May 7, 2017
The Cost of Corbyn’s Chaos
• Families face a tax and debt bombshell under Jeremy Corbyn’s chaotic leadership. We have published an analysis that lays bare the estimated £45 billion black hole in Jeremy Corbyn’s nonsensical tax and spending ideas.
• His many, ill-thought through ideas simply don’t stack up and could not be paid for. The damage this bombshell would do to the country’s finances if Corbyn’s coalition of chaos were given the keys to Downing Street would be disastrous.
• Only a vote for the strong and stable leadership of Theresa May on June 8 will lock in the economic progress we have made.
Jeremy Corbyn’s £45 billion black hole would put our economic security at risk
We have done a best estimate of how much of a financial black hole Jeremy Corbyn’s chaos would blow in the public finances by the 2019-20 financial year. This relates only to his spending and tax promises. It has not been possible to estimate the damage that would be done to the government’s finances caused by crashing the economy – which would be the result of the tax and borrowing splurge Jeremy Corbyn and his coalition of chaos would inflict. This revealed:
• An estimated £14 billion of savings reversed. We have had to take some difficult decisions to get public spending under control and secure our economy, but Jeremy Corbyn would put that at risk with £14 billion of savings reversed: these include billions of pounds of increased welfare spending, including abolishing the benefit cap that makes sure benefits don’t pay more than the average household earns.
• An estimated £51 billion of new spending promises. Jeremy Corbyn and his team have been making reckless spending promises and would go on a splurge that would crash our economy and undo all the progress that has been made. These promises include increased benefits, nationalising Royal Mail and abolishing tuition fees.
• An estimated £19 billion of tax rises. Jeremy Corbyn would hit businesses and deter investment in this country just as we need to secure the economy with a plan for higher Corporation Tax and higher Capital Gains Tax. He also wants to tax families who have worked hard and want to pass something on to their children with hikes to Inheritance Tax.
May 4, 2017
Lower taxes
There is a clear choice between Conservatives who want to keep taxes down for working people and a coalition of all the other parties who want to put them up:
• At this election people will have a choice between a Conservative Party which always has been, is, and will continue to be a party that believes in low taxes and keeping taxes down for ordinary working people – or a Labour Party’s whose natural instinct is always to raise taxes.
• And if you need any evidence of that, just look at what their former Shadow Chancellor said about Labour Party policy. He said it would lead to a doubling of income tax, a doubling of national insurance, a doubling of VAT and a doubling of council tax.
• Whereas since 2010, the Conservatives have taken 4 million people out of paying income tax altogether and 31 million people have seen a tax cut.
• That’s the choice. Lower taxes under the Conservatives or higher taxes under Labour, the Liberal Democrats and the SNP.
May 2, 2017
Locking in economic progress – or putting it all at risk
• We need this election to secure strong and stable leadership to see us through Brexit and beyond – and lock in the economic progress we have made together.
• A coalition of chaos made up of our Labour, Liberal Democrat and SNP opponents bring a grave risk to our growing economy with higher taxes, fewer jobs, more waste and more debt. All that would hurt families’ finances and mean more uncertainty for British people.
• Your vote counts and will us help strengthen our economy and make life in the UK even better.
We need to lock in the economic progress we have made together
• We have cut the deficit by almost two thirds – helping secure our economy for the future. In cash terms, the deficit is down from £151.7 billion in 2009-10 to £51.7 billion in 2016-17. As a share of GDP, it is down by almost three quarters.
• Employment is up by 2.8 million since Labour were in power – meaning over 1,000 jobs have been created on average every day. That’s 2.8 million more people with the security of bringing home a regular pay packet. In the three months to April 2010, there were 29.0 million people in employment. In the three months to February 2017 there were 31.8 million people in work.
• Last year our economy grew faster than all but one other major advanced economy – as we make progress together. In 2016, our economy grew 1.8 per cent in real terms, second only to Germany among advanced major economies.
• We have delivered more dignity and security for older people in retirement. Pensioners with a full basic State Pension will receive over £1,250 a year more in 2017/18 than at the start of the last Parliament.
A coalition of chaos led by Jeremy Corbyn propped up by the Liberal Democrats and SNP would put our growing economy at grave risk
• They would all hit you in the pocket with higher taxes. Labour and the Liberal Democrats both want to put up the basic rate of income tax, and the SNP have already made Scotland the highest taxed part of the UK.
• They would all put our growing economy and jobs at risk with more debt and waste. Jeremy Corbyn wants to borrow £500 billion and thinks the last Labour government didn’t spend too much and ‘actually spent too little.’ The SNP’s economic mismanagement and tunnel vision on independence has contributed to Scotland having a deficit of 9.5 per cent – over double the UK’s. The Liberal Democrats want to borrow money forever.
• They would all disrupt our Brexit negotiations and make it harder to get the best deal to strengthen our economy. Jeremy Corbyn is a floundering, weak and nonsensical leader who would not get the best deal from the 27 European countries lining up to oppose us. His MPs, the Liberal Democrats and the SNP all want to stay in the EU – so they would weaken Britain’s negotiating hand.
GENERAL ELECTION ANNOUNCED FOR JUNE 8, 2017
9th March, 2017
BUDGET AT A GLANCE
This is a Budget that puts stability first, ensuring we keep our economy strong as we leave the European Union.
It ensures young people can get the skills they need to do the high-paid, high-skilled jobs of the future, whilst ensuring more children have the chance to go to a good or outstanding school;
It helps ordinary working families with the cost of living, and supports the NHS and our elderly by providing substantial funding for the social care system;
It invests further in cutting-edge technology and innovation, so Britain continues to be at the forefront of the global technology revolution;
And it redoubles our commitment to a strong economy, laying the foundations of a stronger, fairer, more highly-skilled global Britain outside the EU – a country that works for everyone.
Key OBR forecasts:
The UK economy is forecast to grow by 2 per cent in 2017, up from 1.4 per cent forecast in November.
Real wages are forecast to rise in every year to 2020-21.
The deficit is forecast to fall to 2.6 per cent of GDP in 2016-17, and to 0.7 per cent in 2020-21 – the lowest in over two decades.
Debt as a proportion of national income is forecast to begin falling in 2018-19 – the first fall since 2001-02.
Keeping our economy strong – preparing for our future outside the EU
Continuing to get public spending under control.
Britain has a debt of nearly £1.7 trillion – almost £62,000 for every household in the country. Each year, we are spending £50 billion on debt interest – more than we spend on defence and policing combined. So the only responsible course of action is to continue with our plan to get the country back to living within its means.
This Budget makes progress towards eliminating the deficit. As part of our balanced approach, we will retain flexibility within our fiscal rules to ensure our economic resilience and continue to meet our unshakeable commitment to invest in Britain’s future.
Making Britain the best place in the world to do business.
In the last year of the last Labour government, Corporation Tax was 28 per cent. Today it’s 20 per cent, and it will fall to 17 per cent by 2020 – sending the clearest possible signal that Britain is open for business.
We have listened to the concerns raised by business about the effects of the business rates revaluation. The Government has already committed to a £6.7 billion package to cut business rates, and £3.6 billion in transitional relief.
But we will go further with a £435 million package, meaning businesses coming out of Small Business Relief will have their increases capped at £50 per month in 2017-18; all pubs with a Rateable Value of under £100,000 – 90 per cent of all pubs – will see a £1,000 discount on their 2017 Business Rates bill; and local authorities will receive a further £300 million to target individual hard cases in their areas.
Making sure everyone pays their fair share of tax.
Since 2010, we have secured £140 billion in additional tax revenue by taking bold action to tackle avoidance, evasion and non-compliance.
In this Budget we go further, with measures that will raise an extra £820 million by 2021 by stopping businesses reducing their tax bill by converting capital losses to trading losses; shutting down abuse of foreign pension schemes; and introducing a tough penalty for professionals who enable a tax avoidance arrangement later defeated by HMRC.
Key political point:
Labour can’t control the public finances and would crash the economy like they did last time. They want to spend an extra £500 billion, and the former Labour Shadow Chancellor said you’d have to double income tax, national insurance, council tax and VAT to pay for it. They can’t be trusted to secure our economic future, and it’s ordinary families who would pay for their incompetence.
Ensuring people have the skills they need to succeed in a global Britain
Investing in technical education.
Today we announce the most ambitious post-16 education reforms since A-levels were introduced 70 years ago. We will provide funding to increase the number of training hours for 16-19 year old further education students by over 50 per cent, with 15 new technical routes and a high-quality work placement for every student.
Once this programme is fully rolled out, we will be investing an additional £500 million a year in our 16-19 year olds, giving them the technical skills they need to succeed in the world of work, and giving businesses the edge they need to compete in a new, global Britain.
Giving more children the chance to go to a good or outstanding school.
We are investing more than ever before in our schools, and there are 1.8 million more children taught in good or outstanding schools than in 2010.
This Budget announces funding for a further 110 new free schools, on top of the current commitment of 500, alongside an additional £216 million over the next three years to look after our existing schools, taking total investment in school condition to well over £10 billion in this Parliament.
And we are doing more for the most disadvantaged. This year alone, the pupil premium will be worth £2.5 billion to support pupils from disadvantaged backgrounds. This Budget will further help the most disadvantaged pupils access the best schools by extending free transport to every child entitled to a free school meal to selective schools.
Supporting lifelong learning.
We know the importance of lifelong learning. So we’ll invest up to £40 million to help adults re-train and up-skill throughout their lives, building on our plan to deliver a fairer and more productive Britain that works for everybody.
Key political point:
There was a decrease of 100,000 school places between 2004 and 2010 and under Labour youth unemployment rose by 45 per cent. The technical education system we inherited from Labour was a mess. Now they want to shut grammar schools and abolish academies – taking control away from parents, power from teachers and stopping good schools from opening.
Supporting ordinary working families in their aspirations for a better life for themselves and their children
Supporting our NHS and making sure everyone has dignity in old age.
We are the party of the NHS, with the commitment, the will and the economic plan that will deliver a sustainable future for our most important public service.
Our social care system cares for over a million people, and this in turn puts pressure on the NHS. That is why the Government has already delivered more than £7 billion extra spending power to the system over the next three years, and is ensuring local authorities work more closely with the NHS.
But this Budget goes further, committing additional grant funding of £2 billion to social care in England over the next three years, and £400 million between Scotland, Wales and Northern Ireland, with new measures to support more joined-up working in the worst-performing authorities. Alongside that, we’ll make a further £100 million available immediately for up to 100 new triage projects at A&E in English hospitals in time for next winter.
This will provide immediate benefit to our NHS, and stands alongside our commitment to deliver a £10 billion real terms increase in annual NHS finding by 2020.
Helping working families with the cost of living.
Last year we delivered a pay rise to a million of the lowest paid with the National Living Wage, which will rise again to £7.50 in April – an income boost of over £500 for a full time worker this year.
The personal allowance will rise for the seventh year in a row, benefitting 29 million people and meaning a typical basic rate taxpayer will pay a full £1,000 less income tax than in 2010. The higher rate threshold will rise to £45,000, and savers will have access to the new NS&I bond announced at the Autumn Statement. And the Universal Credit taper rate will be reduced from 65 per cent to 63 per cent – a tax cut for 3 million families on low incomes.
And we will do more to help families with the cost of childcare. With the roll-out of our Tax-Free Childcare policy and the doubling of free childcare for working parents with three or four year olds, a young family with a three year old and both parents working will receive free childcare worth around £5,000 a year from September.
Protecting consumers when markets fail.
A well-functioning market economy is the best way to deliver prosperity and security for working families. But sometimes markets can fail people.
So we will bring forward a Consumers and Markets green paper, to tackle some of the frustrations that sometimes make it feel that the dice are loaded against people going about their everyday lives. We’ll also legislate to protect consumers from unexpected payments when a subscription is renewed or a free trial ends, require clearer terms and conditions, and ensure rail passengers can find the correct ticket at the lowest price.
Delivering a strong economy which supports more jobs and higher living standards.
We want to build an economy that works for everybody – every region of our country and every section of our society. We can only achieve rising living standards and deliver investment in our vital public services if we have a strong economy.
And we start from a strong base – real wages have grown for 27 straight months, unemployment is at an 11 year low and the employment rate is at a new all-time high.
But there is no room for complacency. As we prepare for our future outside the EU, we must focus relentlessly on the need to keep Britain at the cutting edge of the global economy, so we can support public services and make sure everyone has the support they need to provide for themselves and their family.
Key political point:
Labour’s incompetence would crash the economy and hit ordinary working people hard. They’re promising £500 billion worth of spending with money we simply don’t have – and that would be paid for by more borrowing and higher taxes on ordinary working families.
They left us with the biggest budget deficit in peacetime history – and 2.5 million people unemployed. They still haven’t learnt their lesson and cannot be trusted to deliver the strong economy our country needs, meaning we couldn’t pay for important public services like the NHS. Ordinary working families would pay the price for their financial incompetence.
Investing in cutting edge technology, infrastructure and innovation
Backing research and development to boost productivity.
The only way to sustainably improve living standards across this country is to improve our productivity performance – currently 35 per cent behind Germany. Higher productivity means an economy that offers better jobs, with better pay.
Backing research and development is key to boosting productivity, so we are announcing £270 million to ensure that Britain remains at the forefront of technological advancement, supporting cutting-edge research in Artificial Intelligence and robotic systems, battery technology and electric vehicles. And we’re allocating £290 million to support new PhD places, focused on STEM subjects.
Building world-class digital infrastructure.
To support the innovative technologies and compete in a global economy, we need to ensure our digital infrastructure is fit for purpose. That’s why we are taking the first steps to establish a National 5G Innovation Network, providing £16 million for UK research institutions to cooperate on a new 5G facility.
We’ll also support locally-led projects to roll full-fibre with an additional £200 million fund, so people have access to the fastest and most reliable broadband and businesses can compete and grow in a modern economy.
Investing in local transport networks to tackle barriers to local growth.
At the Autumn Statement we announced £2.6 billion new investment in transport. Today we publish allocations from a £220 million fund to tackle specific pinch-points on the national road network.
And because we know local areas understand the barriers to local growth, we’ll allocate £690 million to local authorities to ease urban congestion – including £90 million for the North and £23 million for the Midlands – bolstering the regions and supporting a stronger economy that offers better jobs with better pay.
Key political point:
When Labour left office our infrastructure was ranked 33rd across the world, behind countries like Namibia and Slovenia, now thanks to steps this Government has taken we’re now ranked 7th in the world. This Budget invests in innovation so we can compete with the best, seize the opportunities that lie ahead and create the high-paid, high-skilled jobs of the future.
19th August, 2016
General Economic Brief
• Over the past six years, we have made progress towards bringing our country together. As a One Nation Conservative Government we have stabilised the economy, reduced the deficit, helped more people into work than ever before and have taken people on the lowest wages out of income tax altogether.
• But there is much more to do. If you’re from an ordinary family, life is harder than many people in politics realise. You have a job but you don’t always have job security. You have your own home, but you worry about paying the mortgage. You can just about manage, but you worry about the cost of living and getting your kids into a good school.
• And that is why we will build an economy that works for everyone, so we don’t just maintain economic confidence and steer the country through challenging times, but we make sure that everyone can share in the country’s wealth.
• On Labour: Labour are too divided, incompetent and dangerous to build a country that works for everyone – and ordinary families would pay the price. They are a risk to our economy, because they want to spend, borrow and tax even more than they did last time. Labour cannot make a success of leaving the EU because they are too incompetent and don’t believe Britain can thrive outside it and they are too divided as a party to bring our country together. Labour can’t and won’t build a better Britain for you and your family.
Key economic statistics:
• GDP growth: 0.5 per cent in Q2 2016. Growth in Q1 2016 was 0.4 per cent.
• Borrowing: £7.8 billion in June 2016. This was a £2.2 billion improvement on June 2015.
• CPI inflation: 0.6 per cent in July 2016. CPI inflation in June 2016 was 0.5 per cent.
• Employment up 606,000 on the year. There are now 31.75 million people in work.
• Unemployment down 207,000 on the year. There are 1.64 million people unemployed.
Key economic story:
Recent figures show that in the three months to June a record 31.75 million people were in work, as the unemployment rate remains at a 10 year low of 4.9 per cent.
These record-breaking figures show that in the three months to June there were more people in work than ever before, which is great news as we build a Britain that works for everybody not just the privileged few.
We’re in a position of strength, but we can’t be complacent which is why we’re pressing ahead with our welfare reforms like Universal Credit to ensure it always pays for people to be in work.
The job now is to build on this success story so that everybody can benefit from the opportunities that are being created regardless of their background.
Recent economic events
• The value of Britain’s human capital has risen nearly five per cent – surpassing its pre-recession peak. The value of employed human capital – the knowledge, skills, competencies and attributes of people that facilitate the creation of personal, social and economic well-being – in the UK was £19.23 trillion in 2015 – an increase of £0.89 trillion (4.8 per cent) from 2014 – surpassing its pre-economic downturn peak for the first time (ONS, Human capital estimates: 2015, 18 August 2016).
• National Balance Sheet shows 6 per cent increase in the UK’s wealth. The total net worth of the UK was estimated at £8.8 trillion at the end of 2015 an increase of 6 per cent (£493 billion) compared with the end of 2014. This was equivalent to an average of £135,000 per person or £327,000 per household (ONS, The UK national balance sheet: 2016 estimates, 18 August 2016).
• Retail sales increase post EU referendum while prices fall. In July 2016, retail sales increased by 5.9 per cent compared with July 2015. All sectors showed growth with the main contribution coming from non-food stores. At the same time average store prices fell by 2 per cent and the amount spent online increased 16.7 per cent (ONS, Retail sales in Great Britain: July 2016, 18 August 2016).
• A Canadian company has bought a Cornish tin mine valued at an estimated £100 million, having been shut for nearly two decades. Strongbow Exploration say that it would be part of a renaissance in UK mining. International entrepreneurs, emboldened by the commodities boom of the past decade, have reappraised half-forgotten UK projects in light of better prices and new technology (Financial Times, 16 August 2016).
• The world’s largest offshore windfarm, the Hornsea Project Two in the Humber, received approval. The project is being developed by Denmark’s Dong Energy and is expected to create up to 1,960 construction jobs and 580 operational and maintenance positions (Financial Times, 16 August 2016).
• Wages are still increasing faster than prices – good news for hardworking people. Consumer Price Inflation (CPI) in July was 0.6 per cent, while the most recent figures show average way grow is at 2.3 per cent (ONS, Consumer price inflation: July 2016, 16 August 2016, link; ONS, Labour Market Statistics, 17 August 2016).
• Cutting the deficit by two thirds. Between 2009/10 and 2016/17, public sector net borrowing is forecast to fall from 10.1 per cent of GDP – the highest since records began in 1948 – to 2.9 per cent. Borrowing has been falling since its peak in March 2010 in part due to greater efficiency savings and confidence in our long-term economic plan (OBR, Public finances databank, 27 July 2016).
• Employment is up by over 2.7 million since Labour were in power – meaning well over 1,000 jobs have been created on average every day. That’s over 2.7 million more people with the security of bringing home a regular pay packet. In the three months to April 2010, there were 29.048 million people in employment. In the three months to June 2016 there were 31.75 million people in work (ONS, Labour Market Statistics, 17 August 2016).
• Labour left Britain with a record deficit. At 10.1 per cent of GDP, public sector borrowing was at its highest since records began in 1948 (OBR, Public finances databank, 27 July 2016).
• Labour would keep borrowing for ever – they want to ‘break the narrative’ about savings to balance the books. Asked on the BBC where he’d make savings to balance the books under his new fiscal rule, the Shadow Chancellor John McDonnell said ‘We have got to break this narrative’ (BBC News, 17 March 2016).
August 8, 2016
Shale Gas Extraction
On 8 August 2016, the Government announced the consultation on the Shale Wealth Fund will seek views on proposals to share proceeds from shale revenues directly with households.
• We will be always be driven by the interests of the many – ordinary families for whom life is harder than many people in politics realise. As the Prime Minister said, when we take the big calls, we will think not of the powerful, but of you.
• This announcement is an example of putting those principles into action. It is about making sure people personally benefit from decisions that are taken – not just councils – and putting them back in control over their lives.
• We will be looking at applying this approach to other government programmes in the future too, as we press on with the work of building a country that works for everyone.
We are doing this by:
• Consulting on the government’s priorities for the Shale Wealth Fund. Communities could receive up to 10 per cent of tax revenues derived from shale exploration in their area to spend on priorities such as local infrastructure and skills training. The new fund could deliver up to £10 million per eligible community.
• Opening up the funding for local residents. The Shale Wealth Fund was previously expected to share proceeds from shale revenues only with community trusts and local authorities. It has been changed by the Prime Minister to include the option of money being paid directly to local residents in host areas.
• Deciding how funds are spent, and how any process should be administered. We are looking at whether this fund can be a model for other community benefit schemes with the aim of putting more control and more resource in the hands of local households.
Key point:
• Shale gas will help to move the UK to a low-carbon economy and has the potential to create 64,500 jobs in the industry and its supply chain.
This Fund aims to spread the benefits of shale gas and will include options to give more of the proceeds to local residents than previously planned, after the new Prime Minister changed the plans as part of her drive to deliver an economy that works for all.
Q: Is this just a way to override communities’ concerns about shale gas extraction?
No. Local communities will be involved throughout the process. We need a system that delivers timely planning decisions and makes sure that the benefits of local developments are felt locally. This announcement is an example of putting that into action.
Q: Is this an attempt to override the local planning process?
Local planners will continue to be involved throughout the planning process. Planners can, of course, refuse permission if they think a site would have a significant impact.
Energy: Keeping the lights on and securing supply
Securing our energy supply
• Local energy production is up as energy imports fall – so that we’re less dependent on imported energy. UK based energy production rose by 9.6 per cent, its first increase since 1999, as output of oil and gas from the UK Continental Shelf were both up. Low carbon sources including nuclear, wind, solar photovoltaics and bioenergy all grew strongly. Coal output was down to a record low level (DBEIS, Digest of UK Energy Statistics 2016, 28 July 2016).
• We are delivering more energy from renewables – providing low carbon electricity on the scale that we need. In 2015, a record 24.7 per cent of the UK’s electricity was generated from renewable sources, up from 6.8 per cent in 2010 (DECC, Energy Trends Section 6: Renewables, March 2016).
• We are supporting renewable technologies – securing the future of clean energy in the UK. In 2015, the UK saw the strongest investment in renewable energy in Europe. Investment increased by 24 per cent, while Germany and France cut investment by 42 per cent and 53 per cent respectively (Bloomberg, New Energy Finance, 14 January 2016).
• We have taking steps to make sure that the shale gas industry has the right conditions to succeed. Home-grown gas can secure our energy future in a time when our traditional sources are in decline and we are seeking to move away from expensive foreign imports. It can provide jobs for our people and tax revenues for our society, while we move away from coal to lower-carbon energy sources (DECC, Speech to Shale World Conference, 25 May 2016).
Modernising our energy market
• Ending coal-fired power stations without carbon capture and storage, making the UK the first developed country to replace coal with gas. One of the greatest and most cost-effective contributions we can make to emission reductions in electricity is replacing coal fired power stations with gas – we’ll consult on when proposals to close unabated coal-fired power by 2025 – and restrict its use from 2023 (DECC press release, 18 November 2015).
• Implementing the National Infrastructure Commission’s energy study to save consumer £8 billion a year. The Government will implement the commission’s recommendations, and will work with Ofgem to remove regulatory and policy barriers, positioning the UK to become a world leader in flexibility and smart technologies, including electricity storage (HM Treasury, Budget 2016, 16 March 2016).
• Modernising Feed-in Tariffs (FiTs) to offer better value for money for bill payers. The Government has budgeted £500 million for FiTs during the course of this Parliament. The new scheme would provide better value for money for the consumer rather than the generator (DECC, Review of the Feed-in Tariffs Scheme, 17 December 2015).
• Investing in energy infrastructure to make Britain more independent and ensure we can keep the lights on in the future. Energy is the backbone of a successful economy, allowing other infrastructure networks to function and generating more growth and jobs. We have allocated £275 billion for 77 energy projects in the 2014 National Infrastructure Plan, and since 2010 nearly 20GW of new capacity has been created – with over £45 billion of investment secured for electricity infrastructure alone (HMT, National Infrastructure Plan, December 2016).
Energy: Labour’s failures
• Labour left the country needing to spend £100 billion by 2020 just to keep the lights on. Labour’s 13 years of inaction mean that over the next decade, around a fifth of our existing power generating capacity will come off-line. This will cost £100 billion to replace (DECC Press Release, 22 May 2012).
• Labour failed to take the long-term decisions needed to secure our future energy supply. Despite knowing our nuclear plants were ageing it took Labour 11 years to act, leaving us more dependent on fossil fuel imports for energy (Labour, 1997 manifesto, link; Hansard, 27 June 2001, Col. 633, link; DBERR, Nuclear White Paper, January 2008).
• Under Labour the UK became a net importer of gas – which meant higher energy bills for families. Since 2004 the UK has been increasingly dependent on gas produced overseas. The Committee on Climate Change (CCC) says this was the main driver of energy bill increases for hardworking people (House of Commons Library Standard Note, Energy imports and exports, 4 March 2013, p. 11, link; Committee on Climate Change Press Release, 15 December 2011).
• Labour left the UK third from bottom in Europe’s renewable energy league table. In 2010, the UK was the worst major economy in Europe for renewable energy consumption, beating only Malta and Luxembourg (Eurostat Press Release, 18 June 2012).
Labour left a broken energy market
• Labour have opposed our action to fix the market. Labour opposed the Competition and Markets Authority (CMA) inquiry and they said they would scrap OFGEM (Caroline Flint, We need action, not another investigation, into energy bills, January 2015, link; Caroline Flint, Speech to Labour Party Annual Conference 2012, September 2012, link; Daily Telegraph, August 2015).
And they haven’t changed – their plans would mean higher bills
• Labour’s energy policy has been worked out on the back of an envelope. Ann Pettifor, former Labour Parliamentary Candidate and member of the Economic Advisory Council, wants to spend £40 billion on a Green New Deal. ‘I reckon, I just put, you know back of the envelope number £40 billion a year to invest in the Green New Deal’ (Speech to the John McDonnell New Economic Series, Bristol, 4 April 2016)
• £40 billion a year is more than the Ministry of Defence’s entire operating budget. The MoD spent £36.9 billion in its total resource budgets in 2014-15 (MoD, Annual Report and Accounts 2015-16, p.54).
• Labour wants to nationalise the energy industry – putting private investment at risk. Labour’s leader has said he wants to nationalise the gas and electricity industries. Leading City analysts say this could cost £185 billion (Financial Times, 7 August 2015, link; The Guardian, 7 August 2015).
• Labour would introduce more energy industry regulation – pushing up costs for families. Labour’s leader wants to set up a new Energy Commission and extend the roles of Ofgem, National Grid and the Competition and Markets Authority – this would increase regulation, pushing up costs for families and making it even harder for Britain to invest in tackling climate change (Jeremy Corbyn, Protecting Our Planet, August 2015).
July 4, 2016
The Chancellor, George Osborne, has announced plans to slash corporation tax to 15 per cent or below as part of a five-point plan to galvanise the economy post-Brexit.
The Chancellor has announced further steps to become a super-competitive global economy with low business taxes and a global outlook.
It has been possible to cut corporation tax before to boost economic activity and investment in the context of difficult decisions on tax and spending. The Chancellor has also proposed redoubling efforts to build trading links with other parts of the world, leading a trade missing to China later this month, and investment in the Northern Powerhouse and HS2 and HS3 must continue. The Chancellor suggested the Bank of England could take further steps to ease credit conditions, proposed deeper education reform and a quick decision on the location of a new runway in the South East once a new prime minister is appointed.
We must focus on the horizon and the journey ahead, and make the most of the hand we have been dealt.
April 12, 2016
The Prime Minister has given a statement to the House of Commons on the Panama Papers.
The Prime Minister has taken the unprecedented step of publishing his tax return and has been more transparent about his arrangements than any other Prime Minister.
He and his wife did own shares in this unit trust, but before the 2010 election he sold all the stocks and shares he owned to ensure there was no conflict of interest. These were subject to all UK taxes in all the normal ways and he previously paid Income Tax on the dividends. As Graham Aaronson QC, Britain’s leading tax lawyer, has said, it would be ‘quite wrong’ to describe this as tax avoidance – in fact this unit trust was set up at the time to invest in dollar denominated shares, as many other people did at the time. The Prime Minister currently does not own any shares, unit trusts or investments. And he will not benefit from any family trusts in the future.
On the issue of inheritance tax, this government believes that it is a natural instinct for people to wish to pass things to their children – for example, wanting to keep a family home within the family – and it is something that we should proudly support.
We have launched a taskforce to tackle aggressive tax avoidance and evasion after the Panama Papers.
The UK has been at the forefront of international action to tackle the global scourge of aggressive tax avoidance and evasion, and international corruption more broadly, but there is still more to do.
That is why this taskforce will bring together the best of British expertise to deal with any wrongdoing relating to the Panama Papers. The taskforce will continue the work of HMRC experts who have already tracked down £2 billion from offshore tax dodgers since 2010, helping to revolutionise tax transparency and tackle tax avoidance.
This world-class taskforce will report to the Chancellor and the Home Secretary on their strategy for taking action later this year and will enhance our ability to tackle dodging tax.
Labour have admitted that they want to put up tax on the family home.
Labour have revealed their true colours – they are calling for higher taxes on working people’s family homes.
They are clear: if you want to pass on your family home to your children, Labour will tax you for it.
We are delivering on our manifesto commitment to take the family home out of inheritance tax.
August 5, 2016
Hinkley Point
The UK needs a reliable and secure energy supply, and the Government believes that nuclear energy is an important part of the mix.
The Government is going to look at all the component parts of this deal and will make a decision on it in the early autumn.
April 1, 2016
The new National Living Wage comes into force today.
This Government was elected to deliver a higher wage, lower welfare, lower tax country that finally lives within its means – and that’s what we are delivering.
The National Living Wage means that if you’re 25 and over, then from today you’ll earn at least £7.20 an hour, by law. That means 1.3 million lower-paid workers will get a direct pay rise – the biggest jump in a minimum wage in any advanced economy since the financial crisis. The National Living Wage will increase each year, and by 2020 it is forecast to be £9 an hour.
Boosting pay and ensuring that more families have the security of a decent, regular pay packet – and making sure that people are always better off in work – is at the heart of our long-term plan. The new National Living Wage shows who a modern, compassionate Conservative Government is fighting for.
The Business Secretary is visiting the Port Talbot steelworks today.
Workers and their families face a worrying time, and our priority is to help those likely to be affected. During the review process, we remain committed to working with Tata and the unions on a long-term sustainable future for British steel making.
The UK Government has taken clear action, in response to industry asks, to help the steel industry as it suffers from intense economic pressures, with global overproduction and steep slumps in prices. That involves working closely with the industry to ensure it remains a significant presence in UK.
We are working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base.
29 March, 2016
A Resolution Foundation study shows that up to one in three workers in parts of Britain will get a pay rise when the National Living Wage comes into effect on Friday – meaning more hardworking families having the financial security they need to get on in life.
Britain deserves a pay rise. In the last six years we’ve taken the tough choices to drive down our borrowing, make our business taxes competitive and reform welfare.
It’s because we’ve taken difficult decisions that the Chancellor was able to announce a new National Living Wage, compulsory as of 1 April 2016, expected to reach £9 an hour by 2020. This will benefit 6 million workers, and boost pay for those on the Minimum Wage by over £4,700 by 2020.
Tackling low pay is part of our plan to move to a higher wage, lower tax, lower welfare society, building a more productive Britain and giving families the security of well-paid work.
In yet another sign that Labour are a threat to the security of every family, Christine Blower, the hard-left leader of the National Union of Teachers, has joined Labour.
In the past year Labour have confirmed that they are a threat to our national security, our economic security and to the security of every family in Britain.
The Labour leader’s policies to borrow more, print money and put up taxes on people’s jobs and incomes would wreck our economy. That would weaken our nation’s defences, damage our NHS and hurt our country’s working people – with the poorest hit the most. By letting in hard-left activists such as Mark Serwotka and Christine Blower, Labour only confirm the risk they pose to our nation.
Only by continuing to build a stronger economy can we deliver strong defences for our country and stability, security and opportunity for working people.
23 March, 2016
There is continuing coverage of the 2016 Budget – a Budget that puts the next generation first.
The British economy is stronger because we confronted our country’s problems and took the difficult decisions, but we now face the challenge of a dangerous cocktail of global risks. Britain is well prepared to handle this challenge, but only if we act now so we don’t pay later.
We can choose to add to the risk and uncertainty or be a force for stability. We can choose short term fixes and more stimulus or we can lead the world with long-term solutions to long-term problems. In this Budget we choose the long term. Sound public finances to deliver security; lower taxes on business and enterprise to create jobs; reform to improve schools; investment to build homes and infrastructure, and; help for working people with lower taxes and support for saving.
That is the path we followed over the past five years and it has given us one of the strongest economies in the world. It is the path we will follow in the years ahead. In this Budget we redouble our efforts to make Britain fit for the future.
January 19, 2016
There are reports of the Chinese economy slowing, and the effect it may have on other nations around the world.
As the Chancellor warned only very recently, we cannot be complacent over Britain’s economic recovery – a dangerous cocktail of global threats means the financial security of households across the country is at risk unless we stick to our economic plan.
The biggest risk is that people think that it’s ‘job done’. Many in our politics encourage this, irresponsibly suggesting that we can just go back to the bad old ways and spend beyond our means for evermore. We often hear predictable calls for billions of pounds more debt-fuelled public spending and a rejection of all the reforms we propose to deliver better-quality public services for less taxpayers’ money.
Unless we finish the job of fixing the public finances, to get Britain back into the black by finally spending less than we borrow, all of the progress we have made together could still easily be reversed.
And don’t forget – we’re getting on with delivering our manifesto commitments.
At the election, we made clear commitments to the British public – and we have an important responsibility to deliver on them.
We are passing Bills to deliver 30 hours of free childcare, three million new apprenticeships, and an EU referendum. This April, the tax cuts we pledged will start to come into effect, the new National Living Wage will help reward work, and the elderly will get the biggest increase in the state pension for over a decade. And by following our long-term economic plan, we’ve got 2.2 million more people in work since 2010.
But there is still much more to do. So we will continue working hard to deliver our commitments to give people security and opportunity, at every stage of their life.
October 30, 2015
The Chancellor will launch the National Infrastructure Commission and commit to spending £100 billion on infrastructure projects in this Parliament. This will deliver high-quality infrastructure ensuring that Britain is fit for the future.
Infrastructure isn’t some obscure concept – it’s about people’s lives, economic security and the sort of country we want to live in. We are determined to shake Britain out of its inertia on infrastructure and end the situation where we trail our rivals when it comes to building everything from housing to power stations.
That is why, at the Spending Review, we will commit to investing £100 billion in infrastructure projects over the next five years, including full funding for the £15 billion Roads Investment Strategy. We are creating an independent National Infrastructure Commission, headed by Lord Adonis and a world-class group of experts, to give us a long-term, unbiased analysis of the country’s major infrastructure needs.
British people have had to spend longer than they should getting to work, pay more than they should in energy bills and not buy the houses they want because of the failure of successive governments to think long-term. We have to build the infrastructure this country so that we can provide a secure future for our children and grandchildren.
October 22, 2015
The latest Office for National Statistics figures show Government borrowing has fallen £7.5 billion in the current financial year compared to 2014.
At a time when pay is rising strongly, this welcome news shows the benefits of a higher wage economy, with both businesses and working people contributing to balancing the books.
It also shows the work that is still to be done. We have record employment, strong growth and rising wages. Yet we borrowed £9.4 billion this September, since government spending is still unsustainably high.
That’s why we have to continue the hard work of identifying savings and making reforms necessary to build a resilient economy, which is what we’ll do at the upcoming Spending Review.
October 1, 2015
The National Minimum Wage has risen to £6.70 per hour – meaning a pay rise for over a million working people.
As a One Nation Government we are making sure that every part of Britain benefits from our growing economy.
More than 1.4 million of Britain’s lowest-paid workers will be getting a well-deserved pay rise, from £6.50 to £6.70 per hour – the largest real-terms increase since 2007. Apprentices will also see the largest boost to their pay in history, making sure that apprenticeships remain an attractive option for young people.
Giving people the security of a fair wage is part of our plan to build a society with opportunity at its heart; where people know if they work hard, they can really succeed.
October 1, 2015
When we came into Government the country was borrowing over £150 billion a year and unemployment had increased by nearly half a million. Britain had suffered the deepest recession since the war and had the second biggest structural deficit of any advanced economy.
We had to make realistic assessments about the state of the British economy and this involved taking difficult decisions to reduce the deficit and control spending. Thanks to the hard work of the British people, this long-term economic plan is working. The deficit is down by more than half, there are nearly 2.5 million more private sector jobs and there are 760,000 more businesses.
But the job isn’t done: there is more to do and there are risks in the global economy threatening this country. That’s why we are sticking to the long-term economic plan that has got us this far, so we deliver 2 million more jobs, 3 million more apprenticeships and lower taxes for hardworking people – and secure a better future for Britain.
Labour’s inefficient and ineffective spending meant our economy was vulnerable at a time when it should have been strong. Labour hasn’t learned its lesson, and all we see from them is plans for more spending, more borrowing and higher taxes – which is exactly what got us into this mess in the first place.
Key economic statistics:
GDP growth: 0.7 per cent in Q2 2015. Growth in Q1 2015 was 0.4 per cent.1
Borrowing: £12.1 billion in August 2015. This was a £1.4 billion increase on August 2014.2
CPI inflation: 0.0 per cent in August 2015. CPI inflation in July 2015 was 0.1 per cent.3
Employment up 413,000 on the year. There are now 31.09 million people in work.4
Unemployment down 198,000 on the year. There are 1.82 million people unemployed.
New figures from the Office for National Statistics show the UK economy has been the fastest growing major advanced economy for two years in a row.
These new figures show that the UK was the fastest growing major advanced economy in both 2013 and 2014.
Coupled with family income growing by 3.3 per cent in real terms over the last year and the smallest trade deficit since the late 1990s, this is further evidence that our long-term plan to secure the recovery has laid the foundations for a stronger economy.
But we still face risks from the global economy so we should continue working through our long-term plan to build a resilient economy, and a more secure future for working people across Britain.

Recent economic events
The UK services sector has grown by 2.8 per cent over the last year. The Index of Services was 2.8 per cent higher in July 2015 compared to the year before – with growth in all four of the main services sectors (ONS, Index of Services, 30 September 2015, link).
Britain’s trade deficit is the smallest it has been since the 1990s. Our trade deficit is now the smallest it has been since the first three months of 1998, driving a narrowing of the current account deficit to 3.6 per cent (ONS, Balance of Payments, 30 September 2015, link).
New employment statistics showed that pay packets are rising and jobs are being created. The figures showed wages up 2.9 per cent over the year, and with inflation low that means working people have received the fastest real terms rise in over a decade. At 73.5 per cent, the employment rate is the highest it has been (ONS, Labour Market Statistics, 16 September 2015, link).
A new OECD growth forecast predicts the UK will be the joint-fastest growing major advanced economy this year. The new OECD forecast predicts the UK will grow at 2.4 per cent this year. This would mean no major advanced economy has grown faster than Britain for a second year in a row (OECD Interim Economic Outlook, 16 September 2015).
A record number of people purchased homes in June using the government’s Help to Buy schemes. Nearly 120,000 people have now been helped to buy a home through the Help to Buy schemes. 80 per cent of those helped have been first time buyers, and 95 per cent have been outside of London. There will be further help for people aspiring to own their own home from 1 December, when new Help to Buy ISAs will launch, with six major lenders already signed up to provide them (HM Treasury press release, 9 September 2015, link).
We have cut the deficit by more than half. Between 2009-10 and 2014-15, public sector net borrowing fell from 10.2 per cent of GDP to 4.9 per cent. This is due, in part, to the £18.6 billion of savings through efficiency and reform, as well as tackling fraud, error and uncollected debt in the last financial year – a 30 per cent increase on 2013-14. (ONS, Public Sector Finances June 2015, 21 July 2015, link; Cabinet Office, 13 August 2015, link).
Employment is up by over 2 million since Labour were in power – meaning over a 1,000 jobs have been created on average every day. That’s over 2 million more people with the security of bringing home a regular pay packet. In the three months to April 2010, there were 29.048 million people in employment. In the three months to June 2015 there were 31.09 million people in work (ONS, Labour Market Statistics, 16 September 2015, link).
Businesses have created almost 2.5 million new jobs. The private sector has created over 5 jobs for every 1 lost in the public sector since 2010 (ONS, MFZ2, 16 September 2015, link).
What Labour did
Labour left Britain with a record deficit. At 10.2 per cent of GDP, public sector borrowing was at its highest since records began in 1948 (OBR, Public finances databank, 8 July 2015, link).
Labour think you can borrow less by borrowing more. Britain’s top business group – the CBI – has said more borrowing would ‘spook the market’. This would lead to soaring mortgages rates – hitting hardworking families (John Cridland, Sky News, 11 March 2013).

September 25, 2015
The Labour Conference shows Labour is a risk to our economic security
· Borrowing forever with a permanent budget deficit. ‘Labour should not run a current budget deficit – but we should borrow to invest in our future prosperity’ (Jeremy Corbyn, The Economy in 2020, 22 July 2015, p. 4).
· Higher taxes on businesses to cut the deficit – cutting ‘subsidies’, or tax reliefs that help manufacturers invest in new machinery. ‘We accept that cuts in public spending will help eliminate the deficit…Our cuts will be…to the £93bn in subsidies to corporations’ (John McDonnell, The Guardian, 11 August 2015).
· Print money to pay for more spending – ending Bank of England independence. A joint letter, signed by John McDonnell and Jeremy Corbyn, said: ‘There is an alternative way out of endless austerity. We need public investment to kickstart the economy out of faltering growth and to generate real job creation and rising incomes. It can readily be funded...through printing money (quantitative easing) to be used directly for industrial investment’ (Labour Assembly Against Austerity, 26 January 2015).
· Bank of England Governor Mark Carney said this would hurt the poor and the elderly. ‘The issue would be imperilling potentially the achievement of price stability. The consequence of that of course would be inflationary. The people who tend to get hurt the most by inflation are the poor, the elderly, those that can’t hedge themselves – that’s been the experience throughout history and I’m sure that will be the experience in the future if the Bank of England were not to conduct policy not consistent with achieving its mandate from parliament’ (Mark Carney, The Daily Telegraph, 17 September 2015).
· Opposes all welfare reform, including the benefit cap. In a debate on the Welfare Reform and Work Bill, McDonnell said, ‘I make this clear: I would swim through vomit to vote against the Bill, and listening to some of the nauseating speeches tonight, I think we might have to’ (John McDonnell, Hansard, 20 July 2015, Col. 1314).
September 12, 2015
With the election of Jeremy Corbyn as leader, Labour now poses a risk to our economy’s security
Labour’s leader opposes all spending cuts and would borrow more:
· He believes Labour ‘spent too little’ before the crisis. ‘We made a huge mistake in allowing the Tories to get away with the idea that the last Labour government spent too much. We didn’t, we actually spent too little’ (Nottingham hustings, 28 June 2015). ‘The last Labour government didn’t spend too much, except perhaps on defence’ (Twitter, 6 June 2015, link).
· He would ‘borrow’ more in 2020. ‘if the deficit has been closed by 2020 and the economy is growing, then Labour should not run a current budget deficit – but we should borrow to invest in our future prosperity’ (The Economy in 2020, 22 July 2015, p. 4, link).
· He opposes making any spending cuts to clear the deficit. ‘I think our mistake is… accepting the view that there has to be continuing public spending cuts’ (Nottingham hustings, 28 June 2015). ‘You don’t close the deficit fairly or sustainably through cuts’ (The Economy in 2020, 22 July 2015, p. 4 link).
· Instead, Corbyn would try and clear the structural deficit 100 per cent through tax rises. ‘You don’t close the deficit fairly or sustainably through cuts. You close it through growing a balanced and sustainable economy that works for all. And by asking those with income and wealth to spare to contribute more’ (ibid.).
· Labour’s own analysis says Corbyn’s spending plans would mean £55 billion more spending. ‘An analysis by the Labour Party has suggested other policies such as reversing welfare cuts, opposing further public spending decreases and axing tuition fees will cost £55 billion a year’ (Telegraph, 8 August 2015, link).
· He wants to print money to fund more spending: ‘One option would be for the Bank of England to be given a new mandate to upgrade our economy to invest in new large scale housing, energy, transport and digital projects: Quantitative easing for people instead of banks’ (Jeremy Corbyn, The Economy in 2020, 22 July 2015, p. 6, link).
o This has been attacked by Labour Shadow Chancellor Chris Leslie. He said the policy would ‘hit those on the lowest incomes, the poorest people who couldn’t afford those goods and services’ (Independent, 3 August 2015, link).
o And Yvette Cooper. ‘It’s one thing to use QE to boost liquidity when the economy has crashed. But if you try it when the economy is growing, you push up inflation, destroy confidence in the currency, lose jobs and investment, and create a cost of living crisis too’ (Guardian, 24 August 2015, link).
· He has opposed all welfare savings since 2010. ‘George Osborne’s first action after 2010 was to rush through his “spending review” - the central feature of which was to “cut welfare spending” as rapidly as possible. The results are obvious - lower wages, reduced in-work benefits, the bedroom tax and a draconian approach towards people with disabilities’ (Jeremy Corbyn, Morning Star, 27 March 2014, link). And he opposed our 2015 welfare reforms: ‘I am voting against the Government on the Welfare Bill tonight because I believe it will increase child poverty’ (Jeremy Corbyn Press Release, 20 July 2015).
· He opposes the benefit cap. ‘No, I will not back it…it means the social cleansing of all of central London because of the reductions in the benefit cap’ (GMB LabourLeadership Hustings, 9 June 2015).
Labour are anti-business – threatening investment and jobs
· He opposes free market economics, the foundation of economic prosperity. ‘We have to turn our backs on the principle of the free market economy and start to look at global concerns and the rights of people to a humane life, housing, education, jobs and health’ (Hansard, 16 November 1995, link).
· He supports ‘a planned economy’. ‘There were some serious problems with the way in which Tony Blair and New Labour approached things … [one] was the promotion of markets rather than a planned economy of any level of planning in the economy’ (Newsnight Labour Leadership Hustings, 17 June 2015).
· He would raise taxes on business, putting jobs at risk.
o Higher corporation tax. Jeremy Corbyn has proposed ‘adding 2 per cent to corporation tax’ to fund ‘a lifelong learning service’ (Labourlist, 27 July 2015, link). He has also suggested ‘increasing corporation tax to 20.5 per cent to fund maintenance grants’ (Jeremy Corbyn Press Release, 16 July 2015, link). So under Corbyn, businesses could immediately face a 4.5 per cent tax rise.
o Ending business tax reliefs – a tax rise on business. ‘Another option would be to strip out some of the huge tax reliefs and subsidies on offer to the corporate sector. These amount to £93 billion a year’ (Jeremy Corbyn, The Economy in 2020, 22 July 2015, link).
· He would risk investment by nationalising key industries with ‘no compensation’. John McDonnell – tipped to be Shadow Chancellor under Corbyn – said this could involve offering ‘no compensation’ to the businesses involved (John McDonnell, Guardian, 22 August 2015, link).
o ‘Now is the time, more than ever, to call for public ownership and control of the banking system and financial service industries’ (Jeremy Corbyn, Morning Star, 5 July 2012, link).
o ‘I would want the public ownership of the gas and the National Grid . . . [and] I would personally wish that the big six were under public control, or public ownership in some form’ (Jeremy Corbyn, Financial Times, 7 August 2015, link).
o ‘A Labour government under this leadership would introduce a new Railways Act in 2020 to progressively bring the railways back into public control’ (Jeremy Corbyn, A People’s Railway, August 2015, link).
4 September, 2015
General Economic Brief
• When we came into Government the country was borrowing over £150 billion a year and unemployment had increased by nearly half a million. Britain had suffered the deepest recession since the war and had the second biggest structural deficit of any advanced economy.
• We had to make realistic assessments about the state of the British economy and this involved taking difficult decisions to reduce the deficit and control spending. Thanks to the hard work of the British people, this long-term economic plan is working. The deficit is down by more than half, there are over 2.4 million more private sector jobs and there are 760,000 more businesses.
• But the job isn’t done: there is more to do and there are risks in the global economy threatening this country. That’s why we are sticking to the long-term economic plan that has got us this far, so we deliver 2 million more jobs, 3 million more apprenticeships and lower taxes for hardworking people – and secure a better future for Britain.
• Labour’s inefficient and ineffective spending meant our economy was vulnerable at a time when it should have been strong. Labour hasn’t learned its lesson, and all we see from them is plans for more spending, more borrowing and higher taxes – which is exactly what got us into this mess in the first place.
Now, we have
• GDP growth: 0.7 per cent in Q2 2015. Growth in Q1 2015 was 0.4 per cent.
• Borrowing: -£1.3 billion in July 2015. £1.4 billion turnaround on July 2014.
• CPI inflation: 0.1 per cent in July 2015. CPI inflation in June 2015 was 0.0 per cent.
• Employment up 354,000 on the year. There are now 31.03 million people in work.
• Unemployment down 221,000 on the year. There are 1.85 million people unemployed.
A growing economy means more businesses, creating more good jobs – which means more families with the security of a regular pay packet. With Britain growing faster than any other major advanced economy, and wages rising at the fastest rate since 2007, it’s clear our plan is delivering security for families across Britain.
There are clear risks in the world economy from the Eurozone and what is happening in the world’s stock markets – so it’s vital we stay on the road we have set out on, and keep delivering on the long-term economic plan that has been securing a brighter future for working people across the country.
Recent economic events
• Construction output grew by 2.6 per cent in the year to June. With estimated growth of 2.4 per cent in the June quarter driven by all new construction, overall growth since June 2014 was 2.6 per cent
• The Government has sold part of the Royal Bank of Scotland (RBS), raising £2.1 billion to pay down the national debt. Following advice from UK Financial Investments that it would be appropriate to make the first sale of the government’s stake in RBS 5.4 per cent of the bank has been sold - raising £2.1 billion which will be used to pay down the national debt. This is an important first step in returning RBS to the private sector
The services sector grew by 2.7 per cent in the year to May. There was growth in all the four main areas of the sector – with the largest contributions to growth coming from business services and finance, and distribution, hotels and restaurants
• Retail sales grew for the 28th month in a row in July. Retail sales were up 4.2 per cent in July compared to the year before – in the longest period of consecutive year-on-year growth since May 2008
• Wages have continued to rise over the last year. Average pay growth is at 2.8 per cent, while inflation over the same period was flat.
• UK business confidence has grown – with more firms intending to hire and invest. A Markit survey found UK business confidence at its highest level for a year. The proportion of firms expecting to hire new employees also increased, with the strongest growth in the construction industry. It also found that as a result of greater confidence firms were raising plans to invest in capital equipment and R&D
Fair Pay
On 2 September 2015, the Prime Minister set out measures to ensure people receive fair pay – including stronger penalties and enforcement of the new National Living Wage and National Minimum Wage.
• By returning the Conservatives to government with a majority, the British people gave us a clear instruction: to continue on the path of recovery. As Parliament returns we will continue to deliver on our long-term economic plan that is putting our economy on a stable footing.
• Our National Living Wage will give low-paid workers an extra £20 a week when it is introduced in April. However, we know that this needs to be properly enforced, which is why we are announcing that we will double the fine on firms for non-payment of the minimum wage. We will also ensure that employers found guilty of non-compliance will be considered for disqualification from being a company director for up to 15 years.
• Our National Living Wage will help hardworking people by transforming a low-pay, high-tax, high-welfare society into one with higher pay, lower taxes and less reliance on welfare. This will restore the link between hard work and reward – a core part of our One Nation approach to Government.
We are doing this by:
• Introducing a new National Living Wage (NLW). The NLW will be mandatory for workers aged 25 and above, and initially set at £7.20 – giving low-paid workers an extra £20 a week. We will ask the Low Pay Commission to recommend the level every subsequent year, asking them to make NLW 60 per cent of median earnings by 2020. On OBR forecasts we would expect the NLW to reach a level of over £9 by 2020.
• Stronger enforcement and penalties of the new NLW and the NMW. We are doubling the penalties for non-payment of the NLW and NMW to 200 per cent of the arrears owed to under-paid employees, up to a maximum of £20,000. There will also be an increased budget for enforcement, and a new dedicated team to tackle the most serious cases. In addition anyone found to have failed to pay the proper wage will be considered for disqualification from being a company director for up to 15 years.
The current level of welfare is not affordable – we’ve still got a situation where nearly six out of ten families with children are eligible for tax credits. This is about moving from a low-pay, high-tax, high-welfare society to one with higher pay, lower taxes and less reliance on welfare. Taken together with all the welfare savings and tax cuts, a typical family with someone working full-time on the minimum wage will be better off.
Zero-hours contracts
On 2 September 2015 the ONS published statistics on the number of zero-hours contracts.
• Zero-hours contracts account for fewer than 1 in 40 jobs in our economy and this Government has already banned abusive ones. In contrast, Labour presided over zero-hours contracts with no safeguards for three terms and 13 years while they were in power. Tony Blair even promised to ban them entirely as far as back as 1995 and then did nothing.
• The fact is that zero-hours contracts have a part to play in a modern, flexible labour market, particularly when the individual cannot commit to regular hours. But most new jobs - three quarters of those created since 2010 - are full time. These are families across the country getting into work with the security of a regular pay packet.
• We’ve achieved this because we have a long-term economic plan and taken difficult decisions to sort out the economic chaos we inherited from Labour. All Labour would do is borrow more, spend more and tax more – wrecking the recovery and taking us back to square one.
• Exclusivity contracts banned. These prevent an individual from working for another employer, even when no work is guaranteed. This undermined choice and flexibility, which is why we have banned them.
• 2.4 per cent of workers on zero-hours contracts. Between April and June 2015, 744,000 people reported they were on zero-hours contracts in their main employment, 2.4 per cent of people in work.
• Three-quarters of the rise in employment since 2010 has been in full-time jobs. The number of people working full-time has risen by 1.54 million since Labour were in power.
• Labour have admitted that zero-hours contracts can be useful. Shadow Business Secretary Chuka Umunna has said that ‘sometimes people quite like to use them’.
• People on zero-hours contracts work 25 hours a week on average. According to the ONS, the average usual hours worked by someone on a zero-hours contact is 25.1 hours.
Labour did nothing about these contracts when in power, and Labour local authorities have continued to use them. This Government which has tackled abuses, and fewer than 1 in 40 workers are on zero-hours contracts. The real risk to workers security would be adopting Labour’s plans for more spending, more borrowing and higher taxes – exactly what got us into a mess before.
29 August, 2015
The Government is set to announce a new review to improve the effectiveness of rules designed to prevent money laundering and terrorist financing, as part of our Cutting Red Tape review programme.
The UK is a global financial centre and home to some of the most successful international financial services firms in the world. But in order to protect the stability of our world leading financial centre, we need an effective anti-money laundering and counter terrorist finance regime.
That’s why we are leading from the front by launching a review to make sure the rules we have to protect our strong financial industry from abuse are not unintentionally holding back new and existing British business. We want firms to come forward and tell us where regulation is unclear or its enforcement ineffective.
25 August, 2015
The Home Office today announces a new package of measures to crack down on illegal working by migrants.
Anyone who thinks the UK is a soft touch should be in no doubt – if you are here illegally, we will take action to stop you working, renting a flat, opening a bank account or driving a car.
Through our new Immigration Bill, illegal workers will face the prospect of a prison term and rogue employers could have their businesses closed, have their licenses removed, or face prosecution if they continue to flout the law.
As a one nation government we will continue to crack down to abuse and build an immigration system that works in the best interests of the British people and those who play by the rules.
June 4, 2015
OECD Forecast
Today’s OECD forecasts shows that our plan is working, with Britain keeping our place at the head of the pack as the fastest growing major economy in both 2014 and 2015. The deficit is less than half what it was, but at just under 5 per cent it is still one of the highest in the OECD.
We set out a plan to deal with it at the Budget, with £30 billion of savings by 2017-18, and we will deliver it this summer and in the spending review. We’ve learnt there’s no shortcut to dealing with the deficit, so we have to roll up our sleeves and get on with the hard work of returning the public finances to surplus. That’s why we have already made a start by asking departments to identify further savings this year, because the more you can do early, the better.
But the job is not done - there is still more to do and there are risks in the global economy. That is why we need to keep working through our long-term economic plan. Reducing the deficit is the only responsible way to build a healthier economy, and secure a better and brighter future for Britain and future generations.
Crossrail
After working underground for three years, Crossrail engineers have completed 26 miles of tunnel. It means that from 2019, central London will be connected to Reading and Essex in what will be the biggest boost to rail capacity since the Second World War.
Crossrail is an incredible feat of engineering that will help to improve the lives of working people in London and beyond. The project is a vital part of our long term plan to build a more resilient economy by helping businesses to grow, compete and create jobs right along the supply chain.
This isn’t just going to be a boost for commuters. It’s a boost for skills – Crossrail has already created 450 apprenticeships. It’s about the jobs it is creating – an estimated 55,000 during construction alone. It’s about the businesses it will bring to the area.
Projects like Crossrail are fundamental to this Government’s philosophy. It’s why we’re spending more on railways than at any point since the Victorians and more on roads than we have in a generation. And we’ve only been able to do so because we’ve been taking the difficult decisions on our economy and are getting our public finances in order.
June 1, 2015
Making the Midlands an engine of growth
The Chancellor is visiting the Midlands today to set out the next steps in making the Midlands an engine for growth in our country.
This One Nation Government will back the working people of the Midlands at every stage of their lives. Our plan to rebalance the whole of the UK economy involves making the Midlands an engine of growth.
We will support its key strengths in manufacturing, science and energy and we will make major investments to improve transport connections and improve skills to prioritise working people at every stage of their lives.
By creating jobs and allowing people to keep more of the money they earn, we will ensure the Midlands shares in a truly national recovery.
