Grantham MP Gareth Davies has called on the Chancellor to focus on business investment and tax incentives to promote economic recovery.

His comments published last night on the Conservative Home website comes as Chancellor Rishi Sunak will deliver his budget today.

The budget is expected to reveal a range of initiatives to promote economic and social recovery, as well as continued much needed support to businesses hit by lockdown.

Already, the government has spent £290 billion on supporting businesses through the pandemic, the MP explained, and if the £20pw Universal Credit Uplift was made permanent, that would cost £6 billion a year.

Furthermore, the Office of Budget Responsibility has also warned the ageing population will cost an extra £39 billion a decade in pensions and extra health and social care.

Mr Davies writes there appears to be a cross-party appetite for more spending that previously people would have been comfortable with.

"This has led to the presumption that this will require far more borrowing, even after we re-open our economy, and it is also clear that tax must play its part as well."

But the MP warned the government was only able to offer "unprecedented economic support" due to the "robust public finances" brought about by recent Conservative governments.

The MP wrote: "While we have seen first-hand the benefits of balancing the books in good times, to help us in bad times, we need to go further to outline the wider risks to people's everyday lives.

"We should be straight with the British public about what continued spending means, especially as this relates to increasing our national debt – and this should start with a reminder of what we inherited from the Labour Party in 2010."

Mr Davies warned that it led the last Labour government under Gordon Brown to be spending more on interest payments than on schools.

Interest rates are at their lowest in history, continued the MP, who has a background in finance, and even a 1 per cent increase in interest rates would cost the Treasury £20 billion a year.

Mr Davies then said as a longer term strategy, the budget should focus on investment over general government spending, use investment as seed capital to mobilise private capital and to be selective with tax incentives to focus on innovation and entrepreneurialism.

He concluded: "If we do these things, we can grow our economy, enhance our productivity and maintain our global reputation for fiscal management."