Sunday, 21 December 2014

30.8 million of us have jobs

This week we learned that 30.8 million of us have jobs.[1] While I have blogged about the economy a bit recently, on the back of this news I wanted to come back to this topic because of how important this fact is.

There is a human face to the numbers when we talk about the 30.8 million of us in Britain in work. Statistics are often announced an impersonal way, which to be fair is understandable given the impersonal nature of numbers. However, behind the employment figures released on 17 December 2014 are people like you and I who now have the security of a regular pay packet. We 30.8 million people are not just digits in a spreadsheet, we are real people. We have real lives, real concerns, real bills to pay, real families to take care of. None of which would be possible without a job.

Behind the fact that 30.8 million of us have jobs is another story too, because having a £1 in your pocket is one thing but being able to make that go further is another. Having a job makes it possible to meet our obligations but there is more to it than that. How far our money goes is important too. That’s why it was good news when we learned another one of those lifeless statistics, on inflation, showed pay levels are increasing faster than prices in shops are increasing. More of us have the security of a steady wage, and now we have the extra security of knowing that the money in our pockets can get us a bit more too.

These are signs that the Conservatives’ long-term economic plan is working. There is still more to do, as mentioned in my previous blog, the Chancellor was clear on that in the 2014 Autumn Statement. However, for the hardworking taxpayers doing the right thing and trying to get on in life, we can take these statistics as a sign that Britain is on the right road. For many of us the fear since the economic downturn in 2008 has been that things would only get worse. However, the difficult decisions taken by the Conservatives since they entered government in 2010 have made sure that a) things have stopped getting worse and b) we are moving towards things being better. Of the 30.8 million of us who have jobs today, 1.75 million have got those jobs since David Cameron became Prime Minister.

We are moving towards a better, brighter more secure future. A lot of us have spent the years since the downturn began just trying to keep above water, so it can be hard to believe that things are actually improving. However, the statistics speak for themselves. Impersonal as the numbers may be they tell a true story. We have stopped falling and, instead of just clinging on, we are starting to climb our way back. Nonetheless, the slightest jolt could knock us off again.

If the Government were to stop trying to deal with our debts, if the Government were to begin spending and borrowing so it will have to tax more, all our personal finances would be at risk. Businesses may have to fire people to cope with the increased costs, and those us lucky to keep our jobs would find what’s left in our bank accounts at the end of the month would be less than we deserve it to be. There is no alternative to the Conservatives’ long-term economic plan to secure our future, and we must stick to it to guarantee future prosperity for ourselves, our families and our country.

[1] ONS, UK Labour Market December 2014, 17 December 2014, link

Saturday, 6 December 2014

On course for prosperity

On 3 December 2014 George Osborne, the Chancellor of the Exchequer, delivered the last Autumn Statement of the current Parliament. I was pleased by what I heard. The long-term plan to stop Britain borrowing more by 2018 will allow the Conservatives to deliver on their commitment to cut tax for 30 million people that year, ensuring everyone working 30 hours on the minimum wage will pay no tax. At the same time, stopping businesses paying national insurance on apprentices under 25 will encourage them to give jobs to more young people. That increases the chances of young people in Britain having the security of steady pay and the hope of a better future.

However, not everyone is as positive about the Autumn Statement as I am. The two main criticisms seem to have been a) 60 per cent of spending cuts are still to come and b) the plan would take us back to the 1930's. To some not enough cutting has been done, to others too much is in the works.  

There is still more to do. Nobody denies that. In fact George Obsorne said this when he gave the Autumn Statement.[1] The Conservatives’ have a long-term economic plan because our country’s deficit is a long-term problem. At this point people tend to say that the Coalition used to talk about clearing the deficit in one Parliament. Furthermore, many of those people seem genuinely motivated by the knowledge that the more of taxpayers’ money government is borrowing against, the less of taxpayers’ money it can stop taking. They worry more borrowing means lower chances of hardworking people getting the tax cuts they deserve. In principle I agree, which is why I support dealing with Britain’s deficit, but in practice I appreciate why it has taken longer than expected.

Deficit reduction is for the benefit of the British people, it cannot be done at our expense. We can debate what factors have led to slower progress than we had hoped e.g. the impact of global oil prices on North Sea tax revenues, but the fact is when you are faced with a bigger problem than anticipated you often need longer to fix it than first thought. The Conservatives’ have done their best to negotiate between cutting back on how much taxpayer money government spends, and ensuring enough of our hard earned money goes into our public services. As I have written previously, government spending decisions are not abstract they impact every single person in our country. Every £1 spent by government has to come from someone who could use it on themselves and their family. Every £1 saved from a public service means that service must adapt to meet the needs of the British people. The Government has had to walk the line between making fewer cuts, which would have led to taxes and interest rates rising, and making harsher cuts, which would have been too much for our NHS and education system to take. I believe they’ve done a good job. To quote George Osborne at length:

‘Today, the deficit is half what we inherited. Our long-term economic plan is working. Now, Britain faces a choice. Do we squander the economic security that we have gained, and go back to the disastrous decisions on spending, borrowing and welfare that got us into this mess, or do we finish the job, and go on building the secure economy that works for everyone? I say: we stay the course. We stay on course for prosperity.’[2]

We are not headed backward in time; we are headed forwards to a time where the burden of government spending on our bank balances can finally be eased. That will require government become leaner, and it will require more difficult decisions over how the taxes taken from us are spent. However, it will ultimately result in what people need most right now: a little extra in the bank after pay day to help us meet our obligations, to look after those we care about, and to plan for the kind of future we really want.

[1] George Osborne, Hansard, 3 December 2014, Col. 305, link.
[2] George Osborne, ibid., 3 December 2014, Col. 305, link.

Monday, 1 December 2014

Explaining our motives

Whenever the issue of public services is discussed the accusation that Conservatives want to cut these rears its head. Over the weekend the Chancellor, George Osborne, committed an extra £2 billion a year to help support our NHS. However, despite the health service itself welcoming Osborne’s investment, somehow the discussion has moved onto accusations about service reductions. Apparently some find it hard to reconcile that Conservatives want to deal with Britain’s debt burden and protect its public services. In fact some go further and question the motives of Conservatives in trying to control public spending at all. This last point I want to tackle in my blog today.

The reason we need to control public spending is because when it gets out of control the poorest are hit hardest. In politics people tend to use mild, inoffensive terms like ‘public expenditure’, ‘government money’, ‘Whitehall spending’. This has the impact of dulling the impact of the words. However, in plain English, when politicians say these things they are talking about our money. They are talking about going into our bank accounts and removing money, through taxation, for them to use. The soft language masks a hard reality: There is no such thing as government money, it’s our money. There is no such thing as government debt, it’s our debt. The more government spends the more it must tax us, either today to use directly or tomorrow to pay off its borrowing. Those least able to afford it when government needs to tax more are the hardworking people already struggling to get by.

We need to control public spending to give people in our country the financial security they need and deserve. George Osborne once said ‘the country has overspent; it has not been under-taxed’[1] and he was right. For people who work hard, do the right thing, and want to get on in life, payday often brings no real relief. Instead, many are greeted with the sight of a pay check that has been eaten away by tax. The last thing they need is for their taxes to go up. Sadly that would be the consequence of abandoning our long-term plan to deal with Britain’s debts.

Conservatives are not trying to get government spending under control because we don’t care but because we do. Behind every billion government promises here or there is a face, a family, someone who will have to get by on a little less unless care is taken to reduce government spending elsewhere. Justifiably people ask what about those in the public sector, don’t they have stories too? The answer, naturally, is of course. Unfortunately life often presents us with two doors: one marked ‘bad’ and another marked ‘worse’. Can we really boost public sector pay if that means down the line everyone will have to pay more tax anyway, a pay rise that could be nullified by a later tax rise anyway?

Conservatives have had to make difficult decisions to secure a better future for Britain. It has not been pleasant or pleasurable but it has been and remains necessary. We have bought ourselves some time with what we have done so far, now we need to finish the job. That way in the near future people can be rewarded for their patience throughout this process with lower taxes, allowing them to actually save and start planning better futures for themselves and their families.

[1] George Osborne, Hansard, 22 June 2010, Col. 166