Tim Barnes is the Conservative Prospective MP for the Cities of London & Westminster. He shared his thoughts on the implications to our economy of falling inflation, improving retail growth and the risks of an incoming Labour government.
"In my day job, I run a small charity that helps to promote the idea of entrepreneurship.
"The idea of helping people to get along by starting a business that will help them to create a better future for themselves and create wealth for the people around them, create jobs, and ultimately go on to become a substantial business that will pay more tax for the public services that we all want to see.
"So, I spent a lot of the time discovering and looking and thinking about economic data, and that's why I'm really pleased with some of the statistics that have been coming out over the last couple of weeks.
"The big one has been to see the headline rate of inflation fall to about 2%.
"That's the top range of the target that the government sets for the Bank of England and others to work towards.
"Overall, we're in a really good place compared to where we’ve been.
"This shows that many of the economic policies that we've had in place over the last couple of years are really beginning to work. "But there are other signs, too. "Today, we've seen some really good data on retail figures.
"Retail growth in May topped about 2.9%.
"That's way ahead of the forecasts of about 1.9%.
"Why does that matter?
"Well, retail data tells us what consumers are thinking about. It means we're going out.
"We're happy to be spending a little bit more money than we were before, because we feel things might be getting better, too.
"So with inflation coming down and retail sales going up, there are really good signs that the economy is in a good place.
"And that's been the case for most of the time since 2010, during which the Conservatives have been in power.
"In fact, since 2010, the UK economy has grown about 24%. That's more than any other similar countries.
"More than France is more than Germany, Italy and any of the other European countries that we might judge ourselves against. It's been a really good record.
"Has its ups and downs.
"Sure, but so does every economy.
"And right now, we're into the early stages of a nice settled growth period where, with interest rates and inflation lower than they were, individuals and businesses will be able to make serious long-term investment decisions, which we all desperately need them to do to be able to grow the economy further, create more of that wealth, create better standards of living for everybody, and generate more of the tax that we want for everything from the NHS and schools to defence.
"But sometimes there are problems that come along which government policies can't directly address. They can only manage.
"And we've seen several of those in the last couple of years, most obviously Covid.
"Covid was like going into a major war for two years. We spent billions on that, and it had a really, detrimental effect on the amount of national debt.
"I still think it was the right thing to do. I think it was the right thing for Rishi to introduce the furlough scheme when he was chancellor and to protect the jobs of a third of all of those who worked in the private sector by keeping them employed, rather than see mass unemployment and something that might have looked like a 1920 style economic crash, a catastrophe that would have taken decades to recover from, it's also been the case that the unprompted, illegal invasion of Ukraine by Vladimir Putin, pushed up worldwide energy prices and worldwide food prices.
"Now, that led to real inflationary effects.
"And that's why it's great that inflation is coming down again and it meant that the government was put into a position where it also had to manage the effects of that, and introduced an energy price cap, which again, added billions to the national debt.
"Now, debt, national debt, is really bad when it gets beyond a certain point. Firstly, the government spends loads of money paying on interest.
"And that's just like, you know, when you borrowed on your credit card and you have to spend too much money at high interest rates.
"And the more you borrow, the less safe people feel you are, the more the interest rate.
"It also has its own effects on inflation, and it means that we have to spend money on finance rather than necessarily on the things we might want to see, whether that's tax cuts or increased public spending.
"So we need to see that debt come down when it has begun to come down, when we have got control of the economy, we should look to reduce taxes away from this high that we've reached right now in order to be able to encourage more growth in the future.
"We should not be looking at this as the new normal and the basis from which we can increase, taxes, in the future, which is exactly what Labour's doing.
"And today, there was a story in the Guardian about some unpublished tax plans that the Labour Party has to increase capital gains tax by about 8 billion a year.
"And that's because they want to tax those very people who are creating wealth, small business owners, when they want to hand their business on to the next generation. I don't believe that's good for the economy.
"I don't believe it's good for any of us as individuals. And I don't believe it will ultimately help save the public finances, because the more and more people are told that they're going to be heavily taxed, the less and less they're going to want to take the risk to start a business in the first place.
"We need that kind of entrepreneurial activity.
"That's what I spend my daytime and working life working towards.
"I don't want to see the Labour Party ruin it."
