THE BLOG
18/03/2015 12:51 GMT | Updated 18/05/2015 06:59 BST

No Short-Term Giveaway Will Provide as Much as a Long-Term Recovery

In his last Budget before the election the Chancellor did something unusual. Most pre-election Budgets are characterised by gimmicks, giveaways and unfunded spending commitments, an art perfected by Gordon Brown. This Budget did nothing of the sort. Instead it set out the next steps of our long-term plan to make Britain the most prosperous of any major economy.

Critical to that plan is getting the national debt down, for two reasons. First because the greater the debt, the more we spend on debt interest and the less we have for vital public services. Second because countries with high levels of public debt are extremely vulnerable to economic shocks, as we saw in 2008. There are plenty of risks still out there and the panic what would result from Greek eviction from the Eurozone is a real threat to Britain. So it's vital that we safeguard the nation's finances now. 

That's exactly what we're doing. In the Budget the Chancellor revealed that the national debt as a share of the economy will be falling, for the first time since 2001. It means the end of austerity is now in sight. By the end of the next Parliament Britain will be back in the black, running a budget surplus for the first time in a generation.

But we're determined not to repeat the mistakes of the past. We have to stick resolutely to our deficit reduction plan and instead of a return to debt-fuelled growth, we want to create a long-term prosperity which all can share in. This year's Budget laid out exactly how it will be done.

First by rewarding work. In this Parliament the amount you can earn tax free has increased from £6,500 to £10,500, meaning the typical taxpayer is £800 better off. The Budget set out that next year this will rise to £10,800 next year and to £11,000 the year after that. This represents a tax cut for 27million earners and will take four million of the lowest paid out of tax altogether. At the same time, the National Minimum Wage will rise to £6.70 this autumn and the apprentice minimum wage is set to see its biggest increase ever.

Along with rewarding work, this Budget also backs savers. Five million pensioners will now have access to their annuities to spend as they see fit, we're bringing in more flexibility over ISAs, and from next year the first £1,000 of interest on your savings will be tax free. Crucially, we're also bringing in a new savings product for first-time buyers. For every £200 you save for your first home, the Government will add £50, effectively a huge tax cut for first-time buyers.

This help for savers and workers is about recognising that we have to earn our way to prosperity, we can no longer afford to borrow it from future generations.

And we want all parts of the country to share this growth. That's why the Budget set out plans for more investment in energy and manufacturing in the Midlands, a new rail franchise to bring intercity express trains to the South West and new powers for Greater Manchester and Cambridge to retain 100% of the additional revenue they collect in business rates, allowing them to spend it on local economic priorities. We're also now committed to bringing ultrafast broadband of at least 100 megabits per second to nearly all homes in the country.

Other important measures include extending tax credits for the creative industries, an increase on the bank levy so banks contribute more to deficit reduction, and replacing the Annual Tax Return with a new digital tax account, helping to free up small business-owners from time-consuming bureaucracy.

Earlier this year the Chancellor said that our goal was to become the most prosperous major economy by the 2030s. That's now a credible ambition. We're growing faster than any other major Western economy, three times faster than the Eurozone and seven times faster than France, a country which tried to implement 'Plan B'. There are now more people in work than ever before, with 80% of new jobs created in skilled roles. And the economy is rebalancing, with manufacturing on the rise and the North growing faster than the South.

There's still much more to do to make that goal a reality but this Budget has brought us closer. That's why I'm proud to give it my full support.