The defining issue of this Parliament has always been whether the economy would recover before the next election. And it has.
Just four years ago Britain was on the brink. Labour had collected £5 trillion in taxes and borrowed half a trillion more. Labour had more than doubled the national debt to more than £1 trillion and left the UK with the highest budget deficit in the world barring Greece and Ireland.
This afternoon’s Autumn Statement gives a very different picture for the UK. Unemployment, inflation and the deficit are all falling and the UK’s growth rate is the envy of nearly every other major developed economy. There are a record 30.8 million people now in work, half a million more than Chancellor George Osborne predicted last year.
George Osborne has today shown that the Conservatives are on the side of aspiration to work and save. Under the Government’s new plans for savings when someone dies, their husband or wife will be able to inherit their ISA and pension tax free. The Government has also announced that it will abolish National Insurance Contributions for employers who employ an apprentice under 25. This will help young people get the skills they need to get on in life.
The reform to stamp duty will be hugely popular with the electorate. Ninety-eight per cent of those who pay stamp duty will pay less. The buyer of the average family home (£275,000) will pay £4,500 less. The current cliff-hanger system for stamp duty is clearly unfair, forcing people to pay thousands of pounds more for a house that is a penny more expensive. The new sluice system, which will work like income tax, is good and principled. The new rate will hit the rich. But unlike Labour’s mansion tax the rich will be charged as a one-off – at the point of transaction – as opposed to charging year on year. This will undoubtedly spike Labour’s guns ahead of May. How will Ed Balls react? Will Labour still enforce a mansion tax?
Osborne has not succeeded in all of the tests he set himself in 2010. Most notably the structural deficit will not have been eliminated come May. But the 2014 Autumn Statement makes plain that the Government’s long-term economic plan is working. Today confirmed that, with its disastrous decisions on spending and borrowing and welfare, it would be insane to invite Labour back behind the wheel of the national economy.