Sir James Dyson has laid into Rishi Sunak’s economic strategy while praising former PM Liz Truss’ focus on growth. One of Britain’s most successful businessmen, Sir James criticised both the Conservative and Labour parties for not “going for growth”.
It comes after new figures showed that while inflation has fallen to 3.9 percent, GDP growth stats paint a more worrying picture of the UK economy.
It shrank by 0.1 per cent between July and September, putting the UK on the verge of recession. With one more quarter of economic decline, Britain would be in its first technical recession since the first lockdown.
Sir James told the Telegraph: “Wealth generation and growth became dirty words. I’ve always believed that inflation isn’t quite the enemy everyone thinks it is.
“If you’ve got growth, a bit of inflation doesn’t matter. If you get inflation down and kill growth, I think you’re in trouble.”
The growth-focused policy of Ms Truss and her Chancellor at the time, Kwasi Kwarteng, resulted in skyrocketing interest rates and a plummet in the value of the pound as financial markets reeled from the sudden and drastic tax cuts.
But Sir James praised the strategy, saying they were “doing the right thing”.
“I’m disappointed we’re not going for growth,” he said. “I’ve made that plain. I was hopeful [with Ms Truss and Mr Kwarteng]. I thought they were doing the right thing – I’m the only one who did.
“Kwarteng wasn’t raising taxes. He was going for growth, which I think is the right thing. It allows us to pay for things and generates wealth.”
Growing the economy has been named as a priority by both Rishi Sunak and Sir Keir Starmer – who is predicted to win the next election.
Sir James’s criticism was not solely aimed at Rishi Sunak but also at Labour, the party predicted to win the next election. The Prime Minister has met his target to halve inflation this year, after it fell from 10.7 percent at the start of the year.
He has also made growing the economy one of his five priorities, saying it would help create “better-paid jobs and opportunity right across the country”. But his other pledges on inflation and stopping the arrival of small boats across the Channel appear to have dominated government thinking.
Mr Sunak and Jeremy Hunt, the Chancellor, are now under pressure from Tory MPs to cut tax in order to boost the economy.
On Thursday, government borrowing figures suggested that Mr Hunt had enough financial headroom to make £12 billion worth of tax cuts over the coming months.
Responding to the GDP data, Mr Hunt, said the medium-term outlook for the economy was “far more optimistic” than the recent figures suggest.
“We’ve seen inflation fall again this week, and the OBR [Office for Budget Responsibility] expects the measures in the autumn statement, including the largest business tax cut in modern British history and tax cuts for 29 million working people, will deliver the largest boost to potential growth on record,” said Mr Hunt.
Martin Beck, chief economic adviser at EY Item Club, said: “October’s decline in GDP, the growing drag from past rises in interest rates and industrial action holding back activity in some sectors mean the economy in the fourth quarter is likely to flatline at best, with a technical recession a serious possibility.”
The Office for National Statistics (ONS) said much of the revision came from a poorer than previously assessed performance by small companies, film production, engineering and design, and the telecommunications and IT sector.
