Emma Reynolds

With permission, I will make a statement on the Government’s plan to deliver good growth in every postcode. At the G20 in North Carolina last week, the Chancellor and I met Finance Ministers from leading economies to discuss our shared economic challenges. Global instability, conflict and trade frictions are continuing to drive up inflation and interest rates around the world. While these shocks are international in nature, their impact is also being felt here in the UK—from the cost of the weekly family shop to the cost of Government borrowing. Britain has shown resilience in the face of these pressures and the economy is now turning a corner: our growth was the fastest in the G7 in the first half of this year, Government borrowing fell to its lowest level in six years last year and interest rates have been cut six times since the general election. We are building on our strengths—our world-class universities and our world-leading sectors, such as life sciences, defence, technology, creative industries and financial services—and, because of the choices that this Labour Government have already taken, we are in a stronger position today to capitalise on the opportunities for growth across our economy. In the context of a more uncertain world, we must continue to make responsible choices. Fiscal discipline will underwrite every promise this Government make. Both the Prime Minister and the Chancellor have made clear their commitment to meeting the fiscal rules, with a buffer against uncertainty. We will address the long-term pressures on our public finances to put debt on a sustainable downward path. As the Chancellor said earlier today, there is nothing progressive about spending £1 in every £10 on debt interest. In his statement to this House last week, the Prime Minister laid out a clear diagnosis of what has gone wrong in our economy: political power was centralised, the economic fundamentals were privatised or outsourced, and our country was de-industrialised. The solution is a fundamental shift in the way our country works. No. 10 North and the Treasury are working together to build a stronger, more strategic centre of government and a more active state. Together, we will support the ambitions of local leaders and exert public influence and direction over the essentials, including transport and housing. We will devolve power and resources to local leaders. London is of course an economic powerhouse, but if our city regions could emulate the success of second cities in France and Germany, growth in our country could be transformed. The Chancellor has instructed public investment institutions to focus on regional growth. To build on our high growth areas, the Oxford-Cambridge corridor and the northern growth corridor, he has today announced a new £150 million northern scale-up fund, delivered by the British Business Bank, to back the most innovative and fast-growing firms from Liverpool to Newcastle. The new Northern 500 will also bring together 500 of the north’s most ambitious mid-sized businesses into a single growth community, focused on scaling, investment and productivity. The National Wealth Fund will establish new strategic partnerships with South Yorkshire, the Liverpool city region, the north-east and Cardiff, giving those areas support to build their investment pipelines. At the Budget next month, the Government will go further, with a road map for fiscal devolution—a permanent transfer of power and resources from Whitehall to our regions. This plan will drive economic growth and productivity in three key areas: supporting investment, boosting innovation and getting more people into good jobs. First, I will turn to investment. Business investment has increased by nearly 5% since the general election, but in a highly competitive world we must do more to reduce the barriers that firms face. The Government will tackle the thicket of consultation, litigation and administration that is holding up private investment, including by extending our reforms of judicial review from energy to all major infrastructure. We will bring an end to the consultation culture across Government, supported by new guidance from the Attorney General on legal risk to give Ministers confidence to make decisions. As the Chancellor has set out, we will make further changes to the Treasury’s Green Book, reducing the discount rate from 3.5% to 3%, to ensure that the Treasury rulebook does not go against key regional infrastructure projects and that places across the country get a fairer hearing in spending decisions. Work is already under way to progress place-based business cases in Plymouth, Birmingham, Liverpool and Port Talbot, and at the Budget we will publish guidance to allow more areas to do the same. The second driver of growth is innovation. The UK has a fantastic record on innovation. We are world leaders in frontier technologies, quantum computing, nuclear fusion, space technology and AI. But too often, ideas born here have to go elsewhere to find the capital they need to scale. Today we are setting out a new ambition to double the number of unicorns in this country. The Government will identify and back these high-potential firms, providing them with the necessary capital to scale. New cross-economy sandboxing powers will also enable firms to test frontier technologies safely. Building on the important work already taking place in defence and sovereign AI, the Chancellor will work with Government Departments to earmark new, dedicated funds to back British innovation. The third vital driver of growth is jobs. Our objective is to get more people into good, highly skilled jobs, and to make the most of the untapped talent that exists across the country. That is why, two weeks into office, the Prime Minister set out a bold new plan to transform technical education, and why, this autumn, Alan Milburn will set out his full recommendations to Government on how to address the blight of youth unemployment. This is our moral duty—not only our fiscal duty—because it cannot be right that so many young people are stuck on benefits. The plan for growth is underpinned by fiscal discipline. It will hand power to local leaders and unlock the potential of our regions. It will build a strong, strategic centre of Government and enable greater public direction and influence over the essentials. It will back British business, goods and exports, creating wealth and prosperity in all parts of the country. It is a plan to build hope and optimism across our economy, and to drive good growth in every postcode. I commend this statement to the House.