06 Jun UNDERPERFORMING UK ECONOMY NEEDS A RADICAL OVERHAUL, SAYS MEL STRIDE
SHADOW Chancellor Mel Stride has said the economy needs a radical overhaul to improve growth and acknowledged that the Liz Truss mini-Budget was “not fiscally responsible”.
He told GB News: “For too long, probably for the last couple of decades, since the global financial crisis in 2008 at least, the economy has not performed in a way that has been appropriate for the needs of both the people of our country and the challenges that we face.
“Productivity and growth have been too slow. And if we’re to tackle that, we need to have a deep, long think about everything from our tax system, the level of the tax burden, getting that down. We need to look at the size of the state getting that smaller.
“We need to look at our skills mix as we bring net migration down, how our higher education is working, how universities are working, and whether they’re delivering. We need to get energy costs down because they’re grossly uncompetitive.
“We need to get building, not just houses, but roads and reservoirs and railways, and we need to tackle welfare in a very significant manner.
“Now, if we can do all those things, we can create an economy that is much more vibrant, much more supportive of business and could go out and create the wealth and the jobs.”
He added: “The most important thing is, if we’re going to rewire the economy and have an economy that is thriving and growing, we’ve got to act with fiscal responsibility.
“In other words, the numbers have always got to add up. We can’t just offer sweeping tax cuts, for example, as Reform are without explaining exactly how we’re going to pay for those.
“And one of the things I will be saying this morning is to recognise, as I said at the time, incidentally, that the approach that was taken at the back end of 2022 in that mini-Budget was not fiscally responsible.
“We have to own up to that, and we have to be honest about that, because what this country needs is a party now that is going to have fiscal responsibility hardwired into it.
“The problem was fundamentally that if you go out there with tens of billions of pounds of unfunded tax cuts in what was then a fairly inflationary environment, you start to lose the confidence of the markets, and then you start to lose control of the economy.
“Now we very quickly put that right. Within a matter of weeks, we had settled things down again. But nonetheless, there was a lesson to be learned.
“We have currently two parties, we have the Labour Party that is messing up the economy, taking all sorts of bad economic decisions, blowing their fiscal headroom, being economically irresponsible. We’ve got a Reform party that is coming out with all sorts of commitments that are completely unfunded, that will be economically ruinous and fiscally irresponsible.
“We have to now be that party that will be absolutely ironclad when it comes to having fiscal responsibility right at our heart. Never again will we come out with commitments that we cannot explain how we can fund those we need to maintain the confidence of markets, and that’s exactly what our policies going forward are going to do.”
