Alan Duncan: Another step in the right direction
Last week’s Autumn Statement was another step in the right direction for the British economy.
The economic news it contained continues to warrant cautious optimism. Growth for this year has been revised up to 3 per cent, making us the fastest growing major advanced economy. Unemployment is predicted to fall to 5.4 per cent next year, considerably down from the 8 per cent we inherited. The deficit is also falling and will be down by half this year.
There were a number of key reforms in the Autumn Statement designed to make things easier for small business, home-buyers and young people.
The reform of Stamp Duty is a hugely positive change for the vast majority of people looking to buy their own home. Rather than the old slab system, where a house value tipping just into a new band brought with it a huge jump in stamp duty, the new system will be set up like income tax. From now on, you would only pay the higher rate on the part of the property that falls within that band.
This is an enormous boost to buyers, 98 per cent of whom will now pay less than under the old system.
Crucially, it is fairer in the long term. Rather than Labour’s proposed Mansion Tax, which would levy an annual standing charge on some properties, Stamp Duty is only payable once, when you actually buy your house. This represents an entirely differing approach to tax and aspiration.
There were also steps to make it easier to take on a young person. From April 2016 an employer will pay no National Insurance contributions for apprentices under the age of 25. From next April, employer National Insurance contributions will be abolished altogether for under 21s.
For the first time ever, we will also make government-backed student loans of up to £10,000 available to young people for postgraduate masters degrees, not just undergraduate degrees, making it easier for young students to continue their studies.
In the wake of Small Business Saturday last weekend, the Government has extended the doubling of Small Business Rate Relief once more.
This benefits over half a million firms and leaves more than 385,000 small businesses paying no rates at all.
At the same time, the Government is stepping up its crackdown on tax avoidance, a subject that rightly annoys people who pay in to the system only to see some corporations attempt to wriggle out of paying their fair share too. We will introduce a 25 per cent tax on multinational profits where they are artificially shifted out of the country. Over the next five years, this will raise over a £1 billion.
These reforms are meaningful steps to remove the hurdles that get in the way for people who want to study, work and buy their own home. They are coupled with a long term strategy for getting public spending under control, reducing the deficit and encouraging economic growth.
Despite the economic warning signs across the globe, this strategy has been shown to be working.