CREATING ECONOMIC STABILITY

The Conservatives are determined to ensure that the British economy is again put on a path of sustained and balanced growth. A pathway to prosperity that is based on genuine economic strength and not on unsustainable debt levels.

This is what the Conservatives will do to rebuild the British economy:

Emergency Budget

A Conservative Government will hold an emergency Budget within 50 days of taking office to set out a credible plan to eliminate in large part the structural current budget deficit over a Parliament. The first measures will start to take effect this year.

Cutting government spending.

Conservatives will protect health spending in real terms and honour our commitments on international aid, but there will be cuts in many other departmental budgets including:
• A one year public sector pay freeze in 2011 (this won’t affect the one million lowest paid workers)
• Bringing forward the date at which the state pension age starts to rise to 66 to no earlier than 2016 for men and 2020 for women
• Stopping tax credits to families with incomes over £50,000
• Cutting spending on Child Trust Funds for all but the poorest third of families and families with disabled children
• Capping the biggest public sector pensions above £50,000
• A 5% pay cut for Ministers followed by a 5 year freeze, and a 10% reduction in the number of MPs.

Creating an Independent Office for Budget Responsibility

This will restore trust in Treasury forecasts. The OBR will provide an independent audit of all Government liabilities, and hold the Government to account for its fiscal promises.

Supporting a savings culture.

We will restore our savings culture and encourage people to save more for retirement by:
• Working with employers and industry to support auto-enrollment into pensions for those on middle and lower incomes.
• Restoring the link between the state pension and average earnings.
• Rewarding those who have saved for their retirement by ending compulsory annuitisation at age 75.
• Raising the Inheritance Tax threshold to £1 million.
• Take 9 out of 10 first time buyers out of stamp duty by raising their threshold to £250,000.
• Over the longer term, reversing the effects on pension savers of the 1997 abolition of the dividend tax credit for pension funds.
• Promoting responsible consumer finance by creating a powerful Consumer Protection Agency, launching Britain’s first free national financial advice service, capping excessive store card interest rates, and ensuring that consumers are given much clearer information on credit card bills and advertising.


• Richard Branson backs Conservative spending plans. On 16 February 2010, the Evening Standard quoted Richard Branson saying:

‘I believe the UK's record budget deficit does pose a serious risk to our recovery. It would be damaging if we lost the confidence of the markets through delayed action and saw interest rates have to go up steeply. We are going to have to cut our spending and I agree with the 20 leading economists who said we need to start this year. The next government, whatever party that is, must set out a plan to reduce the bulk of the deficit over a Parliament by cutting wasteful spending and must not put off those tough decisions to next year. These factors threaten to undermine the confidence of international and UK business, UK consumers and the global financial markets. That could cost jobs and reduce investment in Britain. We must send a clear signal that we have the issues in hand and a clear strategy for UK plc.’

Sir Richard Branson’s support for Conservative economic policy of early action to deal with Britain’s debts is hugely welcome.  As Britain’s best-known entrepreneur, he knows how to create jobs and build an economic recovery.

I am sure the whole country will want to pay attention to his warning that Gordon Brown’s approach could mean lost jobs, higher mortgage rates and less investment in Britain.  Coming just 48 hours after the country’s 20 leading economists made exactly the same argument, the momentum for change is growing every day.