ALEX BRUMMER: Chancellor Jeremy Hunt boards the fast train

The scale of tax bills, the surprising amount of debt and interest payments, and the focus on protecting the vulnerable dominate the debate over Jeremy Hunt’s first budget.

After all, building a credible fiscal strategy is what the fall statement is all about, even if hammering the working population with sweeping tax increases may not be the smartest way forward when the pips are already squealing from double-digit inflation and rising interest rates . .

If you read Hunt’s speech carefully, for those who held on after a series of shocks to boost earnings, a second layer is emerging that we can hear a lot more about in the coming months. The chancellor, it seems, is a fan of big infrastructure and the role it can play in driving energy security, productivity and growth.

Despite being on the wrong side of the Brexit debate, he recognizes the opportunity that being free of Brussels bureaucracy offers the UK’s leading companies in life sciences and finance, along with advanced technology.

On the infrastructure side, Hunt understands that if new nuclear power is to flourish in the UK and give the country the reliable base load needed to support renewables, the UK government needs to reach the Treasury. It cannot rely on an insecure partner in China or the French government (owner of most of our nuclear fleet through EDF) to take full control.

That is why, contrary to much speculation, Sizewell C in Suffolk came through the capital expenditure review unscathed. Better than that, the UK is putting an initial £700m behind the clock to keep EDF engaged.

To the ghosts of the capital budget, HS2 seemed like an obvious target. Over budget, complex and the subject of intense nimbyism in Tory seats, it looked like a sitting duck. The project’s Leeds arm had already been demolished, but Hunt stuck with HS2 to Manchester and believes one only needs to look at the impact of the high-speed train from Tokyo to Osaka built over half a century ago to see the growth that can be achieved. generated. He is thought to belong to a small group of ministers who would have liked to see a branch linking Birmingham directly to Heathrow.

The true test of Hunt’s mettle at the Treasury will be Big Bang II’s embrace. He started that process for the City after reaching a deal with the Bank of England’s prudential department on vaporizing Solvency II and loosening insurance from current restrictions. The chancellor wants to go further than that.

His long service as health secretary has given him an insight into Britain’s brilliance in life sciences, which we saw in Covid-19. Here too, being free from EU regulations could bring huge benefits.

At the moment, British universities are pioneers in gene therapies, but the rules in Brussels severely limit what can be done, including making some of the work commercial. By setting its own rules, the UK could become a world champion and attract inward investment from the US and Japan. Similarly, a rapid, technological approach to new therapies by the regulatory body MHRA could support big pharma in this country.

One concern of those of us who supported the Liz Truss/Kwasi Kwarteng concept of investment zones is that they’ve been dumped by boss Michael Gove to the next level. However, a new iteration is coming. Rather than knowingly spreading across the country, Hunt is in favor of establishing such zones near universities.

Research and industrial parks have already grown organically in Oxford, Cambridge, Southampton and elsewhere. But why not Bradford, East Anglia, Wolverhampton, Keele, Sunderland and less obvious locations?

Sir Patrick Vallance, known for his pandemic broadcasts, will watch this.

It won’t be easy. Successes quoted by Hunt in his budget speech, Mayors Andy Street in Birmingham and Ben Houchen in Teesside, have worked because of leadership and willpower. There must be courage to challenge nimbyism in the form of planning wars, vigilance in the form of environmental restrictions, and a willingness to fight for tax breaks.

The budget was very short for specific support for entrepreneurship and entrepreneurship. Indeed, some tax measures, the limitation of capital gains and dividends, work in the opposite direction. Still, it is encouraging that innovation is not forgotten.