I have mentioned before that the financial legacy which this government have inherited is absolutely mind boggling.
Over £1 trillion of debt; an overspend of £180bn annually (borrowed money and adding to national debt annually); £120m per day in interest repayments (that is higher than the cost of our 440,000 Teachers and 132,000 Police Officers cost us daily); 4 million people claiming benefits and youth unemployment at a record high.
It doesn’t take a rocket scientist to realise that we are in a mess. The biggest peacetime mess this country has ever experienced. Even worse, than the dire years of the 1970’s.
At the end of last month we saw another budget where the Chancellor’s hands are tied. Not tied enough however to prevent him coming out with some absolute innovative gems to boost jobs and growth:
£2,000 per employee reduction in National Insurance Contributions for employers. This is an absolute life line for all employers but in particular the very many small businesses that do a tremendous job in the Calder Valley with employing people. Over 1.25m extra jobs nationally created by the private sector over the last 3 years. This move also totally abolishes Labour’s Job Tax.
20% deposit for new build homes for first time home buyers now followed by the same deal for everyone from Jan. 2014. One of the biggest issues we have in the UK is a national shortage of homes and this little gem of a policy will help fuel the building of new homes as well as create many jobs in the construction industry. A dramatic intervention which supports house building and many additional jobs, not just in construction. Our very own home-grown business, Marshalls Plc., will be just one just one of the many to benefit greatly from this move.
The target of 20% Corporation Tax will mean the UK will have the most competitive rates in the whole of the G20. We have already increased from being the 16th most likely place in the world for investors, up to 3rd. This is a tax cut for growth and jobs.
Increased Research and Development tax breaks for companies not only benefit high end technology for the UK but I have been told by several Calder Valley businesses that this is hugely welcomed locally and ensures sustainable local jobs.
This month we also saw the introduction of several things to back working families.
Welfare becomes fairer; policies that help create more jobs as well as making sure that hard working people keep more of their hard earned cash.
These reforms have one simple principle at heart – making sure people are better off in work than on benefits. 9 out of 10 working households become better off as a result of the changes. The average working household will be better off by £300 per year – That is the equivalent to the average monthly shop.
To help fix the Welfare State we have seen the introduction of the ‘Benefit Cap’. This will mean that no family who is out of work will receive more in total benefits than the average family gets in work.
Uprating benefits by 1%. It is not fair that out of work benefits should rise faster than incomes of those in work. In my previous company before I became an MP, many of my colleagues have seen a pay freeze now for the 7th year, so increasing benefits by 1% is very fair.
From this month we also see the spare room subsidy applied to Social Housing as it currently applies to the Private Rented Sector and has done since 2008. This is a fair move to ensure that the tax payer helps those 2 million people waiting to move to homes fit for purpose rather than the cramped living conditions many currently live in.
Finally for all working people in the UK we see a tax break with personal allowances rising from £8,105 to £9,440 and a pledge to increase that to the first £10,000 of all people’s incomes being tax free by next year. That is 24m people who will pay over £700 less per annum in income tax than when the government came to office.
And finally, as the recent study by the Think Tank, SocietyCentral in conjunction with Essex University highlights, the hardest hit by the austerity measures are the wealthiest. The overall distributional effect of changes to direct taxes, social insurance contributions, cash benefits and public sector pay is clearly progressive (reducing the incomes of the rich by a much greater proportion than the incomes of the poor).
Whatever your political allegiances are one thing is certain, financially we are in a mess and whoever is in government would have to take difficult decisions to put things right. The benefits of the current one is that they are not afraid of taking difficult decisions but more importantly, decisions which are fair right across society.