UK 'prepared for the shock', says Treasury Secretary ahead of Reeves US visit - as UK growth forecast slashed in wake of Iran war
Despite stagnation, the UK is still on track to be the fastest-growing European economy in the G7, says James Murray
The UK is in a better position to tackle the economic challenges posed by Iran than its predecessors were with Ukraine, the Chief Secretary to the Treasury has told LBC.
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Speaking to Nick Ferrari at Breakfast, James Murray, Chief Secretary to the Treasury, said that the government has been focusing on initiatives which ensure it is “better prepared for shocks in the future”.
This comes as the IMF announced that the UK’s growth forecast has been cut by 0.5%, in contrast to the US, whose growth has only dropped by 0.1%.
Despite this, Mr Murray insisted that this government has been better prepared going into this conflict than its Conservative predecessors were in Ukraine, due to energy independence and economic security measures the Chancellor has taken.
Read more: Starmer and Macron to co-host Strait of Hormuz talks in Paris on Friday
Read more: Rachel Reeves warns Iran war will ‘cost British families and businesses’ as prices surge
The Chief Secretary told Nick: “What it underlines for me is the importance of the work we've been doing and are continuing to do to improve our energy independence, to make sure we have greater homegrown energy and greater energy security, and also to make sure we have economic security."
“So everything we've been doing about being fiscally responsible, increasing headroom in the public finances, all of that means we will be better prepared for shocks in the future.”
Despite the conflict, the Chief Secretary insisted that the UK is the “fastest growing European economy in the G7”.
It has also emerged that the government will invest £50 billion into Net Zero initiatives. This sits second to the UK’s total defence budget, which sits between £60-65 billion.
Explaining the soaring coasts, the Labour MP for Ealing North said that the government is “making a transition in terms of our energy supply.”
He told Nick: “One of the critical reasons why we’re spending money on new energy sources is for the energy independence I was talking about a few minutes ago.”
“When you look at what’s happening right now in the Middle East, what this reminds us is when we are tied to oil and gas prices, which are set internationally, which we don’t have control over. That puts our economy in a less stable position than if we had energy independence.”
Nick also pushed Mr Murray on Universal Credit, claimants of which have soared by 1.5 million since his government came to office.
The Chief Secretary said: “We know there’s a huge amount to do to turn around the broken welfare system that we inherited.”
One of the ways Mr Murray hopes to do this is to target young people, 1 million of whom are not in education or employment.
He explained: “If young people go onto benefits at a young age, there’s a real risk they stay on benefits for a lot of their life,” he explained.
“So actually, if we can get young people into work at an early age, that’s better for them because they will have a better life when they are able to work, if they can get a job, and it’s better for the economy and it helps bring the welfare bill down.”