GovWire

Im 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.

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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 thats why weve provided unprecedented support for peoples energy bills and the cost of living.

And its 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 Im 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 wouldve 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.

Ive spent most of my career working and investing in businesses, large and small.

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

Thats where we learnt about the economy.

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My approach is rooted in what I learned growing up, working in Mums 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 didnt, it wouldnt.

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The economy is 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.

Im 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 wont.

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 weaponise 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 weve 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 peoples lives should be high.

Because history tells us that if its not, the inevitable conclusion is

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

Greater regulation and intervention, stifling peoples 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 cant 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 weve taken over the last decade.

Ill 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.

Im proud of the support we provided to the NHS, with record levels of funding.

Im 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 dont, were 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 didnt believe the UK had a plan to control our debt.

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Thats why the Chancellor and I have taken difficult decisions to control our debt.

That wasnt the easy thing to do but it was the right thing to do for our country.

And thats what leadership means.

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

I will do what is necessary to get our debt down and provide financial security. The second decision were 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 dont automatically pay for themselves.

And I cant click my fingers and suddenly wish away all the reasons that taxes had to increase in the first place.

Partly, because of Covid and Putins 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 shouldnt cut taxes.

Its been that we could only cut taxes once weve controlled inflation and debt.

First cut inflation, then cut taxes.

And thats why I made the promise to halve inflation.

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

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