Truss wants to ‘spread growth more evenly across UK’ while cutting public spending says new Levelling Up secretary
The UK Government wants to spread growth “more evenly across the United Kingdom” while cutting public spending to pay for tax cuts to the wealthy, the new Levelling Up Secretary has said.
Simon Clarke said that levelling up was “absolutely fundamental to why the PM’s in politics” but said that a new age of austerity was on the way.
“There is a total commitment as we aim to boost growth, that we do so in a way which actually spreads that growth more evenly across the United Kingdom,” he told the Times newspaper.
However, he added that Britain has lived in a “fool’s paradise” for too long and must reduce public spending to fund the government’s £45 billion worth of tax cuts.
In practice, as the devolved nations of the UK receive a population share of the money spent by the UK Government on England, that will also mean a smaller budget for the Welsh and Scottish governments.
Welfare remains reserved to Westminster, and is likely to be the main target of cuts due to commitments to protect the NHS and defence spending.
“My big concern in politics is that western Europe is just living in a fool’s paradise whereby we can be ever less productive relative to our peers, and yet still enjoy a very large welfare state and persist in thinking that the two are somehow compatible over the medium to long term,” Simon Clarke said.
“They’re not. We need to address that precisely because in the end, if we want those strong public services then we are going to have to pay for them. I think it is important that we look at a state which is extremely large, and look at how we can make sure that it is in full alignment with a lower tax economy.”
He suggested that capital spending projects promised under the Boris Johnson government, including hospitals, affordable homes, roads and railways would be cut.
“One of the things which the PM has been really clear about is the need for a real prioritisation of those things that matter the most,” he says.
“So logically, other things either have to be cancelled, or move to the right in terms of when they’re delivered. To govern is to choose.”
Today the Chancellor of the Exchequer has also defended last week’s mini-budget by saying the Government “had no other choice” than to do “something different” to spark the economy.
As the Prime Minister admitted the strategy had caused “disruption”, Kwasi Kwarteng said the public expected public spending would be tightly controlled.
“The British taxpayer expects their government to work as efficiently and effectively as possible, and we will deliver on that expectation,” he wrote in The Daily Telegraph.
“Not all the measures we announced last week will be universally popular. But we had to do something different. We had no other choice.”
The Chancellor also insisted he will produce a “credible plan” to get the public finances back on track with a “commitment to spending discipline”.
As Tories prepared to head to Birmingham for their annual conference, Liz Truss warned the country faced a “difficult winter” ahead as she indicated she had no plans to reverse her tax-cutting agenda.
“I recognise there has been disruption but it was really, really important we were able to get help to families as soon as possible,” the PM said in a pooled interview with broadcasters on Friday.
“This is going to be a difficult winter and I am determined to do all I can to help families and help the economy at this time.”
‘Back on track’
Her comments came at the end of a tumultuous week which saw the pound slump to an all-time low against the dollar and the Bank of England forced to spend billions buying up government debt to prevent a collapse of the pensions industry.
The sell-off of sterling prompted fears that millions of mortgage holders could face crippling rises in their repayments as the Bank moves to ratchet up interest rates to shore up the currency and put a lid on inflation.
The turmoil erupted after markets took fright at Mr Kwarteng’s £45 billion package of unfunded tax cuts – the biggest in 50 years – while committing billions to capping energy bills for the next two years.
With the Tories tanking in the opinion polls – one showed Labour opening up a hitherto unthinkable 33-point lead – some Conservative MPs have been pressing for a change of course.
Despite having been in Downing Street for less than a month, some have questioned whether Ms Truss can now survive to the end of the year as the party has seen its reputation on the economy shredded.
The Prime Minister, however, insisted that Mr Kwarteng was right to cut taxes as part of their plan to drive up the UK’s sluggish rate of economic growth.
“What is important to me is that we get Britain’s economy back on track, that we keep taxes low, that we encourage investment into our country and that we get through these difficult times,” she said.
With some analysts warning of a squeeze on public spending to get debt under control, the Prime Minister again refused to commit to the annual uprating of benefits in line with inflation – something Rishi Sunak had promised to do when he was chancellor.
Pressed in her interview, Ms Truss said only that it was “something the Work and Pensions Secretary (Chloe Smith) is looking at”.
She added: “What is important to me is that we are fair in the decisions we make, but most importantly that we help families and businesses at this very difficult time with their energy prices.”
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