Gratitude for Support and Collaboration
Thank you for your warm welcome. I would like to extend my appreciation to the dedicated staff who have played an integral role in organising this event. As we were entering the venue, I asked Graham what he takes pride in regarding the MTC. He responded by highlighting our ability to transform small ideas into remarkable businesses. This is precisely why we are so proud to support you, and it brings me great pleasure to be here today.
I am particularly delighted to be joined by my esteemed friends and colleagues, Richard Parker, the Mayor of the West Midlands, and Johnny Reynolds, our Business Secretary. Additionally, I would like to acknowledge the exceptional Treasury ministerial team present here: James, Dan, Lucy, and Torsten.
Above all, my heartfelt thanks go to you, the apprentices. I eagerly anticipate spending time with you later today, so thank you for your commitment to your future.
The Role of MTC in Advanced Manufacturing
The MTC stands at the forefront of Advanced Manufacturing, a key pillar of our government’s Industrial Strategy aimed at fostering growth across eight critical sectors. Currently, this centre boasts a workforce of 1,000 individuals and has attracted £35 million in government investment, generating nearly £130 million in revenue. It was conceived and funded in 2009 and officially opened its doors in 2011.
This establishment was created to unlock the potential of the UK industry through practical, cutting-edge manufacturing innovation. Hence, there could be no better setting for me to discuss the government’s unwavering commitment to growth and our optimistic vision for Britain’s future.
The UK is home to almost half of Europe’s most innovative companies, showcasing our leadership in various sectors, including life sciences, defence technology, creative industries, and financial services. Our scientific and research capabilities are globally renowned, with our capital markets standing among the largest and most dynamic worldwide, as evidenced by the recent highs in the UK stock market.
Addressing Global Economic Challenges
In recent weeks, my new role has taken me from my constituency in South Yorkshire to the G20 meeting in North Carolina. I was proud to represent the groundwork laid by Keir Starmer to re-establish Britain as a respected voice among allies and to continue the efforts initiated by Rachel Reeves to restore fiscal discipline in our nation.
At the G20, discussions primarily centred around the challenges faced by the global community, including conflicts and trade tensions that are exacerbating inflation and driving up interest rates. Although these issues are global in nature, their impact is acutely felt here in the UK, influencing everything from the cost of groceries to government debt.
Our borrowing costs have reached historic highs, a consequence of high borrowing and low growth since 2009, which has seen national debt rise from 64% of GDP to nearly 100% today. The aftermath of the pandemic, coupled with unfunded spending, has driven inflation to 11%, significantly impacting the cost of living and business operations.
Resilience and Optimism for the Future
Historically, UK debt costs were in line with the G7 average, but since 2022, we have been paying a ‘trust penalty’ as we strive to rebuild confidence in Britain’s fiscal sustainability. In our democratic system, those of us privileged to serve in government do not choose the timing or circumstances; that is determined by the British people.
During my conversations at the G20, I sought to share a fresh narrative about Britain—one of resilience, pride, and immense potential. We are a nation poised to turn a corner, ready to harness new technologies and ideas. I spoke of trade agreements with our allies and the influx of investment that positions Britain as a prime location for business.
Moreover, I highlighted interest rates, which have been cut six times since the election, and borrowing, which is at its lowest level in six years. While growth remains fragile, we experienced the fastest growth in the G7 during the first half of this year, with productivity finally on the rise after years of stagnation.
Commitment to Fiscal Discipline and Growth
On my first day in the Treasury, I declared that fiscal discipline would be my utmost priority as Chancellor. This principle underpins every promise made by this government. The Prime Minister and I are united in our commitment to uphold fiscal rules in the upcoming Budget, aiming for balanced books with a safety net against uncertainty, controlling borrowing to mitigate inflation, and alleviating long-term pressures on public finances.
This commitment goes beyond mere numbers; it embodies our values. There is nothing progressive about a government spending £1 in every £10 on debt interest. If debt interest were classified as a government department, it would rank as the second largest in Whitehall, surpassing Defence, the Home Office, and Justice combined. Thus, adhering to our values necessitates a candid acknowledgment of the need to control government expenditure.
The Link Between Fiscal Credibility and Economic Growth
Fiscal credibility is intrinsically linked to growth, as was emphasised during the recent discussions at the G20. Sustainable growth provides the pathway out of indebtedness and into prosperity. While Britain’s growth trajectory has been lacklustre, it is imperative that we shift this narrative, a transformation that is both essential and achievable, and central to my role as Chancellor.
When asked about growth, economists may provide a statistic, but the public’s interpretation is far more personal: it’s about young individuals landing new jobs in thriving companies, sole traders securing contracts that allow for family holidays, and businesses winning new export orders that revitalise their communities.
I am dedicated to the mission of transforming Great Britain into Growth Britain once again, marked by increased investment, innovation, and job creation. I acknowledge the rising costs of doing business—energy bills, regulatory burdens, planning constraints, and labour expenses—and I aim to draw a line here.
Long-Term Solutions Through Growth
Whether addressing the cost of business or the cost of living, the long-term solution lies in fostering growth. I envision a nation focused on wealth creation, where government policies enhance confidence, investment, and profitability in British businesses.
Today, I will outline our strategy for achieving these goals—acting swiftly, collaborating with businesses, and demonstrating our patriotism by supporting British enterprises, promoting British goods, and creating jobs for the British workforce.
This dual mission for growth is spearheaded by the Prime Minister and myself as Chancellor, with No10 North and the Treasury working in tandem. We will leverage devolution, enhance public control, and establish a robust, strategic centre of government.
Empowering Local Leaders and Infrastructure Development
In his recent statement to the House of Commons, the Prime Minister diagnosed the issues plaguing our economy, noting that a series of past policy decisions have hollowed out its fundamentals. Centralised political power has weakened connections among the people, businesses, and institutions capable of driving progress beyond Whitehall.
Moreover, the privatisation and outsourcing of economic enablers have led to a lack of accountability, leaving a fragmented network of arms-length bodies and regulators that often lack the predictability and pace vital for a thriving market economy. As a result, communities have suffered, with high streets struggling and public trust eroded.
The solution lies in a fundamental shift—one that empowers local leaders with the resources and authority needed to build infrastructure, stimulate private investment, and implement local industrial strategies. This will ensure accountability and responsiveness to local needs, unlocking regional potential in ways that Whitehall cannot.
A Vision for a Decentralised Future
I am resolute in my belief that the next chapter of Britain’s growth narrative must unfold in diverse locations. This is not mere sentiment; it is grounded in supply-side economics. For instance, a transport bottleneck in South Yorkshire may be overlooked by those in Whitehall, but it has tangible repercussions on economic growth and investment decisions.
To address this, I will introduce a roadmap for fiscal devolution in the upcoming Budget, facilitating the permanent transfer of power and resources from Whitehall to our regions. This includes enhanced business rates retention for local councils and strategic authorities, with a transition from central government grants to a share of local income tax for Mayoral Strategic Authorities starting in 2028.
While London remains our powerhouse, if our city-regions can replicate the successes seen in France or Germany, we could witness a transformative shift in our national growth. Additionally, I will announce a new allocation from the British Business Bank of £150 million for scale-ups in the North, supporting our most innovative and rapidly growing firms.
Fostering Local Growth and Strategic Partnerships
I also unveil the Northern 500 initiative, designed to unite the North’s most ambitious mid-sized businesses into a cohesive growth community led by the Great North partnership of Mayors, with support from the private sector and central government. Across the UK, we will champion local leaders in their quest for local growth.
Our government has already embarked on this endeavour with other nations, establishing Aberdeen as the home of GB Energy, investing in Welsh railways, and supporting small businesses across Northern Ireland through the British Business Bank. Following in the footsteps of Richard Parker in the West Midlands, I am pleased to announce that South Yorkshire, the Liverpool City Region, North-East