Ed Davey’s speech at the British Chamber of Commerce: failure on growth is Govt’s “original sin”

Liberal Democrat Leader Ed Davey has delivered a keynote speech on the economy today, arguing that failing to grow the economy is the original sin of the Government, underpinning the cost-of-living crisis, defence spending chaos and rising welfare bill. 

In his keynote address to the British Chambers of Commerce Global Annual Conference, Davey criticised Keir Starmer's government and the previous Conservative government for failing to grow the economy and underpinning the cost-of-living crisis, the chaos over defence spending, and the rising welfare bill.

Addressing the conference, Davey set out his party's plan to get the economy growing through a new Growth and Defence Partnership with Europe, including a customs union and membership of the single market. He will argue that without growth, the government will never escape the trap of high borrowing costs, high debt interest payments, and no room for manoeuver.

ENDS

*** CHECK AGAINST DELIVERY ***

Good afternoon.

Thank you Sophy for that introduction, and thank you to the British Chambers of Commerce for inviting me to speak to you today.

It feels especially appropriate and important to be here, discussing how we grow our economy after the events of this week.

Because when you strip everything else away, it is its failure on growth that drives so much of people's anger and frustration towards the Labour government.

Just as it was their failure on growth that drove so much anger and frustration towards the Conservatives before them.

Whether it's the cost-of-living crisis causing so much pain to families across the country

Or the inability to find money for defence at a time when national security is so critical

The rising welfare bill

Or the scandal of one million young people not in work, education or training

The crisis underpinning them all is anaemic economic growth.

The original sin of this government, and the last government, is their failure on growth.

If the next Prime Minister is going to solve those other problems, they must start by firing up economic growth and fast.

And it would be a terrible mistake for the new Prime Minister to think that the problem with Keir Starmer's government is that it wasn't left-wing enough.

Don't lurch to the left, Andy. That's a mistake the country cannot afford.

And let's remember why growth matters. It is not an end in itself.

But without growth far faster growth the broken social contract can never be rebuilt.

And without growth, the government will never escape the trap of high borrowing costs, high debt interest payments, with no room for manoeuvre.

The only way to bring down those high borrowing costs to reassure investors and calm the gilt markets is to convince them that Britain has a real plan.

A plan to grow our economy and get the public finances under control.

A credible growth plan that our country has lacked now for a decade.

Where there's an incentive to work and to take on young people.

Where business and entrepreneurs are incentivised to invest and innovate.

Where the costs of doing business in the UK from energy to transport are competitive.

And where the UK benefits from new economic alliances in an insecure world.

So today, I want to set out the five big economic changes that I believe can get our great country back on track.

And it starts you won't be surprised to hear with trade.

The importance of trade is something we Liberals have always understood.

Free trade brings growth and lowers the cost of living.

That is why we opposed the Conservatives' Brexit deal the biggest and most destructive act of protectionism in our lifetime.

That deal championed, don't forget, by Nigel Farage is estimated to have cost us between 6% and 8% of our GDP.

Think about that.

Think about how many more jobs, how many more businesses, how much more money there would have been in people's pockets if they hadn't hit our economy with Brexit.

They promised Global Britain, but they have left us all poorer, weaker and more insecure.

And I couldn't help noticing that we didn't hear an apology from Mel Stride for that this morning.

I understand you've got Robert Jenrick coming later today I wonder if he'll have the decency to apologise to you? I doubt it.

But what's worse than their failure to apologise or take any responsibility whatsoever is what they say now.

That when it comes to Europe nothing can change.

They say we just have to put up with it.

With all the Brexit red tape. The delays. The costs and bureaucracy.

They say we're stuck with it.

And I'm afraid Labour haven't been much better.

Hemmed in by the red lines Keir Starmer set more than five years ago.

Red lines that say no single market. No customs union.

Red lines that stop us getting rid of the Conservatives' red tape.

Red lines that are holding back our economy. Stopping growth.

It doesn't have to be like this. There is a better way.

Last week, I set out our party's plan for a new Growth and Defence Partnership with the EU.

A bold new deal that will make Britain richer, safer, and stronger.

With a new Customs Union, and also crucially taking Britain back into the Single Market.

Tearing down the barriers to trade. Ending the mountains of paperwork. Cutting costs for businesses.

Giving British businesses the certainty they need to invest, to hire, and to grow.

And giving Britain's public finances a growth dividend

A new growth fund worth tens of billions of pounds. To rebuild the public finances.

To cut the cost of living, cut the cost of business, fix the NHS, and strengthen our Armed Forces.

Just imagine the good that could do.

And our commitment to trade goes beyond Europe too.

We are arguing for a new economic coalition of the willing, for more free trade with Commonwealth allies, and Asian allies too.

Given the EU due to its size has concluded far more ambitious and better trade deals than the UK has alone, this is all possible.

The anti-free trade politics of Donald Trump have to be taken on.

We can't let the tariff man's bullying approach to trade and geopolitics succeed. We know where that ends.

So our party will champion Britain, and defend free trade so hard-won by Liberals in the past.

That's number one. Trade.

Number two is backing Britain's small and growing businesses.

The start-ups and scale-ups. The entrepreneurs and the self-employed.

The people here in this hall!

You are the engines of our economy. The beating heart of local communities. The people who actually create growth and jobs.

But you've been so badly let down in recent years.

Just remember how the Conservative Government shamefully excluded over a million self-employed people from financial support during Covid.

Leaving only the Liberal Democrats to stand up for them in Parliament.

Because we prioritise growth, we have long championed the self-employed and the small business owners.

That's why we're arguing to abolish the unfair system of business rates and replace it with a better Commercial Landowner Levy to increase the incentive to invest and grow.

It's why we opposed Labour's misguided job tax and its unfair tax raid on family farms and other family businesses.

Because we need to stop holding back small firms that want to grow, and free them encourage them to do so.

That's number two. Backing our small and growing businesses.

And number three? It's about people.

Because you can't get the economy growing again without the right people, with the right skills, in the ight jobs.

From construction to care, from hospitality to health, the British economy is being held back by a lack of staff and a lack of skills.

So we need to tackle the health and care crisis, that keeps hundreds of thousands of people off work as they wait for treatment.

We need to offer more training for young people and adults alike.

The right kind of training that teaches the skills employers actually need.

And we need an approach to welfare and work that doesn't trap people on benefits but properly helps and incentivises them into work.

Again, it comes back to our Liberal values. Seeing people as individuals, and treating them fairly.

So number three is people. And number four is energy.

Sky-high energy costs are hurting businesses and holding back our economy.

We have to get those costs down urgently.

But the answer is not, as some pretend, cutting ourselves off from clean, renewable power and relying ever-more on oil and gas instead.

Putin's war on Ukraine and Trump's war with Iran have shown the terrible folly of that.

How damaging it is that we are so exposed to volatile oil and gas prices.

So we do need to invest in renewables.

We do need to make homes and offices more energy efficient.

And we need to make sure the benefits of cheap renewables feed through into the bills you all pay.

By finally breaking the link between electricity and gas prices using the Contracts for Difference we introduced in government.

Cutting energy costs. That's four.

And last but not least number five. Innovation.

Britain has always been a land of innovation.

From the steam train to the internet, Britain has always led the world with creativity and ingenuity.

And we are still doing so today thanks to many of you in this hall.

But right now, too many brilliant British businesses are being held back by a government that talks about technology but does too little to help companies actually adopt it.

So we will focus on that. With real, practical incentives to help small and growing businesses get the tools they need to compete.

Number five.

Investing in innovation. Helping good ideas and new tools to spread quickly.

The best way to boost productivity across our economy.

So friends, there you have it.

Our five-point plan for growth.

Boost trade.

Back small and growing businesses.

Help people work.

Cut energy costs.

And invest in innovation.

A real plan for growth rooted in British, liberal values.

Changing our economy not by burning things down like the populists on left and right.

But by building something better.

By freeing our great country and the great businesses that power it from the shackles that are holding us back.

Unleashing Britain at its best.