Hunt Delivers "A Lecture, Not a Plan"

Above: File image of Chancellor Jeremy Hunt. Image © Gov.uk.

Chancellor Jeremy Hunt has attempted to lay out an optimistic vision for the UK economy but industry reactions say his speech lacked the detail required to shift the dial on a pessimistic outlook.

In a speech delivered to Bloomberg’s European headquarters in London, he said the government's plan was to halve inflation and grow the economy which is expected to fall into recession in 2023 amidst high inflation and persistently low productivity levels.

Investors and markets were therefore looking to Hunt to set out a more optimistic vision that might boost sentiment towards UK plc.

"The Chancellor gave us a lecture, not a plan, saying we must wait for Spring Budgets and Autumn Statements for policies, spending commitments or detailed strategies," says Andrew Megson, CEO of My Pension Expert. "There's no scope for such a rigid approach."

Particular focus was paid to digital technology, green industries and life sciences, which Hunt identified "as growth sectors that can help realise a more innovative economy".

In fact, he revealed the opening section of his speech had been written by ChatGPT, the AI software that was released late last year.

Hunt called on businesses in the sector to increase their investment in the UK, which he wants to be "the world’s next Silicon Valley."

But industry experts say the speech was lacking in the kind of details required to encourage such an outcome.

"There are clearly gleaming nuggets of growth of potential in innovative industries, from renewables to AI and life sciences. But competition for inward investment is heating up with subsidies being dangled by nations across the world," says Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

New research from the CEBR and Sage - a small business accounting software provider - finds the UK's technology sector is highly reliant on small and medium-sized businesses (SMBs).

Above: UK business turnover is expected to flatline in 2023. Source: Sage, ONS & Cebr analysis.

The research finds UK SMBs are set to be challenged by the recession as "these businesses have historically struggled with access to finance, too much red tape, and cash flow issues".

"Productivity has lagged behind the G7 average and government policy must address this disparity head-on," the Sage report also finds.

Streeter says education and employment will require significant new funding "to really move the dial on the issues holding back productivity."

When it came to providing actionable policy announcements, Hunt was found wanting.

"The detail is sorely lacking, with the architects of this plan clearly unsure how it will be paid for," says Streeter.

Regarding the broader economic outlook, Hunt says his main goal was to bring inflation down and details on the government's economic strategy would therefore be provided at a later date.

"Consumers need to clarity now on how the government will tackle economic issues like rising interest rates and double-digit inflation; financial planning is difficult when uncertainty hangs overhead," says

"I would urge the Chancellor to focus on speeches of substance, not sweeping generalities, to help people navigate the challenges that lie ahead of them," he adds.