Prime Minister’s Speech – Economy – Monday 20 November

I’m here today to talk about the central purpose of our economic policy:

To give you the opportunity to build a wealthier, more secure life for you and your family.

We should not be apologetic about that.

About the nobility of aspiration, the rewards of hard work, the dreams we have for ourselves and our children:

Owning our own home.

Starting a business.

A healthy, happy retirement.

And leaving our children a more comfortable life.

But I know that right now, that dream feels out of reach for too many.

So the most urgent choice our country faces, is how we change that.

My opponents offer only simple, fairy-tale answers.

The idea that someone in Whitehall can plan and direct the whole economy…

…assisted by tens of billions of subsidies…

…with no plan to pay for it.

Or the idea we can simply cut taxes without a plan to pay for that either.

Our approach is different.

One that gets inflation down and keeps it down.

One that believes the private sector grows the economy…

…and where government has a role, it must be limited.

One that believes in cutting taxes – but doing so carefully and sustainably.

And one that is ambitious about the unprecedented opportunities for this country…

…from the new wave of technology. Our approach starts with controlling inflation.

High inflation eats away at your pay packet.

It makes mortgages more expensive and stops you getting on the housing ladder.

It makes pensions and savings worth less.

In other words, inflation is a tax.

And it erodes that dream of a wealthier, more secure life that we want for everyone.

And that’s why we’ve provided unprecedented support for people’s energy bills and the cost of living.

And it’s why at the start of this year, I committed to halve inflation.

Back then, inflation was around 11%.

And now, in October, the Office for National Statistics confirmed it fell to 4.6%.

Now I’m not saying the job is done.

But it does mean we have met our commitment to halve inflation.

Prices are no longer rising as quickly.

Energy bills have fallen significantly.

And for many, wages are now rising faster than prices.

And it shows something else:

That when we make a major economic commitment, we will deliver it.

It would’ve been far easier to give into the strikes with inflationary pay rises…

…or any number of calls for higher spending and borrowing.

But we held firm.

And with inflation halved, we can now look forward…

…towards the future economy that we want to build.

As we do so, the country faces a critical choice about how we grow the economy.

Do we continue with the big government, high spending, high borrowing, and high taxes, that were necessary through the pandemic?

Or, as we believe, should we change our approach, and grow the economy through the dynamism of the private sector?

Nothing shows the difference between those two visions more than the people asking you to believe in them.

I’ve spent most of my career working and investing in businesses, large and small.

The Chancellor spent his life before politics starting and running businesses.

That’s where we learnt about the economy.

Our political opponents?

They’ve got no experience whatsoever of running a business.

No wonder they think the answer to every question is for the government to spend more and do more.

My approach is rooted in what I learned growing up, working in Mum’s pharmacy.

She worked so hard – we all worked so hard – not just because that was where our living came from.

But because it was ours; we owned it; we all had a stake in its success.

If we worked hard and took pride in our work and provided a good service, then business would improve.

If we didn’t, it wouldn’t.

And that’s why the Opposition are so wrong to believe the economy is about government.

It’s not.

It’s about people, free to pursue their own ideas, in their own interests, in their own way.

To support themselves and their families through the dignity of their own work.

I’m not saying government has no role.

My record is not that of a market fundamentalist.

When a crisis hits, governments must intervene – just as we I did with furlough.

The state must step in where the private sector won’t.

Not least to provide high quality public services like the NHS…

Or to improve public health with our plan to create a smoke-free generation…

Or to invest in our future growth, with infrastructure, skills, and the incredible opportunities of science and technology.

And in a world where Putin is willing to weaponize energy…

…and we face the strategic challenge of a more assertive China…

…we must be smarter about protecting our economic security.

But our opponents are profoundly wrong to argue…

…that the shocks we’ve seen in the last few years, or the need to transition to Net Zero…

…mean we should borrow £28 billion a year, and permanently have bigger government.

We should be as clear-eyed about government failure as we are about market failure.

So the bar to intervene in people’s lives should be high.

Because history tells us that if it’s not, the inevitable conclusion is…

…higher spending, higher borrowing, higher mortgage rates, and higher taxes.

Greater regulation and intervention, stifling people’s energy and initiative.

Less trade, meaning less choice and higher prices.

And economic power concentrated in the hands of a small government elite…

…allowing more influence for vested interests and the trade unions.

This is a recipe for stagnation, not growth.

And it would take our country backwards, not forwards.

So we choose a different path to deliver growth.

Where we back people and businesses.

Where the state is there for you during the bad times but gets out of the way during the good.

And where the path to prosperity lies not in ever more government intervention…

…but in creating the conditions for businesses to thrive.

And so to grow the economy, we will take five long-term decisions.

Reducing debt.

Cutting tax and rewarding hard work.

Building domestic, sustainable energy.

Backing British business.

And delivering world-class education.

The first long-term decision is to reduce our debt…

…to keep inflation falling and get mortgage rates down to affordable levels.

Without financial security, we can’t do anything to support families and workers when they need it most.

When Covid struck, we could only act because our public finances were in good shape…

…thanks to the difficult but responsible decisions we’ve taken over the last decade.

I’ll always be proud of being the Chancellor who protected nine million jobs…

…in a moment of danger, fear, and uncertainty, people turned to this government…

…and did not find us wanting.

I’m proud of the support we provided to the NHS, with record levels of funding.

I’m proud too, of helping households pay their energy bills when Putin cut off the gas.

But the only way to give people the peace of mind that government will be there in future crises…

…is to pay down our debts now.

And if we don’t, we’re just leaving our children to pay the bill.

Last September was a stark reminder why this matters so much.

The country was rocked by a financial crisis caused, in part, because investors didn’t believe the UK had a plan to control our debt.

And we should remember what happened last time the Labour Party were in power.

Their attitude to the public finances was so cavalier they actually left behind a note saying: “there’s no money left”.

They made a joke out of it.

I will never do that.

That’s why the Chancellor and I have taken difficult decisions to control our debt.

That wasn’t the easy thing to do – but it was the right thing to do for our country.

And that’s what leadership means.

Contrast that with our political opponents.

They talk the talk.

But frankly the rhetoric is the easy part.

It takes political courage to take the difficult but right decisions for the long-term.

And the truth is Keir Starmer and Rachel Reeves have tried to block or opportunistically oppose…

…almost every major decision we took to get our debt falling.

And if they get the chance, they’ll make the problem even worse…

…continuing the big government, big spending approach of the pandemic…

…and promising to borrow a further £28 billion a year.

This makes the same economic mistake as last year’s mini-budget.

Blowing tens of billions of pounds on unfunded spending is just as dangerous…

…as blowing tens of billions of pounds on unfunded tax cuts.

It is taking the easy way out.

And the result is the same:

Higher inflation, financial insecurity, and more debt for our children and grandchildren.

You know I won’t allow that to happen.

I was willing to resign from the previous government over this.

I was even willing to lose a leadership election over this.

So you’d better believe me when I say this difference is real.

I will do what is necessary to get our debt down and provide financial security. The second decision we’re taking is to cut tax and reward hard work.

Now I want to cut taxes.

I believe in cutting taxes.

What clearer expression could there be of my governing philosophy than the belief…

…that people, and not governments, make the best decisions about their own money?

But doing that responsibly is hard.

We must avoid doing anything that puts at risk our progress in controlling inflation.

And no matter how much we might want them to, history shows that tax cuts don’t automatically pay for themselves.

And I can’t click my fingers and suddenly wish away all the reasons that taxes had to increase in the first place.

Partly, because of Covid and Putin’s war in Ukraine.

And partly because we want to support people to live in dignity in retirement…

…with a decent pension and good healthcare – which will cost more as the population ages.

But my argument has never been that we shouldn’t cut taxes.

It’s been that we could only cut taxes once we’ve controlled inflation and debt. 

First cut inflation, then cut taxes.

And that’s why I made the promise to halve inflation.

And the official statistics show, that promise has now been met.

So, now that inflation is halved…

And our growth is stronger, meaning revenues are higher…

…we can begin the next phase, and turn our attention to cutting tax.

We will do this in a serious, responsible way…

…based on fiscal rules to deliver sound money…

…and alongside the independent forecasts of the Office for Budget Responsibility.

And we can’t do everything all at once.

It will take discipline and we need to prioritise.

But over time, we can and we will cut taxes.

Rewarding hard work also means reforming our welfare system.

We believe in the inherent dignity of a good job.

And we believe that work – not welfare – is the best route out of poverty.

Yet right now, around two million people of working age are not working at all.

That is a national scandal and an enormous waste of human potential.

So, we must do more to support those who can work, to do so.

And we will clamp down on welfare fraudsters.

Because the system must be fair for the taxpayers who fund it.

And by doing all of this…

By getting people off welfare and into work…

…we can better support those genuinely in need of a safety net.

So, work for those who can; a generous safety net for those who can’t; and tougher penalties for fraudsters.

That is what a compassionate, Conservative welfare system looks like.

Our third long-term decision is to build domestic, sustainable energy.

Energy security is national security.

It underpins everything in our economy so there can be no plan for growth without it.

And the transition to net zero will create whole new sectors…

…and hundreds of thousands of good, well-paid jobs right across the country.

Yet there is almost no better example of how British politics has failed in recent decades…

…than our inability to develop a serious strategy for energy.

We’re now correcting those mistakes, with new nuclear power plants.

Record investment in renewables.

And upgrades to our electricity grid infrastructure.

But there is no path to energy security…

…and indeed no credible path to net zero…

…without secure supplies of oil and gas.

Never again can we allow our energy security to be compromised.

I believe British energy will deliver British energy security.

But my political opponents would ban new oil and gas licenses in the North Sea…

…leaving us more reliant on insecure, foreign supplies…

… sacrificing our energy security in favour of relying on despots like Putin.

Virtue signalling, instead of doing what is hard-headed and right for the national interest.

And you can see that same attitude in their approach to Net Zero.

Now I deeply believe that when you ask most people about climate change, they want to do the right thing.

And I’m proud that since 1990, Britain has reduced our emissions faster than any other major economy.

But it can’t be right to impose such significant costs on working people…

…especially those already struggling to make ends meet.

And to interfere so much in people’s lives without a properly informed national debate.

Yet that is precisely what my political opponents would do…

…forcing families to pay £5-, £10-, £15,000 in home upgrades.

And that’s the choice.

Instead of following the path of ideological zeal, reaching Net Zero no matter what the cost. 

Or to build new supplies of domestic, sustainable energy…

…to grow the economy and cut the cost of Net Zero for working people.

The fourth decision we’re taking is to back British businesses to invest, innovate, and trade.

Now that might sound obvious or uncontroversial.

But it points to a fundamental choice.

My opponents’ every instinct is a form of industrial strategy that’s about picking winners…

…borrowing to provide expensive subsidies, regulating more, and intervening even more. 

And the result would be the same as it always is.

Higher borrowing, higher taxes, higher inflation.

And vested interests, trade unions gaining even more influence.

Just look at what the Labour Party say they’ll do.

They’ll repeal the legislation which gives people emergency healthcare even during the strikes.

They’ll allow unions to bring the entire country to a standstill with the support of just a third of their members.

And they’re proposing sweeping new regulations making it harder for businesses to hire new workers.

Now our approach is different.

We want to support businesses to invest, innovate and grow through lower taxes and simpler regulation…

…and where we provide support, it should be targeted and strategic. 

So yes, we’re investing in roads, railways, broadband and mobile networks, right across the country.

Yes, we’re delivering one of the biggest ever transport upgrades for the north and midlands, in Network North.

And yes, we’re delivering the right homes in the right places to support the labour market.

But growth is all about getting the private sector to invest, too.

That’s why the Chancellor is cutting taxes directly on investment.

It’s why we’re cutting taxes to encourage innovation…

…because new ideas and ways of doing things are the most important ways to raise our productivity.

And it’s why we’re seizing the freedom and flexibility of Brexit.

We’ve already cut Brussels red tape to save small businesses a billion pounds a year.

We’re creating more agile regulation to support innovation and competition…

…particularly in growth sectors like financial services, life sciences, and agri-tech.

And we’re building new trade deals with the fastest growing regions in the world, like CPTPP.

It makes no sense to deny ourselves those opportunities by aligning more closely with EU rules that we would have no say over, as the Opposition would.

So this is our message to business:

The Chancellor and I spent most of our careers in business.

We understand, we care, we get it, and we’re acting to make this the best country in the world to do business.

Now, our final long-term decision is about delivering world-class education…

…so young people have the skills they need to get good jobs.

Education is about opportunity.

About giving people the knowledge and skills to get on in life and fulfil their aspirations.

And about preparing the country for the profound transformation technologies like AI will bring.

I’m incredibly proud of our record since 2010.

Higher standards; more choice for parents; more powers for teachers.

And the result?

State schools in some of the most deprived parts of our country are now producing some of the best results.

And we are doing more.

Our new qualification, the Advanced British Standard will:

For the first time, put technical education on an equal footing with academic courses.

Dramatically increase time spent in the classroom.

Teach Maths and English to every child through to 18, with extra help for those struggling most.

And give students the chance to study a much broader range of subjects.

We know that brilliant teachers make for a brilliant education, so we’re going to back them.

We’ve doubled the grants for new teachers in key subjects to £30,000 over five years…

…and for the first time extended those grants to colleges as well as schools.

And again, there’s an important choice for the country here.

The Opposition opposed our reforms to make our kids the best readers in the western world.

They still cling to the false dream that young people can only get on in life if they go to university.

And we know that if they get into power, they plan to cut apprenticeship numbers by half.

Compare that with our plans for more teachers, higher standards, and more apprenticeships.

It tells you everything about the choice on education in this country.

To conclude, the first time many of you saw me was during Covid, when I stood up at a Press Conference to announce the furlough scheme.

From that moment until today, whether you like me or not…

…I hope you know that when it comes to the economy…

…when it comes to your job, your family, your incomes…

…I’ll always take the right decisions for our country.

I promised you we would halve inflation.

We took the difficult decisions and have delivered on that promise.

Now you can trust me when I say we can start to responsibly cut taxes.

And we will now move to the next phase of our plan, to grow our economy by…

Reducing debt;

Cutting tax and rewarding hard work;

Building domestic, sustainable energy;

Backing British business;

And delivering world-class education.

You can trust me to take the right long-term decisions and that’s how we’ll build a brighter future for our children.

Thank you.