A number of constituents have contacted me regarding the Government’s recent economic announcements.
Firstly I welcome the introduction of the energy subsidy to limit average bills to £2500 for domestic use, on top of the £400 reduction announced earlier which means that on average over the next year consumers will pay £2100 for their energy. Furthermore, those in receipt of means tested benefits will receive an additional £650, all houses in council tax bands A-D will receive an additional £150 payment, those receiving the winter fuel allowance will receive a further £300, and those on disability benefits will receive another payment of £150. The support given to businesses is also incredibly welcome and will help a great number of people across Wimbledon. This is an unprecedented package of support at time when many in our country face real problems due to the rise in fuel costs.
However, whilst there is much to be welcomed in the Government’s recent approach I am disappointed that the Government initially chose now as the time to make cuts to the taxation of those who are best off in our society. I am pleased that they have decided to listen to the many people inside and outside Parliament who expressed concern. It would not have been prudent or morally responsible at this time to make additional borrowing to cut taxes. I hope that the Government will now not cut benefit levels for those in our country who are vulnerable or on lower incomes.
The Conservative Party has a hard earnt reputation as the party of sound money, and I am proud to be a sound money fiscal conservative. We should not borrow to fund tax cuts; any proposals of this kind must be costed and should be paid for. I believe that the country should live within its means, and we have always said we would not borrow to finance day to day spending. Therefore, I think the Chancellor should set out clearly how the UK intends to do this, and I hope he will take an early opportunity to do so.
I am reassured that the Bank of England is acting to secure the position of UK pension funds and is continuing to target 2% inflation.
Growth is important as it determines both the size of the economy and the ability to decide how to distribute. I welcome that the Government has put growth at the heart of its economic ambitions. It is essential that there is transparency in what any policy decision delivers. It is vital the Government implements measures to raise productivity in the economy and long term trend growth rate otherwise any growth is could be a “short term boom” rather than sustained growth.
Early reassurance on these two points from both the Government and the OBR would start to stabilise the financial markets and could negate some of the harm to mortgage payers and industry face from rising interest rates.
Many people will benefit from the planned reduction in the basic rate of income tax from 20% to 19% next April. I am proud to be called a One Nation Conservative and I have always believed we should ensure govern and are seen to govern in the best interests of all the country. I hope the Chancellor will take earliest opportunity to continue the policy of raising the threshold at which people start paying income tax. This would provide a tax cut to all working people, help some of the lowest paid and stimulate growth.
I am continuing to make the case for fiscally sound economic and morally responsible policies to my colleagues in Government and will keep my constituents updated.