Next week the chancellor will deliver the spring statement. But there will be no red box, no rabbits out of the hat and no tax changes.
Almost everyone has agreed that our decision to move to one budget each year is for the best. Businesses and families will enjoy the greater certainty over the future, while the simplification has also been endorsed by the IMF, the Institute for Fiscal Studies, the Chartered Institute of Taxation and the Institute for Government.
But Labour has called for big spending announcements, which would have to come alongside big tax increases. Their plan would be bad news for families, bad news for businesses and bad news for the economy. Now more than ever, we need to avoid crippling tax hikes and keep Britain open for businesses.
We’ve come a long way in the past eight years, with unemployment at a near-record low and manufacturing on its longest growth streak in 30 years. We’ve cut tax on small businesses to support jobs, cut income tax for families and most recently abolished stamp duty for first time buyers. We have done this to make sure that people have more freedom to spend their own money.
At the same time we have maintained our commitment to supporting our great public services. Since the 2016 autumn statement we have committed more than £6 billion for health and more than £30 billion to boost our productivity, which will increase wages and living standards for everyone.
And we need to make sure we reduce our debt, which currently stands at almost 90 per cent of our national income, after Labour’s splurge plunged us into the largest period of debt growth since the Napoleonic Wars.
Our disciplined approach has meant sustained progress since 2010. The deficit has been cut by three quarters, and the autumn budget forecast showed that we’re on course for debt to be falling as a share of the economy by the next financial year.
But the danger of high national debt has not passed. The Office for Budget Responsibility’s fiscal risks report highlighted that the public finances are still vulnerable to economic shocks.
And we still spend around £50 billion on debt interest — more than we spend on schools. If we want to free up that money for public services, protect ourselves against future events and not burden our children with debt, we’ve got to stick to our balanced approach.
We also need to recognise that it is businesses that will power us towards becoming the most exciting, energetic economy on earth. And the way to help them succeed is not by spending more government money but by giving Britain’s businesses more freedom, keeping corporate taxes low and making it easier to take on staff, while ensuring that companies play by the rules.
This is the path we have been on, and it has helped businesses to flourish. And their success has been our success: we have had an uptick in productivity, a record number of new businesses and GDP has grown for the past five years.
So our message is simple: let’s keep on course, keep our economy strong and focus on the opportunities ahead of us. We want to keep taxes low so that the weekly budget goes further.
And let’s give British businesses more freedom so they can spend more time doing what they do best: developing exciting new products and services, investing in more good jobs, and helping to build a strong economy that’s fit for the future.