Steve Barclay is Economic Secretary to the Treasury and is MP for North-East Cambridgeshire.
Yesterday the Chancellor set out a balanced budget which marked a clear diving line with the Labour Party which always goes too far on borrowing and spending. It reflects our Government which is looking forward to the opportunities of post-Brexit Britain with optimism, viewing forthcoming major changes in technology as an opportunity. This budget is in stark contrast with Jeremy Corbyn’s Labour, which would take the country back in time.
Philip Hammond addressed three specific needs yesterday: to continue reducing the deficit, to support families with cost of living pressures, and to invest for the long term in infrastructure, skills, and housing to deliver the improvement in productivity needed for sustainable growth in wages.
The Conservative Party should be proud of the heavy lifting it has done to clear up Labour’s economic mess. We have reduced the deficit by three quarters since 2010 from the high of 9.9 per cent of GDP down to the current 2.4 per cent. Under the plans set out by the Chancellor in the budget, the deficit will continue to fall every year over the next five years, down to just 1.1 per cent.
Alongside this, the Government has listened to the feedback we received in the general election from families. We have used some of the funding set aside last year to address these cost of living concerns, increasing the living wage to £7.83, raising the personal tax allowance to £11,850, freezing costs like fuel for the eighth year, and supporting Universal Credit claimants helping people back into work. Families are helped most by having a job and by being able to keep more of their own money.
We have also listened and recognised pressures on the NHS from an older population with increasing health needs. This includes additional funding for both immediate winter needs this year alongside funding for capital transformation plans. The Chancellor also set out his commitment to support a new pay deal for nurses and other healthcare staff, subject to agreement being reached by the Secretary of a State for Health and the nursing unions.
And we have listened to our businesses, in particular on their top priority for more support on business rates. Alongside the £9 billion package of measures announced in the Budget last year, we have brought forward by two years the change from RPI to CPI, which will now apply from April next year.
The strength of the economy following 19 consecutive quarters of growth, three million more jobs, and a doubling of foreign direct investment flows in the last year from £80 billion to £158 billion, has also enabled the Government to invest for the long term to improve productivity.
We want the next generation to have the same opportunity to own their own home as their parents. Progress is being made with an extra 217,000 homes last year, a big increase on the 110,000 homes under Labour when last in Government. But we want to go further, with a target of 300,000 new homes. The Prime Minister’s personal commitment to delivering more affordable housing is clear in the £44 billion package of measures announced to date including in the Budget, at our Party Conference, and in the Housing White Paper. This includes removing stamp duty for the majority of first time buyers.
As well as owning their own home, we want to ensure people have the skills to benefit from jobs in the new areas of technology, such as in our plans to lead the world in Artificial Intelligence. We have already doubled the apprenticeship funding from 2010, and in the budget announced a range of further measures including supporting more maths and computer science teaching. We are also funding a major boost to our investment in research and development as part of the industrial strategy, including making it easier for our pension funds to invest in knowledge-based businesses. Greg Clark will be setting out further details in the next few days.
Embracing these opportunities also includes preparing for a post-Brexit Britain. It remains our intention to reach an ambitious free trade agreement with the EU in both goods and services, as the Prime Minister set out in her speech in Florence. This is in the interests of both the EU and the UK. But we need to prepare for all outcomes in our negotiations with the European Union. As such the budget allocates £3 billion to support our preparations for leaving the EU.
This combination of meeting our fiscal targets, supporting families, and investing for the long term reflects our balanced approach. It shows our Party is looking forward with optimism to the opportunities on technology ahead, and is developing the transport infrastructure and skills needed to unlock its full potential. It reflects a Government that has listened to feedback from the general election. And it continues to clear the deficit, prepare for Brexit, and back our businesses with the support they need to boost productivity. This is a Budget that delivers a Britain fit for the future.