Inflation - No surprise that it's high on PM's priority listpublished at 15:09 Greenwich Mean Time 4 January 2023

15:09 GMT 4 January 2023

Alex Forsyth
Political correspondent

Sunak: “First, we will halve inflation this year to ease the cost of living and give people financial security.”

The prime minister knows rising prices are one of the biggest challenges facing many families right now, so it’s not surprising he’s put this high up his priority list.

Some economists think inflation might have already peaked, and the Bank of England has already predicted it will fall mid-way through this year so you can see why the prime minister might feel able to make this pledge.

However, there will still be huge challenges facing households, not least those who are facing higher mortgage payments because interest rates have gone up. The cost of living will undoubtedly be one of the issues that dominates Rishi Sunak’s premiership.

Rishi Sunak's speech was wide-ranging - touching on subjects as varied as violence against women, vandalism and affordable childcare - and, as expected, he said he wanted everybody to study maths in some form up to the age of 18.

But the meat of his speech was in five key pledges, which he said the public should judge him against.

They are:

1. Halving inflation to ease the cost of living and give people financial security
2. Growing the economy, creating better-paid jobs and opportunity across the country
3. Ensuring our national debt is falling to secure the future of public services
4. Cutting NHS waiting lists so that people get the care they need more quickly
5. Passing new laws to stop small boats, making sure that those who come to the UK illegally are detained and swiftly removed

Stay tuned for analysis of each of these pledges from our correspondents.

Nick Triggle
Health Correspondent

Despite all the attention being on the long waits for ambulances and in A&E, the prime minister preferred to make reducing the waiting list for routine hospital treatment one of his five key priorities.

Currently more than 7m people are waiting for care in England – that is one in eight of the population.

Reducing this number – it is climbing every month – will be a challenge. Most experts believe it will be 2024 before the overall numbers start falling – although progress is being made on the long waits of over 18 months.

The problem facing the NHS is that it is still not running at full capacity – hospitals are struggling to carry out as many operations as they were doing before the pandemic.

In November the National Audit Office warned attempts to rectify this and tackle the backlog were at serious risk because of staffing shortages and a lack of beds.

Sustained strikes by nurses will make this even more difficult.

Sunak is asked why he isn't willing to negotiate on pay rises for NHS staff despite saying he's keen on dialogue with trade unions.

Sunak says "the door is always open for dialogue" and he wants to have a good two-way open and honest conversation that is "rooted in what's reasonable and affordable for the country".

He says the 19% pay rise asked for by nurses' unions is not affordable.

Next up is a question on strikes from Jason Groves, political editor of the Daily Mail, who asks if Sunak thinks the government can legislate its way out of the problem.

Sunak says the government's door is always open and it is "very keen on dialogue".

The work done by the public sector is valued and respected, he says - adding that what is done should be affordable for the country.

He says unions play an important role, and people should have the right to strike - but that has to be balanced with the right of the British public to be able to go about their lives without disruption.

The next question is on whether all of Sunak's five pledges - not just the promise to cut inflation by half - are meant to be fulfilled this year, including tackling small boats and fixing the economy.

Sunak says: "My expectation is that we will be able to halve inflation by the end of this year... I'd like the economy to be growing by then as well."

He doesn't explicitly answer the question of ensuring national debt is falling, but says there is a "plan in place" for reducing it.

On NHS wait times, he outlines a gradual plan to reduce waiting times for elective surgeries. "We are on track to eliminate the waits [of] one and a half years," he says.

"In all of these things, I've deliberately not put a specific [target] month.... because I don't think that's responsible with goals that are so complicated."

He adds that some of the factors affecting them are out of his control as well.

Sunak is asked about childcare for families in the UK - he has been accused of shelving a set of policy reforms championed by Liz Truss.

He says that the government is committed to ensuring good, available, flexible and affordable childcare.

"The fact that I spent a lot of time talking about family hopefully gives you and everyone some confidence that we will support families in all forms," he says.

The UK is among the most expensive countries for childcare in the world, according to the Organisation for Economic Co-operation and Development.

The next question is from Beth Rigby, the political editor of Sky News.

She asks how Sunak expects people to believe he's any different from his predecessors.

The PM says the public have seen him in various roles, including as chancellor during Covid. He says he probably wasn't known before then. "I'm proud of my record," he tells her.

Referring to his five promises, he says again they are clear and he wants to be held to account.

He briefly talks about the issue of ambulance times, saying Covid has "had an impact", but he wants to begin reversing that, and his pledges make clear his intention to do that, he says.

Sunak is asked whether this is the wrong time to be concentrating on waiting lists when there are queues of ambulances trying to get people into hospital.

Sunak says "my priority is to do both".

"The most pressing priority we have is to move people into social care in the communities to get ambulances flowing and make sure people are moving quickly into A&E to be seen," he says.

He's also asked about the possibility of pausing elective procedures as a way to have less people in hospital. On elective surgeries being cancelled, Sunak says: "That's what we shouldn't do - that's what happened during Covid, we stopped doing elective surgery... the reason we've got a huge waiting list is because we're having to catch up with that."

He says one of the government's initiatives is to create elective surgical hubs and community diagnostic centres where people can get treatment they need away from the acute part of a hospital which would increase the ability to treat people.

Sunak is taking questions now.

Our political editor Chris Mason says the health service is under extraordinary pressure now and that many people watching will ask: "Is that it?"

How soon will things improve in the NHS this winter, he asks the PM.

Sunak acknowledges that is what people will be most worried about, and says there are a range of things the government is doing that will make a difference.

He says there are around 13,000 people in hospital beds that should be back in their communities or in social care and that's what is keeping hospitals full.

To solve this, half a billion pounds have been put into what's known as early discharge to help address this problem, he says.

He adds that the government is also rolling out "virtual wards" that will help some patients to be treated at home, which will free up capacity in the NHS.

And are plans for a new "fall service" to treat people at home who have suffered falls.

He says there is also a plan to reduce elective surgery waiting times.

Sunak says he believes that in just a few months nobody will be waiting a year and a half for treatment.

After that speech we're moving onto questions now from journalists, starting with our own Chris Mason.

Sunak concludes his speech by saying he hopes he has begun to earn people's trust in his first few weeks on the job, and repeats the five priorities he outlined earlier.

"But I know this is just the start of what we need to do to build a better Britain together," he says.

"Others may talk about change - I will deliver it.

"I won't offer you false hope or quick fixes, but meaningful lasting change... I pledge that I will be honest about the challenges we face, and I will take the tough but necessary decisions.

"I will only promise what I can deliver," the PM concludes.

Sunak's wide-ranging speech continues. He's now talking about the NHS, recalling memories of his dad working as a doctor and his mum a pharmacist.

"We've significantly increased funding for health and social care," he claims, before admitting there are issues.

"At a time when we're putting record sums into the NHS, and recruiting record numbers of staff, there's a need to recognise that something has to change," Sunak goes on.

This doesn't mean structural reforms, he says, but it does mean patients must have greater choice in their healthcare and the system must be better - both for them and for the health workers. He suggests he doesn't mean privatising the service.

"We all want the same thing when it comes to the NHS," he says, and that is to make it as strong as possible.

Sunak says education is a personal issue for him because "every opportunity I had in life began with the education I was so fortunate to receive... the single most important reason why I came into politics [was] to give every child the highest possible standard of education".

"With the right plan and right commitment I don't see why we can't rival the best education systems in the world," he says.

To do that, Sunak says we'll need to fix the damage of Covid, especially for younger pupils - and it will require more investment. He says that's why in the Autumn Statement two weeks ago, the government provided £2bn for schools.

"That's not the limit of our ambitions - we're not content on just cashing up."

He says we need to reimagine our approach to numeracy and says the UK is one of the few countries to not require our children to study some form of maths up to the age of 18.

"Letting our children out into that world without those skills is letting our children down... I am now making numeracy a central objective of our education system.

"Improving education is the closest thing to a silver bullet there is."

The prime minister says people need to feel safe in their communities.

An extra 20,000 police officers will patrol the streets by this spring, he says.

He adds that violence against women and girls has to be stopped, and that means men need to take responsibility for creating a culture and society where women are safe.

He speaks about reducing reoffending and beating addiction, saying heroin and crack addicts account for half of all robberies.

It's a wide ranging speech.

Sunak is now also mentioning vandalism, saying that some people spray graffiti on war memorials and discard needles in children's playgrounds.

It makes life miserable for so many, he says, adding that the government will crack down on anti-social behaviour.

"Wherever you live in our United Kingdom, you should be able to feel proud of your community, and that's what we'll work together to achieve," Sunak says,

Economic promises not spectacularpublished at 14:17 Greenwich Mean Time 4 January 2023

14:17 GMT 4 January 2023

Faisal Islam
Economics editor

The promise that “inflation will be halved” this year, reflects existing forecasts. The government’s independent official forecaster the Office for Budget Responsibility, and the Bank of England have both pencilled in an inflation rate below 4% by the end of this year.

This is partly the result of some of the high rises in energy, fuel, and food prices not being repeated again this year. The fall in wholesale energy prices due to warm weather in Europe and high gas storage levels, is also offering some reason for optimism here.

Both the promise to grow the economy and see the national debt falling do not have a timeframe attached. There would be some risk to making such a promise within this calendar year. Progress on that in time for the election, expected next year, represents a modest ambition.

The bigger picture here is that the economic promises made here are not spectacular. They perhaps reflect the fact that the main driver of economic numbers in recent years has been global events, not really within the control even of prime ministers and presidents.

The PM now moves on to talk about taxes: "If you work hard and play by the rules you should be rewarded," he says.

"As soon as we can, the government will reduce the burden of taxation on working people," Sunak says.

The PM's moved onto the economy now, saying a better future in the UK is "one where our economy is growing faster".

The way to do that, he says, is to focus on innovation. That doesn't mean a focus on "gadgets" but rather a focus on creating jobs, driving up wages and reducing the costs of goods and services.

"The more we innovate, the more we grow," he says, saying the UK must grow leading sectors such as AI, green technology and life sciences.

All of this can be done by "seizing opportunities of Brexit," he says.

"If we're going to achieve this future, people will have to work hard," Sunak says, adding he believes that if you work hard you should be rewarded.

Sunak goes on to say that he aims to "build a better future for our children and grandchildren" and to realise that vision, "we need to change our mindset".

He says politicians talk a lot about change but "the truth is no government and no prime minister can change a country through force of will".

"If we're honest, change also requires sacrifice and hard work. It's a big risk for a politician to say that, but the stakes are too high.

"Change is hard, it takes time, but it is possible... we know that because we've done it before, during the pandemic.

He highlights the success of state schools empowered by reform in some of the most deprived parts of the country, producing some of the best results.

Rishi Sunak has just pledged to halve inflation this year to ease the cost of living and give people more financial security.

But according for projections from the Office for Budget Responsibility (OBR), which is independent and checks the health of the UK economy, inflation is due to fall by more than half anyway.

The latest Consumer Price Index figure for inflation is 10.7%. The OBR expects inflation to fall to 3.75% by the fourth quarter of this year - well below half its current level.