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Jeremy Hunt leaves Downing Street in central London on his way to make a full budget statement in the House of Commons on Nov. 17, 2022.JUSTIN TALLIS/AFP/Getty Images

Finance minister Jeremy Hunt pushed back against talk of decline in Britain on Friday, promising that Brexit would catalyze a new age of growth for an economy that has increasingly lagged behind its peers.

Mr. Hunt, who steadied financial markets after the turmoil of former prime minister Liz Truss’ “mini-budget” in September last year, signalled he would stick with tax hikes in his upcoming annual budget that have angered some lawmakers in the governing Conservative Party.

He repeated his ambition to create a “new Silicon Valley” with a shift to new, high value industries such as renewable power and advanced manufacturing.

“Our plan for growth is necessitated, energized and made possible by Brexit,” Mr. Hunt said in a speech at Bloomberg in London.

With six weeks to go until his March 15 budget and his party trailing far behind the opposition Labour Party before an election expected next year, Mr. Hunt said he wanted lower taxes but that sound money had to come first.

It was time for a “fundamental program of reform” for Britain’s labour market, Mr. Hunt said, as workers who dropped out of the work force during the COVID-19 pandemic needed to come back into employment.

His comments come days after the head of the Confederation of British Industry said Britain had been “spectacularly overlapped and overtaken” on green investment.

“Confidence in the future starts with honesty about the present, and we should not shy away from the biggest challenge we face which is our poor productivity,” Mr. Hunt said. “Our plan for long-term prosperity tackles that challenge head on.”

Rachel Reeves, the Labour Party’s finance spokeswoman, said there had been 13 years of economic failure from the Conservative Party. “The Tories have no plan for now, and no plan for the future,” she said in a statement.

Mr. Hunt said declinist talk did not reflect the fact that Britain’s economy had grown by more than France and Germany since 2010.

More recent comparisons are less favourable: official data show Britain is the only Group of Seven economy that failed to recover its prepandemic size by the third quarter of 2022.

Most economists say Brexit has – so far – contributed to Britain’s recent weak business investment, trade and economic growth performance.

Mr. Hunt confirmed that reforms to the European Union’s Solvency II rules would be implemented in the coming months, allowing insurers to invest more in the economy.

He said Britain needed lower taxes, but signalled this was not imminent.

“With volatile markets and high inflation, sound money must come first, but our ambition should be to have nothing less than the most competitive tax regime of any major country,” Mr. Hunt said.

Tackling high inflation was a top priority.

“The best tax cut right now is a cut in inflation,” Mr. Hunt said.