Jeremy Hunt invokes Johnson and Osborne after criticism of government’s long-term investment
The Chancellor Jeremy Hunt was forced to defend the government’s approach to long-term investment today after he came under fire at a meeting of City grandees in the Square Mile.
Speaking with the Lord Mayor Nicholas Lyons at a pension investment summit at Mansion House, Hunt pointed to decisions taken by Boris Johnson and George Osborne after he was criticised for a failure by government to finance major infrastructure projects.
“For people around this room whose careers are driven by delivering long term returns, one of the things I think that has been a real failing in this country is lack of long term investment – not just in infrastructure, but we don’t have a state pension system, we don’t have a sovereign wealth fund,” Lyons said to the Chancellor.
“To what extent do you think there is an appetite within our government class to think about putting money aside today for the future — beyond certainly the next election,” he added.
“People in this room believe very passionately in the importance of government making long term investment, long-term commitments in the future health and welfare of this country and its people.”
The comments from Lyons may signal some discontent in the Square Mile over a perceived lack of backing for major infrastructure plans after the government scrapped HS2 at the Tory party conference earlier this month.
The comments may also be particularly chastening after the Prime Minister Rishi Sunak rolled out the Conservative party’s new slogan “making long-term decisions for a brighter future”.
However, Hunt defended the government’s record and claimed that “beneath the headlines” and “froth” of the media, ministers had taken decision to back long-term projects over the past 13 years, citing Boris Johnson and George Osborne as examples.
“On investments in infrastructure, the decision — and this was led by Boris Johnson, who is not often credited with these things — what Boris did was restart capital spending from £70bn to £100bn a year,” he said.
“The decision to protect the research budget, going all the way back to George Osborne in 2010, the whole austerity period, the one thing we said we’re not going to do is cut our investment in research and development. That is why we are Europe’s life sciences centre.”
Hunt added that the government had ramped up investment in state education over the past 13 years and had now seen state school leaving standards “rise to the highest in the Western World”.
The comments came in an exchange at a pension summit this morning as ministers look to unlock a wave of capital from the sector to flow more readily into infrastructure and start-up firms.
Ministers have championed a move to get more pension cash flowing into start-ups after nine top pension firms signed a deal to commit five per cent of assets to unlisted equities this summer. Insurance group Aon added its name to the list of signatories today.
Solvency rules governing insurance firms are also in the process of being revamped in a bid to free up billions of pounds to flow into the economy.