Saturday, 28 December 2013

Liberal Democrats on the Economy

This recovery would not be happening without the Liberal Democrats. Our economy is growing because of the hard work of people and businesses throughout Britain. The Coalition's economic plan is the rock on which our recovery is being built.

Three and a half years in, and the Coalition’s priority is still the same: fixing the economy and cleaning up the mess Labour left behind.

That task has never been simply about balancing the books. We inherited an economy that had become profoundly unbalanced. Growth was driven almost entirely by one industry: financial services. Almost exclusively from one city: London. And behind the boom was a nation becoming less productive and less competitive. For years governments had simply papered over the cracks.

The Liberal Democrats didn’t come into Government just to make cuts. For us, this has always been about setting in motion a much more fundamental overhaul of our economy so that Britain never finds itself here again. That is not something you can do overnight. There are no quick fixes. No shortcuts to prosperity. It is a slow and steady process.

We’re cutting your income tax bill by £700. Council tax freezes mean that, on average, households are £1,000 better off over the course of this Parliament. Because we’ve frozen fuel duty, you’re £7 better off every time you fill up your tank. Families with young children will save £1,200 per child through our tax free childcare. And, on top of that, if they’re in infants school, you’ll save over £400 per child, per year because we’re going to provide free school meals.

Why can we do all this? Because we are fixing the economy and, as we do, we are making sure we give people as much help as we can give. Real help, not some con. Money back in people’s pockets today, as well as hope for tomorrow too.

We’re helping people with the cost of living in other ways. On 2 December, we announced proposals to cut £50 a year from energy bills, while maintaining our support for vulnerable households and green commitments. Council tax freezes are, on average, saving households in England £1,000 over the course of this parliament. Our fuel duty freeze is saving people £7 every time they fill up their tank. Families with young children will save £1,200 per child through our tax free childcare and will also benefit from our free school meals policy for infants – worth more than £400 per year per child.

We have created more than a million new jobs since 2010 and now we’re working to create a million more. There are more people in work today than at any other time in our history.

We’re helping young people find work. Since 2010 we’ve helped create more than 1.5m new apprenticeships, at twice the rate that Labour managed. Nick Clegg’s £1bn Youth Contract is supporting work experience, wage incentives and apprenticeships.

We still have a long way to go, but we are moving in the right direction. We have had three successive quarters of GDP growth. Under Labour, the economy shrunk for five consecutive quarters. Other economic indicators are also positive:

Key Facts
  • Thanks to our changes, disposable income was higher last year than in any of the 13 years under Labour. And the amount of money people had in their pockets adjusted for inflation grew by 1.6% in 2012.
  • By fixing the economy we have helped keep interest rates at historic lows, saving £2,000 per year for a family taking out a standard fixed-rate mortgage of £100,000.
  • GDP grew by 0.8% in the third quarter (Q3) of 2013, following growth of 0.7% in Q2. Growth was Q3 broad-based across all four industrial sectors for 6 months, the first time this has happened since 1998. MPs can see the latest figures for their constituencies here.
Labour wants to get back into Government in eighteen months, yet the sum total of their plan seems to be a single promise to temporarily freeze energy bills. As always, if it sounds too good to be true, it is: the energy companies would simply hike up prices before and after the freeze and Labour could do nothing to stop them.

But even worse is what this promise says about Labour.

They honestly believe that they can walk back into Downing Street with a giveaway here, a gimmick there, but no credible economic strategy. Do you know why Ed Miliband suddenly wants to talk about the cost of living?

Because they’ve lost the bigger economic argument. Where are the million lost jobs they predicted? Or the flatlining GDP? Where is the double-dip recession that never happened? Or - as David Blunkett warned - the post-Soviet meltdown?

Plan A hasn’t failed, it’s working. And the truth is that healthy household budgets flow directly from a healthy economy. The two go hand in hand. The Labour Party can carrying on lecturing us all on fairness, but you cannot magically create a fairer society without bothering to build a stronger economy.

So don’t be fooled again: you cannot afford Labour. Let loose in government on their own they would wreck the recovery – costing jobs, driving up interest rates and undermining the growth needed to cut tax bills and fund public services. They cannot be allowed to undo all of the sacrifices that have been made and everything that has been achieved – the British people would pay the price.