Our message on the economy is simple: it’s a hard road, but we’re making progress. And to turn back now would be a disaster. Labour’s plans to borrow even more would take us back to the economic mess they created.
The economy is healing and a steady recovery is forecast. The deficit has fallen by a quarter in just two years and is forecast to go on falling. Exports to emerging markets have doubled and 1.2 million new jobs have been created in the private sector since this Government came to office.
We are doing better than many of our international competitors. We have lower unemployment than in the eurozone or the United States and next year the UK is predicted to grow faster than France or Germany.
We are on the right path, so we are sticking to the deficit plan we set out two years ago. We will not cut spending any further in this Parliament. Because the economic situation is tougher, it will take four years, not three to get our debt falling.
Instead by making savings from bureaucracy, from the benefits bill, and by ensuring that the better off play their part, we will do more to help families and back businesses.
To help Britain win the global race:
- £5 billion of capital investment in science, education and roads, paid for by more savings in Whitehall.
- Savings to pay off the deficit, with working age welfare uprated by 1% for 3 years, a 1% uprating of some tax thresholds too and restrictions on the very largest pensions pots.
- A new gas strategy to ensure we can exploit new shale gas reserves.
To help British businesses compete:
- Another 1p cut in corporation tax, so it will have fallen from 28p to 21p under this Government.
- An increase in the annual investment allowance to £250,000, this will cover the total annual investment undertaken by 99% of all the businesses in Britain.
To help people who want to work and get on:
- Cancelling January’s 3p fuel rise, meaning fuel duty is 10p lower than under Labour’s plans.
- Increase in the personal allowance by a further £235. That means in April 2013 the personal allowance will go up by £1,335 – the largest ever cash rise. 24 million people will get a tax cut, with most being £267 better off in cash next year. It also means 2.2 million people will have been taken out of income tax.
Clearing up Labour’s mess was never going to be easy, but we’re making progress. We’re on the right track and we won’t turn back.