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Chancellor: ‘recovery will be for all parts of the nation’

Terry M outdoor 5Chancellor George Osborne told the Commons today that the recovery was on track and would benefit ‘all parts of the nation’.

He said that when the government came to power in 2010 it had to rescue Britain and now it was rebuilding it.

The government would fulfil its promised refocusing of spending, he said. “The £12bn of welfare savings will be delivered in full and in a way that helps families as we make the transition to a national living wage.

“It will be an economic recovery for all and all parts of our nation,” he said, noting that more jobs were created outwith the southeast of England. “Our long term economic plan is working.”

He said the eurozone remains a persistent problem. It was why it was necessary to protect Britain’s economic certainty.

The economy is expected to grow by 2.4% this year and in 2016, by 2.5% in 2017, 2.4% in 2018 and 2.3% in 2019.

Borrowing will be £73.5bn in 2015-16, £49.9bn in 2016-17, £24.8bn in 2017-18 and £4.6bn in 2019-20.

Public spending will rise from £756 billion this year to £821bn in 2019-20 when the Chancellor expects the deficit to be eliminated.

Simon Walker, Director General of the IoD, said: “The Chancellor was dealt a remarkably strong hand by the Office of Budget Responsibility, which is predicting stronger growth, lower than expected borrowing costs and significantly higher tax receipts. He’s chosen to play this hand with more spending than expected.”

John Hawksworth, chief economist at PwC, said:  “The Chancellor got an early Christmas present from the OBR when they reduced their projections for underlying public borrowing slightly in the medium term.

“The OBR’s more favourable public borrowing projections gave the Chancellor some extra wiggle room, most notably by cancelling planned tax credit cuts in 2016/17. He is also raising significant extra sums from the apprenticeship levy and increased stamp duty on second homes.

“The Chancellor also announced increased spending on transport infrastructure and housebuilding, both of which are very welcome in supporting longer term economic growth and countering chronic shortages of housing supply.

“But there is still some pain to come. Welfare cuts totalling around £12 billion by 2020 will still be made, but now with a more gradual phasing in of these cuts over time. Unprotected government departments will face a further Parliament on basic rations as regards their day-to-day spending. Local authorities will be allowed to raise council tax to help fund spending on social care, but will face a continued squeeze on their spending in other areas.

“Overall, the Chancellor has made good use of the more favourable borrowing forecasts to boost capital spending in key areas and ease in his spending cuts more gradually over time.”

 

 

 

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