Today the Chancellor of the Exchequer delivered his first budget since the General Election. The key themes were as follows:
- The economic security of a country that lives within its means: Britain is forecast to be the fastest growing major advanced economy for a second year in a row, but the deficit is still too high. That is why I am pleased the Budget sets out a balanced plan to cut the deficit at the same rate as in the last Parliament to achieve a surplus by 2019/20.
- Greater financial security for individuals and families. I welcome the new National Living Wage, which will mean two and a half million people get a direct pay rise and those currently on the minimum wage will see their pay rise by over a third this Parliament. The tax-free personal allowance will increase to £11,000 next year and the 40p tax rate to £43,000, lifting 130,000 people out of this higher tax rate. The effective inheritance tax threshold will rise for most couples to £1m.
- Cutting tax on business to secure growth with Corporation Tax reduced to 18 per cent: Corporation tax will be cut further, having already been reduced to the lowest rate in the G20 and aligned for large and small businesses. Employment Allowance will rise from £2,000 to £3,000, so that a firm will now be able to employ 4 people full time on the new National Living Wage and pay no national insurance at all.
- The national security of a country that defends itself and its values: The Budget commits to meeting the NATO pledge to spend 2% of national income on defence in every year of this decade.
I believe that this is an extremely important budget which keeps Britain moving from a low wage, high tax, high welfare economy to a higher wage, lower tax and lower welfare country.