The UK has the highest ever number of people in work. Even compared to our neighbours the UK’s performance is stellar: we have under half the rate of unemployment than France (where sadly 1 in 5 young people are out of work). The Budget highlight is that this brilliant jobs performance is expected to continue with an extra 800,000 jobs by 2023 making nearly 4m new roles created since 2010. Wages are also expected to rise above inflation in the years ahead, helped by an above inflation rise in the National Living Wage.
Record job creation is incredibly important for individuals and families but also has a hugely positive impact on the national finances with more money being spent in the economy and more tax being raised.
It has enabled the Chancellor to undertake three tasks.
First we need to continue to fix the country’s finances. Under the current projections the national debt will continue to fall as a percentage of our economy – reducing the financial challenge facing future generations and creating scope to deal with future economic shocks.
Secondly he has increased spending on public services. The biggest single focus is the NHS – more money is being spent rising to over £20bn a year of extra spending by 2023-24. This is critical investment in the nation’s top spending priority, it includes significant expansion in mental health services which I know will be very widely welcomed. Investment in social care will provide extra indirect support to the NHS as well as helping hard pressed councils who are also receiving an increase in support for childrens’ services.
While long term spending plans away from the NHS will be determined by the spending review which will be conducted after we have left the EU, the Chancellor found extra cash this year to be able to provide all schools with extra money to spend on resources: £50,000 for the average secondary school and £10,000 for the average primary.
More money is being invested in Universal Credit – helping smooth the transition back into work and helping ensure it pays. In uncertain times more money is also being committed to support our armed forces and counter-terrorism police.
Substantial extra investment in full fibre roll-out and in future technologies are aimed at making our economy more productive. While the internet is a hugely positive force we need to maintain a level playing field. While continuing to push for international solutions the UK is itself introducing a tax on the global internet retailers while cutting business rates at home – helping to preserve our high streets.
Lastly taking a decision that the long, difficult, first phase of restoring our national finances has been completed and that the next phase can be more balanced doesn’t just mean extra public spending – some benefits can feed through in lower levels of tax. Higher income tax thresholds will help taxpayers keep more of their money and will take even more of the lowest paid out of income tax altogether.
Photo caption: The Southwater Art Group held their annual exhibition in Lintot Square over the weekend. The Group is clearly thriving and it was a pleasure to look round.