Sunak outlines vision for Britain and pledges to halve inflation and grow economy this year

Thu 5 Jan 2023
Posted by: William Barns-Graham
Trade News

Rishi Sunak during his time as Chancellor

Prime minister Rishi Sunak yesterday (4 January) outlined his vision for Britain in his first landmark speech since entering Downing Street in October.

Against a backdrop of industrial action and forecasts that the UK will enter an economic recession this year, Sunak promised to deliver "peace of mind" to the UK public.

Five pledges

His speech, made at Plexal workspace in east London, included five main pledges:

  1. To “halve inflation this year”
  2. To grow the economy, “creating better-paid jobs and opportunity right across the country”
  3. To ensure national debt is falling in order to “secure the future of public services”
  4. To reduce NHS waiting lists so that people get the “care they need more quickly”
  5. Address illegal immigration by passing “new laws to stop small boats” crossing the Channel to the UK

He called the five pledges the “people’s priorities” and spoke about the importance of “good jobs giving people pride in their lives”.

“We can reverse the creeping acceptance of a narrative of decline,” Sunak said, as he called on the country to “reject pessimism and fatalism” and to “refuse limits on our aspirations”.

Backing UK innovation

Speaking only briefly about Brexit, he said that he would ensure that the UK uses its position outside of the bloc to ensure the country’s regulatory system is “pro-innovation”. He also spoke about investment in R&D and the importance of enhancing the UK’s “world leading strengths” in areas such as AI and green technology.

With the government’s new subsidy regime coming into force earlier on the day – which will supposedly allow authorities to “tailor aid to local needs” – he also reiterated the government’s commitment to ‘levelling up’.

Analysis

IOE&IT public affairs adviser Grace Thompson told the IOE&IT Daily Update that Sunak was partially using the speech as an attempt to “bolster the public’s spirits and to emphasise that the economy will recover”.

“As the PM begins his government’s final full year before a general election, every speech, and indeed every day, is an opportunity for him to try to demonstrate credibility and stability,” she said.

“Whether or not he can actually reverse both decline itself and the ‘narrative of decline’, which he spoke against, is a matter of great importance to so many of our members who face the consequences of this decline every day,” she added.

How’s it been received?

The Labour Party has said Sunak’s pledges are “so easy it would be difficult not to achieve them”, a view shared by many political commentators, with the BBC’s political editor asking the prime minster “is that it” during the questions from the media after the speech.

However, the Telegraph leader called the speech a “good start” and the Times praised his vision as realistic following the “boosterism of Boris Johnson or the free-market radicalism of Liz Truss”.

Where we are

The Labour Party’s analysis points out that Sunak’s pledge to halve inflation is “less ambitious than existing official forecasts”, with the OBR forecasting CPI inflation for the last quarter of 2023 to drop to 3.8%, nearly two thirds lower than the 11.1% of the final quarter of 2022.

On economic growth, UK GDP is not going to grow this year but could contract by 0.4%, according to the latest OECD forecasts.