The Prime Minister's New Year speech

Today the Prime Minister is announcing five promises:

  • Halve inflation this year, to ease the cost of living and give people financial security 
  • Grow the economy, creating better-paid jobs and opportunity across the country 
  • Getting our national debt down, so that we can secure the future of public services  
  • Cutting NHS waiting lists, so people can get the care they need more quickly 
  • Legislating to stop the boats, making sure if you come here illegally, you are detained and swiftly removed 

Those five promises are not the limit of our ambitions. We now need to change the way the country works, raise our aspirations, and build that better future

We will do this with:
  • A more innovative economy
  • Stronger communities
  • World class education
  • Healthcare built around patients
  • Family at the heart of social life
    As well as peace of mind today, we need a better future tomorrow – with an ever more prosperous Britain. We’ll get there by taking the difficult decisions to ensure this great country achieves its immense potential.

    The Prime Minister’s five promises to build a better future for our children and grandchildren:

    • Halving inflation. We will halve inflation this year to ease the cost of living and give people the financial security they deserve. Inflation has fallen, but it is still too high. To reduce it, we will continue to work closely with the Bank of England, help people with energy costs and encourage people back to work.
    • Growing the economy. We will return to economic growth by the end of the year, creating better-paid jobs and opportunity across the country. Although we face economic challenges the fundamentals of our economy are strong, and the government is continuing to invest in innovation, skills and infrastructure.
    • Getting debt down. We will make sure our national debt is falling so that we can secure the future of public services. Without sustainable public finances we will not deliver sustainable economic growth – that is why we will maintain our fiscal rules, so debt falls as a share of the economy in five years’ time.
    • Cutting NHS waiting lists. The pandemic put huge pressure on the NHS, leading to 100,000s patients waiting too long for treatment. We’re on track to eliminate waits of more than 18 months by April – we will build on this and reduce NHS waiting lists by March 2024, so people can get the care they need more quickly.
    • Stopping the boats. We will pass legislation so that if you come here illegally, you are detained and removed. This builds on the five-point plan to tackle illegal immigration that the Prime Minister announced in December.

    But we need to change our mindset, counter the narrative of decline, and deliver a plan for a better future by:

    • Building a more innovative economy. By investing in science and technology, seizing Brexit opportunities and backing business, we can deliver a growing economy with better-paid jobs. If you work hard you should be rewarded – so we’ll reduce taxes as soon as possible and help those out of work into jobs.
    • Strengthening our communities. We’ll deliver on levelling up, building on the £11 billion we have committed to create jobs, upgrade infrastructure, and restore local assets. We’ll cut crime further, crack down on anti-social behaviour and beat addiction by putting 20,000 more police on the street and ensure they have the powers they need.
    • Raising education standards. Improving education is the closest thing there is to a silver bullet: every child should have access to the best education. Currently just half of 16-19-year-olds study maths. We are making numeracy a central objective, so we will work with the sector to move towards all children studying some form of maths to 18.
    • Building a healthcare system around patients. We want an NHS where patients are in control, with as much choice as possible. That means giving patients access to more information and data, using more independent capacity and no longer accepting variation in performance. Healthcare professionals will need to change how they work, so they are looking at that as they develop their workforce strategy.
    • Putting families at the heart of social care. This government is on the side of families – and we need to do more to help parents. So we’ll roll out Family Hubs to offer parents the support they need to raise a child.


    Jim said…
    We will halve inflation this year to ease the cost of living and give people the financial security they deserve.

    Infation (as the term is used today) is just really a measure of the rate at which prices increase. So if infation is at 11% at the start of 2022 an item that costs £100 will cost £111 by the end of the year. To keep things easy we will even pretend the PM halves infation right now. It does not get any cheaper, the £111 under 5.5% infation will cost £117.10 by the end of 2023.

    It has nothing at all to do with prices reducing and making things afordable giving people financal stability, I understand some people may not understand fully so assume he is saying prices will fall but I really should not have to explain that to an economist.
    Chris Whiteside said…
    He didn't say prices would fall. He said the rate of increase of prices (which is what inflation is) would fall.

    That brings us back towards price stability and it means that the pressure on the cost of living and on people's finances will be less than it would be if prices continued to increase at the same rate or, heaven help us, if inflation ran away as it did in the 70's when we had a classic wage-price spiral (exacerbated by fuel price shocks and a failure to control the money supply.)

    Actually pushing the general level of prices down would almost certainly be unachievable and trying to achieve it could very possibly result in a very serious recession.

    That would be a serious mistake in one direction. But many of the factors which led to that disastrous wage-price spiral in the 70's are present again, and not pressing down on inflation would be an equally serious error in the other direction.

    Aiming to halve the rate of inflation this year is a realistic objective and I think it is essential to do this.
    Jim said…
    I beg to differ, it says in black and white there "We will halve inflation this year to ease the cost of living".

    as you correctly point out it wont ease the cost of living , it will make the cost of living worse because the prices will continue to raise albeit at half the current speed.

    For so many now the terminal point has already been reached, so further increasing prices (no matter how quickly they increase) are pretty much by the bye. To ease the cost of living crisis either Prices need to fall so we need some deflation, or wages need to increase but that's the point isn't it.
    Chris Whiteside said…
    The cost of living will be lower if inflation is halved than it would be if inflation continues at the present rate.
    Jim said…
    The cost of living now is too high, that is why there is a cost of living crisis. Halfing inflation wont bring it down and ease it, it will continue to make it worse.

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