In an interview with the Sunday Times, Mr Hunt warned that the cost of Liz Truss’ package of energy bills was equivalent to “an entire second NHS” and hinted that the average energy bill could rise by £600 as it cuts universal support for bill payers. The cut in support is likely to come alongside more targeted measures for pensioners and other vulnerable groups, but the paper said average bills could rise by between £2,800 and £3,100 from April. The comparison with the Tory revolt over the ‘pastry tax’ may worry Mr Sunak, after his predecessor Mr Osborne was forced to renew VAT on hot takeaway food after opposition from Tory MPs, some of whom represented the constituencies of Cornwall.
We have to make tough decisions, cut waste and make government more efficient
When Vladimir Putin launched his brutal and illegal war against the brave people of Ukraine, Europe stood firmly against him. But with so many European countries dependent on Russian gas, it has weaponized it and caused more misery by restricting supply and driving up prices, writes John Glen, Chief Secretary to the Treasury.
The numbers are stark. We were spending £40 billion on our energy and now expect to spend £190 billion – more than the entire NHS budget for this year. Rising energy prices are pushing up inflation, plaguing economies across Europe.
Our country can be proud of the leading role we played in supporting the Ukrainian people. Helping to reverse the course of the Russian advance, we provided thousands of anti-tank weapons, armored vehicles and non-lethal military equipment, and granted nearly 200,000 visas to Ukrainians thanks to compassionate members of the public who generously opened their homes to those fleeing war.
But I can see the damage Putin’s price hikes are doing at home, and I really appreciate how much of a struggle it is for families, retirees and businesses across the country. Inflation makes people poorer and eats into government budgets. That is why tackling it is this government’s number one priority right now, working closely with the independent Bank of England.
We have to make sure we don’t add fuel to the fire, which means we can’t spend our way out of this financial mess. And that is why, ahead of the Autumn Statement, I am working with the Chancellor and the Prime Minister on a package that plays our part in tackling inflation and does not make the Bank’s work more difficult.
To continue to provide the things people care about in the face of inflationary pressures, without making the problem worse through extra spending across the board, we need to make tough decisions and make government more efficient. This means eliminating waste.
It is outrageous that public money – your money – is being absorbed into the system when it could be going to areas that really need it.
The sale of unused buildings, particularly expensive properties in central London, must be accelerated. Their sale could save around £500m a year, before heating and running costs are taken into account, and ultimately help create a Civil Service that truly reflects the communities it represents by moving 22,000 roles out of London and into other parts of the country by 2030.
Similarly, we can recover huge sums of money for the public purse with turbo-charging plans to digitize public services. This will cut administrative costs and deliver savings of £1 billion a year by 2025 – while improving the way government works.
And there are other ways the government can work smarter to save cash, too. We need to take advantage of innovation, such as the virtual wards tested during the pandemic to monitor patients remotely, which would allow us to provide better services at less cost.
Finally, we must crack down on fraudsters and those who seek to abuse the system. The new Public Sector Fraud Authority will bring together the combined brainpower of data geeks and anti-fraud professionals to alert departments to the threats they face and design strong defenses against them, saving up to £180m this year alone.
As we tackle this waste, we will draw on our wealth of expertise in this area to ensure we deliver as quickly as possible. This is what taxpayers rightly expect, and that is why the Chancellor and I will be consulting Lord Maud, who eliminated more than £20 billion of waste by the end of the Cameron government.
The scale of change we need to see in government is more than a detail – it needs to be significant if we are to balance the books and live within our means to help reduce inflation.
Crucially, this must be combined with wider reforms to improve the productive capacity of the economy, such as developing our skills base and tackling the high levels of inactivity in the UK labor market. At last count, there were still 320,000 fewer people in employment compared to pre-pandemic levels. This decline in worker participation is a risk to the UK’s economic stability and also limits UK growth as businesses struggle to fill roles and the economy’s productive capacity declines. It is an issue we cannot ignore if we are to maximize the great potential of this country.
The road ahead will not be easy, but a firm grip on inflation and public finances is the foundation of economic growth. And it is this growth that will deliver more jobs, sustainable funding for high-quality public services and ultimately pave the way to the competitive low-tax economy we all want to see.
John Glen is Chief Secretary to the Treasury and the MP for Salisbury
