Spring Statement shows a solid foundation on which to build Britain’s economic future

Lewisham East Chair Helena Croft has hailed the UK’s public finances as reaching a ‘turning point’ following the Chancellor’s Spring Statement, with the independent economic outlook showing a ‘solid foundation on which to build Britain’s economic future’.

Yesterday, the Chancellor said the outlook shows that:

• Wages will rise faster than previously expected, with wages growing faster than prices in each year and reaching 3.3 per cent growth in 2023. 

• Employment will continue to rise, with 600,000 more jobs by 2023.

• The economy will continue to grow at 1.2 per cent this year, faster than Germany.

• The deficit will be £3 billion lower than expected this year, down to 1.1 per cent of GDP from almost 10 per cent under Labour.

• Debt on a sustained downward path for the first time in a generation.

The Chancellor also set out the Conservative Party’s priorities for Britain, announcing several new measures to ensure the economy continues to work for everyone:

1. An economy fit for the future, investing in the infrastructure, skills and the new technologies which will shape the global economy. We are investing to cement our position as a destination for new tech, enabling passengers to have the option of ‘zero carbon travel’, investing in transport projects across the country and rolling out fibre broadband to nine more local authority areas.

2. Supporting families after a decade of fixing the economy. Getting this to this point wasn’t easy, and families have felt the squeeze, so a new £3 billion Affordable Homes Guarantee scheme will deliver around 30,000 affordable homes. We are also boosting wages and cutting taxes and tackling period poverty.

3. Supporting our public services because our balanced approach to the economy is working. This includes tackling knife crime with £100 million of new funding and building world-class public services by increasing spending by above inflation from 2020.

4. Making sure we leave the economy and our planet in a better state than we found it through staying at the cutting edge of Clean Growth, leading the world to enhance biodiversity and reducing our dependency on natural gas by increasing the proportion of green gas in our system.

Chair of East Lewisham Conservatives, Helena Croft said:

“The UK public finances have reached a turning point. I am delighted that our economy will continue to grow at a faster rate than Germany, with the jobs market continuing to thrive.

“This is a solid foundation on which to build Britain’s economic future post-Brexit, with support for our world-class public services able to go up.

“Labour opposed all the decisions we took to get the economy back on track. They now want one thousand billion pounds of extra borrowing and taxes, which would send debt spiralling. We should never let them take us back to square one.”

Notes

Economy and public finances

• Wages will rise faster than previously expected. The OBR have revised up wage growth in every year to 2023, with wages growing faster than prices in each year and reaching a record high rate of 3.3 per cent growth in 2023. 

• Employment will continue to rise. The OBR expect to see 600,000 more jobs by 2023, meaning that compared with 2010, there will be 4.1 million more people in work by 2023.

• The economy will grow in every year. The OBR expect the economy to grow at 1.2 per cent this year, faster than Germany, accelerating to 1.4 per cent in 2020 and to 1.6 per cent in each of the final three years.

• The deficit has been revised down in each of the next five years. The deficit will be £3 billion lower than expected this year, down to 1.1 per cent of GDP from almost 10 per cent under Labour.

• National debt has also been revised down in every year. Debt has been revised down in every year and is set to fall as a share of GDP in every year, from 82.2 per cent next year to 73 per cent in 2023-24. Its first sustained fall in a generation.

Our priorities for Britain

1. Building an economy fit for the future.

• Cementing our position as a destination for new tech. To maintain the UK’s lead in advanced technologies we will invest £79 million in a new supercomputer in Edinburgh, £45 million in research in genomics, £81 million in a new laser centre and reaffirm our commitment to the JET nuclear fusion reactor.

• Carrying out a study of digital advertising later this year to ensure our digital markets are competitive and consumers get the level of choice they deserve. As recommended by Professor Jason Furman, the Competition and Markets Authority will carry out a formal study of digital advertising. This follows our announcement at the Budget that we will consult on a new Digital Services Tax to ensure large multinational businesses make a fair contribution to supporting vital public services.

• Continuing to welcome the best and brightest to Britain. From the autumn, PhD level occupations will be exempt from the Tier 2 visa cap, and we will update the immigration rules so researchers conducting fieldwork overseas are not penalised if they apply to settle in the UK.

• Building world-class infrastructure. Ten English cities will receive a share of £60 million for transport projects through the Transforming Cities Fund, and we will boost digital connectivity by rolling out fibre broadband to nine more local authority areas who will each receive a share of £53 million. The Chancellor has also reiterated our commitment to Northern Powerhouse Rail.

• Forging new partnerships to build a Global Britain. We will set up a new export finance facility to provide more flexible short-term support to UK exporters as we leave the EU.

2. Supporting families.

• Restoring the dream of home ownership for millions of young people. A new £3 billion Affordable Homes Guarantee scheme will deliver around 30,000 affordable homes. We will also introduce a new permitted development right to allow upward extensions without the need for planning permission.

• Boosting wages and cutting taxes. We are increasing the National Living Wage this April to £8.21, an annual pay rise of £690 for a full-time worker. The Personal Allowance will also rise in April to £12,500 and Higher Rate Threshold to £50,000, cutting tax for 32 million people. And we will undertake a review of the latest international evidence on minimum wage.

• Tackling period poverty. We’ll provide free sanitary products for girls in secondary school, so no girl is ever forced to miss out on her education.

3. Supporting public services.

• Tackling knife crime with £100 million of new funding for police. A further £100 million funding will be available to police forces in the worst affected areas in England and Wales for knife and violent crime. The majority of the funding is being provided to Police and Crime Commissioners for the seven police forces where serious violence levels are highest, and which make up around 70 per cent of knife crime. Those forces cover London, West Midlands, Merseyside, South Yorkshire, West Yorkshire, South Wales and Greater Manchester. 

• Building world-class public services by increasing spending by above inflation. In the last two years alone, we’ve made the biggest pledge of any government since 1945 to our NHS and police budgets will increase by up to £970 million this year. From 2020, at this year’s Spending Review overall public spending will increase above inflation, with more for frontline services that we all rely on. 

4. Green Growth.

• Staying at the cutting edge of Clean Growth. We will take steps to enable passengers to have the option of ‘zero carbon travel’, help businesses to cut their carbon emissions and their energy bills, further decarbonise our gas supply, and will introduce a Future Homes Standard, bringing the end of fossil-fuel heating systems in all new houses from 2025.

• Leading the world to enhance biodiversity whilst ensuring economic prosperity. We will require developers in England to enhance habitats for wildlife alongside developments. A new global review will assess the economic value of biodiversity globally so we know what’s needed to take action.

• Reducing our dependency on natural gas by increasing the proportion of green gas in our system. To meet out climate targets we will reduce our dependency on burning natural gas to heat homes, accelerating decarbonisation by increasing the proportion of green gas in the grid.