Priti Patel MP is Exchequer Secretary to the Treasury
The Conservatives came to power in 2010 with an economy on the rocks. The country had just been through the longest and deepest recession it has faced since the war, and years of inefficient and ineffective spending meant the deficit was at a record peacetime high. As the departing Chief Secretary to the Treasury put it: there was ‘no money left’.
That is why straight away we made a realistic assessment of the state the country was in, and set about our long-term economic plan to turn Britain around. By reducing the deficit, cutting income tax, creating more jobs, capping welfare, and delivering the best schools and skills for young people we had a clear path set out to build a stronger, healthier economy.
Since then, working to that plan, the Conservatives in Government have made tremendous progress in cleaning up the fiscal mess we inherited and getting the economy going. Growth is now expected by the OBR to reach 2.7% in 2014 – up from the Autumn Statement 2013 estimate of 2.4% – and the fastest rate of any major advanced economy.
By taking the difficult decisions and cutting away at inefficient and ineffective spending the deficit is down – now by over a third. That is real progress, and it makes a real difference to people's lives, keeping mortgage rates low and safeguarding the economy, so businesses have the confidence to invest and create jobs.
We are seeing this take effect, with business investment increasing by 5% in the first quarter of this year, meaning that investment has grown for five consecutive quarters for the first time since 1998. It is equally encouraging that the OBR forecasts business investment to continue growing strongly through this year to the next by 8% and 9.2% respectively.
To keep this momentum going, this Government has cut corporation tax to make it the lowest and most competitive rate in the entire G7. As part of our commitment to creating a more business-friendly environment, we will have streamlined the main rate and the small profits rate of corporation tax so there will be a single headline rate of 20% by next year. By comparison, Germany's 2014 corporation tax rate is 29.5%, while France's is 33.3%. This is just one example of many measures that the Conservatives have introduced to attract more investment and business to the UK and to provide the essential low-tax stability that helps businesses grow and succeed in this country.
This is feeding through into what matters most for making families more financially secure: jobs. There are now more than 1.8 million people in work since the last election – with employment at a near record high. Over the last year, employment growth in the UK has been the highest of all G7 countries, and with over 2.1 million private sector jobs created under this Government, national unemployment has fallen to 6.2% – the lowest since the great recession.
The recovery is also balanced across all main sectors, with manufacturing, services and construction all growing by over 3% in the second quarter on a year earlier. The Labour Party and our political opponents said this would not be possible, but unlike Labour, the Conservatives trust the entrepreneurial strength of Britain's businesses, which is why we have backed them every step of the way. A more balanced economy is a stronger one, which is more secure for the future.
It is clear that our plan is working, and that is why for the remainder of this parliament we will keep working through it, so that the deficit will fall further, employment will keep rising as we work towards full employment, and firms can keep growing and prospering. By building a stronger, healthier economy, we are ensuring that hardworking taxpayers can look forward to the future with greater peace of mind and security, and delivering a better and brighter future for Britain.