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.