Securing the recovery is the main aim
East Ham MP Steve Timms talks about the financial recovery Last week, Alistair Darling delivered the final budget before the election. It was the climax to a huge amount of work over the past year by all of us in the Treasury. We can see clearly now that
East Ham MP Steve Timms talks about the financial recovery
Last week, Alistair Darling delivered the final budget before the election. It was the climax to a huge amount of work over the past year by all of us in the Treasury.
We can see clearly now that the Government's judgments over the past couple of years have been right. It was right to intervene to rescue the banking system from collapse. It was right to support the economy - families and businesses - through the world's worst economic crisis since the 1930s.
As a result, we have come through the downturn with much less damage than many expected - much less than in the 1980s and 1990s recessions. Fewer homes repossessed. Fewer businesses failed. Fewer jobs lost. The number claiming unemployment benefit is 1.6 million - compared with 3 million in both the previous recessions. It has fallen for the past few months.
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The UK's G20 Presidency last year - particularly the summit a year ago at ExCeL - was key to the successful international response to the crisis.
The world economy is recovering. But the recovery is still fragile. Europe accounts for 60 per cent of our trade. Germany's economy started to grow and then went flat. Italy grew and then shrank - and Spain still hasn't come out of recession.
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So the Chancellor's over-riding Budget priority was to secure recovery. That means sticking to our spending plans next year.
Cuts now would risk suffocating the recovery. And we are keeping our "Time to Pay" service. That has enabled businesses with cash flow problems to agree with Her Majesty's Revenue and Customs a longer time to pay tax bills - a lifeline for many businesses which might otherwise have gone under. 410 agreements have been made by Newham businesses so far.
When recovery is secure, we need to halve the deficit over the next four years.
That means �38 billion in spending cuts and �19 billion in extra taxes. We set out in the budget how we will deliver �20 billion in cost savings.
A spending review later this year will determine the rest of the measures needed, from April 2011 onwards. And we have ensured the tax changes will be fair. 60 per cent of the extra personal taxes will be paid by the wealthiest five per cent - for example, the 50p tax rate for those earning �150,000 per year plus. And we announced new penalties for offshore tax evasion.
But the Budget also laid foundations for future growth. We doubled the annual investment allowance, a tax break which particularly helps small firms to invest; and extended capital gains tax relief for entrepreneurs.
A new Green Investment Bank will have funds of �2 billion. There will be 10,000 extra university places next year, particularly in science and maths.
Borrowing will be less than expected this year and next, because tax receipts have been higher. That reflects the success of Government strategy so far. And the Chancellor's message last week was that, having set our course, we will see it through.