Today in the House of Commons, George Osborne delivered the Coalition Government’s second Budget. It sets out how we will reform the nation’s economy so that we enjoy growth and jobs in the future. It is also about doing what we can to help families with the cost of living – including an immediate 1 pence cut in fuel duty.
In last year’s Emergency Budget the new Government had to bring the country back from the brink of bankruptcy. Labour had maxed out the country’s credit card, and left their bills for our children and grandchildren to pay. They doubled the national debt and as a result British taxpayers now spend £120 million a day paying off the interest on Labour’s debts. That is more than we spend on our schools or defence.
We must stick to the plan to tackle the deficit. But stability alone is not enough – Britain has to earn its way in the modern world. Under Labour, we lost ground in the world economy. We slipped down the league tables for economic competitiveness, as taxes got higher and red tape ever more restrictive. Manufacturing halved, as they placed all our bets on the City of London with a model for growth based on unsustainable public spending, immigration, and financial services.
With the government now accounting for half of our economy, we have to reform. We need a new economic model, one which is underpinned by investment, manufacturing and exports, so that Britain makes things again.
This Budget kick-started that reform with a tax cut for business, rate relief for small firms, a doubling of Entrepreneurs Relief and more support for research and development. We will scrap burdensome regulations that cost businesses millions every year and introduce a moratorium on all new regulation for our smallest companies. There will be radical reforms to the planning system to encourage more sustainable development. To ensure growth is more evenly spread, we have announced 21 new Enterprise Zones across the country. Creating a £3 billion new Green Investment Bank will encourage in another £15 billion in private sector investment in green projects. Investing £100 million in new science facilities will help ensure Britain stays at the forefront of innovation.
To reach our economic potential we have to support young people. Labour left Britain with a legacy of very high youth unemployment. This Budget will help them back into work with 100,000 work experience placements and 50,000 additional apprenticeship places, on top of the 200,000 already planned.
Charities will benefit too. A new scheme will allow Gift Aid to be claimed on small donations without the donor needing to fill in any forms at all. That means Gift Aid on the contents of the collecting tin and the street bucket. 100,000 charities gain about £240 million. There are radical plans to support the largest donations too. In future if you leave 10 per cent or more of your estate to charity, then the Government will take 10 per cent off your inheritance tax rate. Beneficiaries won’t be better off but charities will get £300 million more.
The Budget doesn’t choose between creating the conditions for future growth and helping families with the cost of living. Our plan for growth means doing both. At a time when money is tight for families up and down the country, people need to know that the Government is on their side.
That is why I am pleased that the Chancellor not only replaced Labour’s fuel duty escalator with a fair fuel stabiliser but also announced a 1 penny per litre cut in fuel duty – all paid for by a tax on oil companies. This won’t transform prices at the pump, but at a time when oil prices round the world are spiking, the Government is trying to ease the burden. Alongside the freeze in council tax, and the delay in the rise of Air Passenger Duty, it means the Government is doing what it can, even when money is tight.
The increase in the personal allowance will also make a difference to hard working low paid families. From April next year the personal tax allowance will increase by a further £630, to £8,105. That’s another real increase of £48 extra per year, or £126 in cash terms. Together with this year’s rise, that means a total of £326 extra each year for those working hard to support their families. And it means, just ten months into office, this coalition Government has taken 1.1 million low paid people out of tax altogether. First time buyers will also receive help with a new £250 million programme to help 10,000 people get on the housing ladder.
That’s why I am supporting this plan for growth. By helping families with the cost of living, and backing enterprise this Budget puts fuel into the tank of the British economy.
Peter Aldous MP 