Improving national employment figures

 

It is good to see that the Government’s economic policies are improving the employment rate across the country.

Figures show that the employment rate in the UK remains at a record high of 31.8 million, which represents 74.5% of the working-age population. In addition, unemployment is steady at 4.9%, the lowest rate in a decade.

Of course, these headline figures are good to see, but there is more good news in the detail. For example, wages grew at an average of 2.3% over the past year, which is well above inflation. This means that more and more people are enjoying real-terms pay rises, taking pressure off family budgets. Also, youth unemployment is down by 300,000 since 2010, and the women in work rate remains near its record high of 69.7%.

I am proud to be part of a Government that has been able to achieve this, and I will continue to do all I can to improve the lives of people in North East Hertfordshire, and across the country.

Making Tax Digital

The Treasury’s ‘Making Tax Digital’ programme looks set to be one of the biggest and most significant changes to the tax system in years. It will make HMRC one of the most digitally advanced tax administrations in the world by introducing simple, secure, and personalised digital tax accounts. This will lead to the end of the annual tax return – a particular hassle for many at this time of year.

In March 2015, £1.3b was allocated to introducing these online tax accounts to all businesses and individuals by 2020, allowing tax affairs to be monitored and updated throughout the year, using Government-provided software and apps, thereby ending the need for an annual tax return.

In addition to saving many individuals a lot of work, this will bring huge benefits to businesses. Many businesses report that they worry about having to wait until the end of the year, or even longer, to find out how much tax they owe, and so by enabling them to update their tax accounts throughout the year, they will be able to have much more certainty about their tax position, and allow them to budget accordingly.

This policy could prevent hundreds of millions of pounds of tax loss from incorrect tax returns, give businesses and individuals more certainty about their tax bill, and save millions the worry of the annual tax return, and I will press to ensure that it is implemented on time.

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Recent low inflation rates

There has been some encouraging news on the inflation rate recently and it is important to examine the benefits that this will bring to our economy. The CPI inflation rate fell to a record low of 0.3% in January, helped especially by lower food and oil prices. This downward trend looks set to continue with the possibility of negative inflation coming briefly in the Spring, according to the Governor of the Bank of England. Mr Carney also said that the falling oil price was “unambiguously good” for the economy and motorists have seen petrol prices fall by more than 8p per litre.

All this will have positive effects on the British economy, with the Bank of England predicting growth this year of 2.6% which have led to forecasts of strong wage growth this year.

This is good for hardworking people across the country. Falling prices and rising wages means that more and more pressure is being lifted from family budgets, and this should support growth in consumer spending.

The recovery is, of course, not complete, but these figures are another sign that the Long-term Economic Plan is working. The deficit is down by a half, a thousand jobs have been created for every day that this Government has been in office, and now, low inflation and increasing wages are making life easier for families up and down the country. Britain should stay the course.

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Tax cuts – part of the plan

The Conservative Party believes that if someone works hard and earns money, they should be able to spend as much as possible, as they like. The Government has no intrinsic right to it: it’s yours. This is why low taxes are so important. People spend their own money, helping the economy.

Since 2010, this Government has cut income tax for over 24 million people, with an average saving of £705, but the Conservatives want to go further after the election. We plan to take everyone who earns less than £12,500 out of income tax altogether, and raise the 40p tax threshold so that no-one earning less than £50,000 pays it. This will provide a tax cut and more disposable income for 30 million people. It will help the economy to grow.

We would do this while cutting the deficit. Over the last five years, Conservatives in Government have halved the deficit while cutting income tax, and in the next Parliament, we’ll do the same again: eliminating the deficit while reducing taxes. The Prime Minister has said that after years of sacrifice, the British people deserve a reward. People whose hard work and personal sacrifices have got this country through the difficult times should come first.

The other main parties have said that, instead, they would tax people more. This would not recognise the sacrifices that the British people have already made, and it would be an attack on aspiration. Only the Conservatives are committed to cutting taxes and building a Britain that rewards work.

Our long-term economic plan will cut tax, create growth, and allow us to cut the deficit.

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The latest economic figures from the ONS – the plan is working

It was nice to see good economic figures coming from the Office for National Statistics. In 2014, the British economy grew by 2.6%, the fastest since 2007, before the start of the Brown crash. This 2.6% growth is up from 2013’s 1.7%, and many economic sectors are performing well. Locally, our economy is growing even faster, at 6% a year.

On top of this, the IMF is predicting national growth of 2.7% next year, with other forecasters predicting figures as high as 3%. We have every reason to be encouraged by the state of the national finances.

These results put the UK amongst the best-performing of all the major economies, and, with oil prices tumbling, credit remaining affordable, and inflation at a record low, disposable income is rising. This puts us in a strong position.

There are international storm clouds and uncertainties of the General Election are coming up. It is more vital than ever that the UK sticks to our long-term economic plan and stay on the road to a more stable and more secure future. A Labour/SNP coalition would lead to economic chaos.

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The Autumn Statement

Yesterday, the Chancellor delivered his Autumn Statement – his last before the General Election. For those listening, it seemed like one bit of good news after another. This Government has put our economy back on the right track, following the mess that it inherited. I would like to go through some of the most ways in which our economy is now faring better, and then have a look at some of the new announcements that the Chancellor made.

When this Government took office, the deficit was the most immediate danger that our economy faced, but Conservatives’ fiscal discipline and tough decisions have paid off. The deficit is falling from £98 billion last year to £91 billion this year, just as it has fallen in every year of this Government’s administration. It is forecast that the deficit will be eliminated altogether by 2018/19, taking the UK, after so many years, out of the red and back into the black.

The confidence in the market that this discipline has brought has been good for jobs. Last year, the number of people unemployed fell by 538,000 – which was the biggest annual fall ever recorded – and a similar number is forecast for this year.

For those in work, the Office for Budget Responsibility predicts that ‘meaningful wage growth’ will pick up next year and grow above inflation for the next five years. Inflation forecasts are significantly revised down to 1.5% this year and 1.2% next year. This means that people’s wage increases will actually be increases in real terms. As well as this, the economy will grow by 3% this year, which is the highest rate of growth in the G7.

Along with this good news, the statement set out some of the Government’s future economic plans, many of which are of particular interest to North-East Hertfordshire.

The first of these is the reform of stamp duty which has just taken effect. The changes have ended the old system of the ‘slab’ tax – whereby an amount was calculated on the total value of a home – and introduced a ‘slice’ system, where different levels of tax are paid on portions of a home’s value that fall within certain bands – just like income tax. This will result in a tax cut for 98% of stamp duty payers, with the average family home of £275,000 benefiting from a cut of £4,500. The only homes that will be subject to a tax rise are the most expensive 2%.

With strong science-based industries in the constituency, the announcement that Government student loans of £10,000 will be available for those undertaking post-graduate Master’s degrees is particularly welcome. This will encourage many more people to take higher degrees, preparing more people for work in the high-skills industries.

With other measures like allowing ISAs that are passed to a partner after death to keep their tax-free status, abolishing National Insurance Contributions for employers who employ an apprentice under the age of 25, cutting Air Passenger Duty for children under the age of 12 – rising to 16 in 2016 – , introducing a new 25% tax on multinational companies that artificially divert profits abroad, continuing the doubling of Small Business Rate Relief, and continuing to cap the inflation-linked increase in business rates at 2%, this was a strong and positive Autumn Statement. It showed how far the economy has come since Labour’s crash, and how Conservatives in Government are implementing their Long-term Economic Plan, so that the recovery that they have secured can make life better for everyone.

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Budget Follow-up…

Further to my press release about Wednesday’s Budget, I was also pleased to hear about the additional £168 million which is to be made available for pothole repairs in 2014/15. At a local level, many of my constituents suffer as a consequence of these and more money to deal with roads which are damaged will certainly be welcome.

Likewise, the announcement in the Budget that there is to be an investment of £100M for the development of Greater Cambridge until 1919-20 (which could be worth up to £500 million over 15 to 20 years) given the proximity to the City to North East Herts, will be very beneficial to many of my constituents as well, not to mention the large boost it will give to the local economy. I look forward to the City’s development. More details about the Budget can be found here.

Unemployment figures down for September

I am pleased to hear that unemployment figures for September which stand at 1,178 unemployment claimants have gone down again for North East Hertfordshire. The figure represents a rate of 2.4% of the economically active population aged 16 to 64, the 485th highest of the 650 UK constituencies and a drop by 176 compared to the figures for September last year. Furthermore this September’s figures are also 26 lower than for those in August which is even more encouraging. We keep hearing good news about the economy in the news and clearly this is being reflected in unemployment claimant levels, particularly in my constituency.

Measures taken by HMRC to tackle tax avoidance and evasion…

HMRC have outlined their measures to combat aggressive tax avoidance and evasion. Legislation has been used to close tax loopholes and deter those seeking to exploit the situation and the newly passed Finance Act of 2013 defines which tax avoidance schemes are seen as abusive or artificial.

The Government has invested almost £1 billion into Revenue and Customs to assist with tackling tax evasion. According to the figures published, by the end of 2014-15, this investment will have contributed to the gathering of £22 billion in extra tax revenues each year which is a significant amount. If we are to deal with the deficit, curbing tax evasion is important, so that the UK receives the money it is due. This is the money to fund important public services.

Positive News from Sir Mervyn King…

I was very pleased to hear today that Sir Mervyn King is predicting a rise in the Bank of England’s growth forecast by 0.5% in the second quarter. This is excellent news and might well provide light at the end of the tunnel following a period of huge economic uncertainty. This projected growth was also confirmed by the Chancellor in his speech to the Confederation of British Industry last night, which despite stubbornly high inflation figure projections, makes for doubly good news. If the economy can just get kick started into forward growth, it can only be a matter of time before other economic indicators, which have shown poor performance previously, will start to pick up too. Sir Mervyn has suggested that the road to recovery might be a bumpy one with periods of economic flat lining, but it is extremely positive that after some poor economic figures, we can at least expect growth in the second quarter going forward, which will be a big boost to British business.