Last week, new figures showed that the UK economy has turned a corner. Following a difficult few years spent grappling with the global effects of Covid-19 and Putin's war in Ukraine, latest figures now show that the UK economy is growing at the fastest rate in two years. Growth in the early part of the year was led by services - which includes sectors such as hospitality, arts and entertainment - and was likely to have been helped by an early Easter in March, according to the Office for National Statistics.
Politicians love to talk about growth - but what does it actually mean, and why does it matter?
At a basic level, growth literally means that there is more money in the economy. In large part, that's driven by businesses earning more money, and international investors choosing to spend more money here in the UK. In my role as Economic Secretary to the Treasury and City Minister, I work to stimulate international investment in the UK's financial services sector, in which this country remains a leading light. However, growth doesn't just come from financial services - the Government is working to ensure that a wide variety of businesses can grow and scale. When Tata invests in a new battery factory in Somerset, that drives growth - it means that there's more money in our economy than there was previously.
But why does that matter? Growth translates into higher overall profits for businesses; in turn, these businesses are taxed. The tax that these businesses generate enables us to pay for key public services, like the NHS and schools. Without growth, the Government can only reallocate existing resources, increase taxes, or borrow more money, to fund public services. Too much borrowing means lots of debt, and servicing debt is expensive; too much tax, and it becomes difficult for ordinary people to cover their day-to-day costs. That's why last week's numbers are positive - they mean more jobs, better services, and a better environment for business. They also mean that this Government can continue towards its long-term ambition of reducing taxation for ordinary people. As Conservatives, we know that giving people more of the money that they earn to spend on the things that they need is better for our economy.
Of course, there is more to do. In my role as Economic Secretary to the Treasury and City Minister, I'll continue to work alongside my Treasury colleagues to keep our economy moving from strength to strength. As your MP, I'll also work to ensure that people in Hitchin & Harpenden see the benefits of this growth, through greater investment in public services locally. For small businesses in our local area, more growth also means more money in the economy which might be spent on their goods and services. Nevertheless, last week's figures are a sign that our economy is moving in the right direction - onwards and upwards!
