere – are broad and frustratingly lack any real substance.
Let’s start with the first E, and Hunt’s hopes for an enterprising digital economy. Most tech experts could tell him that the UK, for all its prowess in financial services and gaming, needs a bigger, faster broadband network than the current one that leaves many businesses throttled by slow speeds. In addition, a green economy that depends on renewable energy will require a bigger and more resilient electricity backbone.
The chancellor has left both investments to private companies – BT Openreach and National Grid, respectively – which means the UK’s infrastructure will modernise at the pace chosen by these firms unless ministers intervene with their own plan. No such move was mentioned.
Enterprise also needs a vibrant stock market that allows entrepreneurs to raise capital without relying solely on bank borrowing. But the London market has proved to be a graveyard for new entrants and appears to hold little attraction to foreign firms since the Brexit vote in 2016. Hunt mentioned how entrepreneurs can tap venture capital funds to grow, but these provide only a limited pool of funds.
The schools budget received a £2.3bn shot in the arm from in the autumn budget, which Hunt could argue justifies his claim the government values education for all. Most headteachers will confirm that this saved them from crippling debts, but fell short of the cash needed to enhance pupil teacher ratios or buy new equipment.
Hunt was honest about the failure to educate and train the half of pupils who do not go on to university. Yet it was unclear how real-terms cuts to teachers’ pay would help with this. And when a teaching assistant in Cornwall, for example, earns £10.77 an hour, how the high staff turnover that blights many schools will end.
Employment is a key issue amid soaring job vacancies. A report by the work and pensions minister Mel Stride is expected to provide an answer to the question of why so many over-50s have quit the workforce, exacerbating labour shortages.
With the apprenticeship levy considered a bureaucratic disaster by most business groups and the government’s own jobs centre network in disarray, it is not easy to see how a practical plan can be put in place. Will Hunt put serious cash behind retraining programmes for these skilled ex-workers? The chancellor didn’t say.
Hunt’s mention of the fourth E – everywhere – refers to levelling up and how all parts of the UK should benefit from “making Britain one of the most prosperous places in Europe”.
His stance is difficult to reconcile with the latest batch of levelling up funds, which in cash terms favoured London and the south-east. Later in his speech Hunt described Brexit as an “enabler” without mentioning that the manufacturing sectors in north-west and north-east England have suffered badly from lost EU orders.
The Institute of Directors damned the four Es, saying a fifth – empty – more accurately described the content of the chancellor’s speech. The British Chambers of Commerce said there were more important words beginning with the letter: “without addressing the issues of energy and exports, our economic growth will continue to be stunted.”
These organisations are considered natural Tory supporters. Without them on board, Hunt looks all at sea with only a batch of vague mission statements to guide him.
