Today the Chancellor of the Exchequer, George Osborne, delivered the first fully Conservative Budget for almost two decades.
In response to the Chancellor’s statement, David Davis MP said:
“This budget has been delivered in far better circumstances than the Chancellor inherited in 2010 as a direct result of the Government’s policies in the last 5 years. The budget deficit and borrowing has fallen by half and our debt as a proportion of GDP is falling. This Government’s careful management of the economy has taken us back from the brink and is setting the foundations for a period of prosperity, and the security of a country that lives within its means.
As a result, the UK is the fastest growing major advanced economy, unemployment is at historic lows, and standards of living are rising strongly.
The Chancellor’s announcement that a living wage will be introduced from April next year at the rate of £7.20 a year, rising to £9 by 2020, will be welcome news to the lowest paid in our society. Those currently on the minimum wage will see their pay rise by over a third this Parliament, and it is absolutely right for this Government to help people off benefits and into paid work.
That being said, the Government needs to carefully monitor the effects of this change on employment and ensure that the new Living Wage is set according to productivity and market forces rather than the concerns of campaign groups.
While these measures will help, the nation faces a real battle to improve its productivity. The pay, skills and devolution measures the Chancellor announced will go some way towards addressing this issue, but there is still much for the Government to do.
The further increase in the personal allowance to £11,000 will help to reduce the tax burden on the lowest-paid, and the increase in the threshold for the 40% rate of tax to £43,000 will help those hard-working families who have found themselves dragged into the higher tax rate in recent years. Far too many people pay the 40% rate of tax, a tax that was designed for rich people, not the hard-working professionals it now falls on.
The Government is also to be applauded for its support for business across the country. By announcing it will cut Corporation Tax to 18% by 2020, raising the Employment Allowance from £2,000 to £3,000 to reduce the burden of National Insurance Contributions, and setting the Annual Investment Allowance at a new permanent level of £200,000 this Government has indicated that it is on the side of business.
I also applaud the Government’s commitment to infrastructure and roadbuilding. For many in rural constituencies, travel by car is the only option. The new system of Vehicle Excise Duty will finally see our roads receiving the investment they need to keep them up to standard, and provide funds for the expansion of our road network.
I have long called for the Government to commit to properly funding our armed forces, and we should consider the NATO 2% of GDP target to be the minimum required. It is vital that the Government does not attempt to achieve the target through creative accounting, and instead provides adequate funding required for the security of our nation.”