UK’s Hunt pledges to boost growth but won’t budge on tax hikes

British finance minister Jeremy Hunt will promise on Friday to tackle the country’s weak productivity with post-Brexit finance reforms to boost growth, but he will also stick to the tax rises that have angered some lawmakers in his Conservative Party.

Hunt, who steadied financial markets after the turmoil of former Prime Minister Liz Truss’ “mini-budget” in September last year, is preparing to announce a plan for growth in a budget statement in March.

He intends to use a speech on Friday to counter talk of Britain’s economic decline and focus on growth industries, including digital technology and the shift to new, high value industries such as renewable power and advanced manufacturing.

His comments come days after the head of the Confederation of British Industry warned that Britain had been “spectacularly overlapped and overtaken” on green investment.

“Confidence in the future starts with honesty about the present, and we should not shy away from the biggest challenge we face which is our poor productivity,” Hunt was due to say in the speech, excerpts of which were released by the ministry.

Hunt said declinist talk did not reflect the fact that Britain’s economy had grown by more than France and Germany since 2010.

More recent comparisons are less favourable: official data show Britain is the only Group of Seven economy that failed to recovered its pre-pandemic size by the third quarter of 2022.

“Our plan for long-term prosperity tackles that challenge head on. It is a plan necessitated, energised and made possible by Brexit which will succeed if it becomes a catalyst for the bold choices we need to take,” Hunt will say.

Hunt would confirm that reforms to the European Union’s Solvency II rules will be implemented in the coming months, allowing insurers to invest more in the economy, the ministry said.

The Telegraph newspaper said Hunt would reject calls from some Conservative lawmakers to bring forward tax cuts as a way to spur growth.

Earlier on Thursday, Hunt told fellow ministers that he had to stick to the fiscal discipline he outlined in November in order to help reduce inflation which is running above 10%, according to Prime Minister Rishi Sunak’s office.