The House of Commons Library has produced a summary of the ??Summer Budget? 2015 which includes the Office for Budget Responsibility’s (OBR) forecasts for the economy and public finances.
Read the summary or download the full report here:
http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7251
Source: Facebook/UK Parliament
Thanks to the Yahoo! Finance link below, here are the key points in the post-election budget of Chancellor George Osborne.
https://uk.finance.yahoo.com/news/budget-key-points-know-111606650.html
There is too little understanding in the British public of the reasons that, under the Tories, the British economy is increasing by over 2% per year, while there is economic stagnation in most of the rest of Europe.
An important one is the reduction of bureaucratic administration. A BBC review of the French community in London revealed that the greatest motive for moving to London was the greater sense of freedom it offered them from the delays and constraints of life back home.
It is this, in a world where innovation has become a dominating theme in the economic world, which has given the impulse for Britain’s economic growth. It has taken a firm lead in the field of « Start-Ups ». It has several outstanding centres of excellence such as Cambridge and Hackney; being a major financial centre is also providing the venture capital to finance promising, innovating enterprises. This spirit of independent initiative goes deeper; 8 million people are now working alone.
Suffering under the handicap of austerity budgets the Government has nevertheless shown vision by several major undertakings: London?s Crossrail; The proposed HS2 high-speed line to the Midlands: The project for improving the rail system in the North.
This is part of their economic planning to reduce the disparity between North and South England. This includes plans to devolve power to the major cities, so that they will have restored to them authority over education, local planning and taxation etc. which were lost during the World Wars. This has already taken place in the case of Manchester. A number of Northern industrial towns have had their centres rebuilt. There are increasing signs of a return to industrial activity in the North.
Five years is not a long time in terms of economic trends. But in this time the Conservatives have planted the shoots for a British revival based on the principles of liberalism, of individual initiative and endeavour, relatively untrammeled by heavy bureaucracy and taxation.
A Labour victory in May would see a return to Socialist principles, risking a return to the static conditions we have witnessed in France.
Michael Webster
BCiP Member
Elections are decided on the personalities of the leaders of the parties, on the policies that they put forward but, above all, on the record of the government that has been in power up to the election. So let us have a look at what the Conservative led coalition has achieved and how the electorate should react to it.
The vital issue is the economy and the Conservative Party identified the Labour government?s budget deficit as the problem that they had to resolve.
Historically Conservative governments have always been strong in balancing public expenditure with the government?s revenue receipts. Under the Thatcher government, the 1990 budget was in surplus by £6 billion and the national debt stood at 27.7 per cent of GDP.
Gordon Brown, as Chancellor and as Prime Minister, decided to impose a ?Golden Rule?. This required the government to generate a budget surplus across the lifetime of an economic cycle. Unfortunately Labour?s inherent commitment to government spending was too strong, and they got round this commitment by defining the economic cycle to suit their own ends. So when the Coalition Government came to power in May 2010 it had inherited a budget deficit of £153.5 billion, 10.2% of GDP. Total expenditure was £673 billion, so the government was borrowing 23% of what they spent. In his June 2010 emergency Budget speech George Osborne said « As this is the last Budget in which the Golden Rule will appear, I would like to be the last Chancellor to report on it. We are set to miss the Golden Rule in this cycle by £485 billion. »
Conservatives believe that government deficits must be controlled not just out of blind adherence to political dogma but for sound practical reasons. Firstly higher government borrowing pushes interest rates up to a higher level than they would otherwise be, and that reduces private sector economic activity. Secondly, high borrowing results in pressures to increase taxation and taxation, however necessary, also reduces growth in the private sector economy. Finally increased public borrowing increases the National Debt, which requires greater government expenditure to service it. Those of us who live in France, of course, know all of that full well. So the government?s achievement on reducing the deficit to what is expected to be £90 billion in 2014/15, is strongly to be welcomed.
This has contributed to the trend for employment to rise and unemployment to fall that we have seen since late 2011/early 2012. There are currently 30.9 million people in work, 2 million more than when the government came to power. The official employment rate, i.e. the proportion of people aged from 16 to 64 in work, is 73.3%
The proportion of the economically active population who are unemployed (the unemployment rate) is 5.7%, compared to 7.8% when the government took office.
So the theory set out above works, and the reduction in the public deficit has yielded significant benefits to the UK economy. The painful austerity programme is not just adherence to political dogmatism that deserves public rejection, as our opponents would have the electorate believe, it is beneficial to the country as a whole, and particularly to those two million extra people who now have jobs.
Robin Baker
BCiP Member