Chancellor's speech: Unleash Britain's potential

Image by Christopher Furlong/Getty Images. 

 

It’s great to be back here in Manchester…

 

…. and out of Westminster.

 

We didn’t call this election because we want one.

 

We want to get on with governing…

 

…and we know the next few weeks are going to be tough.

 

But we’re going back to the people…

 

…because we have to end the political paralysis that has gripped this country for more than three years.

 

And the only way to do that is to break the deadlock in parliament.

 

We must end the dither and delay.

 

And get Brexit done. 

 

That’s the most important thing our economy needs right now.

 

And now we can, because the PM’s got a good deal on the table.

 

That was a huge achievement that so many said wasn’t possible.

 

This Deal is good for our democracy - and good for our economy.

 

A strong economy ultimately depends on a strong democracy.

 

Getting this deal through will give businesses confidence and certainty so that they can plan and invest for the future.

 

I talk to business, I hear their concerns.

 

By far the biggest fear of business is a Corbyn led government.

 

One of the prizes of this election is the chance to end that threat…

 

… defeat Corbynism on December 12th and they’ll be gone for good.

 

And now that we have a Deal, we can finally provide that certainty on Brexit too.

 

Businesses, like the rest of us, have deadline-fatigue.

 

We’ve all had enough of that.

 

We can finally see the light at the end of the tunnel.

 

But Labour and the LibDems want to keep extending the tunnel.

 

The Governor of the Bank of England has said the Deal is positive for the economy.

 

And the certainty of a positive deal will unleash new private sector investment in our economy.

 

We’ll all benefit from that Deal dividend.

 

Then we can focus on the people’s priorities…

 

...and priming our economy for the opportunities outside the EU…

 

… including a best-in-class free trade agreement.

 

All that is put at risk with a vote for Labour, the LibDems or the SNP.

 

So I wanted to take this opportunity right at the outset of this campaign…

 

… to address the key questions that people up and down the country will rightly be asking.

 

What is the state of the economy? 

 

What’s the difference between the Tories and our opponents on how we think our economy should be managed and run? 

 

And most importantly, what does that mean for me and my family? 

 

 

Later today, the Bank of England will give its latest economic forecast.

 

Forecasts vary, and there are some serious global headwinds and challenges…

 

... but it’s clear that the fundamentals of the UK economy remain strong. 

 

Our economy has confounded expectations. 

 

Nine consecutive years of economic growth.

 

Rising wages. 

 

Record employment.

 

We’ve seen 1,000 jobs created every single day.

 

Absolute poverty at its record low.

 

Income inequality is lower than Labour left it in 2010.

 

We’ve promoted productivity, created job opportunities and driven growth in the economy. 

 

And the IMF predicts that, next year…

 

… the UK will grow faster than France, Germany, Italy and Japan.

 

That hasn’t happened by accident.

 

Just look at where we were back when I was first elected to Parliament in 2010.

 

The new Conservative government had just inherited the highest levels of borrowing in Britain’s peacetime history.

 

A deficit equal to 10% of GDP…

 

…that’s equivalent to borrowing £5000 every single second.

 

An economy scarred by Labour’s Great Recession…

 

…the deepest in almost one hundred years.

 

And the worst banking crash, not just in British history…

 

… but global history.

 

The transformation from where we were then…

 

… to where we are now…

 

… was not the result of some fiscal cycle or economic inevitability.

 

It’s down to solid economic stewardship by successive Conservative governments.

 

The hard work and sacrifice of the British people.

 

And an incredible effort by British businesses of all shapes and sizes.

 

Together, we have laid a foundation on which…

 

… with the right decisions, the right policies…

 

… we can build a decade of growth, of opportunity, of prosperity for all.

 

Not just more jobs and higher wages…

 

… but more investment in our schools…

 

… in our NHS…

 

…in our environment…

 

… and in the rail, road and digital infrastructure we all rely on.

 

That’s the kind of future I want to see for my kids, for your kids, for our country.

 

But, just as the UK’s economic miracle did not happen by accident…

 

… that future is not guaranteed.

 

And that’s why this election is so important.

 

Because we can only bring about that future with the right government.

 

Not a government of endless debt and failed ideology.

 

But a sustainable, responsible government…

 

A Conservative government.

 

And if you want to see what the next decade could look like…

 

… just look at the trail we’ve blazed in the past 100 days.

 

We are taking the country forward from a decade of recovery to a decade of renewal.

 

In my Spending Round in September we were able to give a £13.4 billion boost to the people’s priorities. 

 

It meant money for 20,000 new police officers…

 

…20 new hospital upgrades…

 

… and levelling up of school funding across the country. 

 

It also included £2.2 billion for our Armed Forces…

 

… and an extra £1.5 billion on social care.

 

I’m extremely proud of how much we were able to achieve in such a short time…

 

… and the lasting impact those decisions will have.

 

Public services were a lifeline to people like me when I was growing up. 

 

We must nurture them so future generations can say the same.

 

That doesn’t mean we believe in an ever-expanding state.

 

For Conservatives, that is neither moral nor sustainable.

 

We believe in social responsibility and sensible stewardship.

 

This year’s Spring Statement identified £27 billion of headroom.

 

I chose to use half of that. 

 

A sound framework continues to be essential.

 

And as I said in my Spending Round…

 

… historic low borrowing rates means we need to adjust our framework to fund a decade of renewal.

 

Incredibly, at the moment, we can borrow in real terms at negative rates…

 

…meaning it is a responsible time to invest.

 

And there is a growing consensus around the world that the time is right to do it…

 

… as I saw when discussing this at the IMF.

 

So today, I am announcing new fiscal rules that, if elected….

 

…. will allow us to take advantage of the opportunity to invest in our future and our public services…

 

… without squandering the hard work of the British people.

 

 

Like anyone who budgets…

 

… whether in a household, a small business or a big firm…

 

… I know we must keep track of what we’re spending and what we bring in.

 

We can’t run an overdraft forever on our day-to-day spending.

 

So I can confirm our first rule will be to have a balanced current budget.

 

What we spend cannot exceed what we bring in. 

 

Now, while we must maintain spending restraint…

 

… if we want growth to continue in future then we need to invest in it.

 

Taking the opportunity offered by those historically low borrowing rates.

 

In our manifesto, and at our first Budget in the new year…

 

…we will announce new plans to level-up the entire United Kingdom…

 

… from Manchester to Midlothian…

 

... spreading opportunity and renewing the fabric of our nation.

 

New hospitals, schools, roads, railways, better broadband…

 

 

 

 

 

New connections and opportunities in every part of our nation.

 

So I can confirm today we will borrow some more to invest.

 

We know all too well what happens if debt gets out of control. 

 

Excessive debt would risk everything the British people have worked so hard to repair over the past decade of recovery.

 

The question at this election is who do you trust to protect that?

To build on that?

 

It’s why our second rule will ensure we can invest more,

but also continue to live within our means.

 

Investment in long-term projects like roads and railways will not exceed 3% of GDP.

 

Compared to a long term average of around 1.8%...

 

… that represents a step-change in what we currently invest.

 

It means billions of pounds more to spend on the infrastructure revolution this country needs…

 

… on projects like the Terminal 2 expansion here at Manchester airport…

 

…the biggest construction project in the region.

 

And yes, let’s rekindle the ambition that saw us develop the world’s first supersonic jetliner.

 

This step-change of infrastructure investment will prime the UK economy for the long-term, providing the opportunities future generations deserve.

 

But it also strikes the right balance with keeping debt in check.

 

The combination of these rules means debt will never be allowed to get out of control.

 

Unlike Labour, we won’t kick the can down the road…

 

… leaving another toxic legacy of debt for our children and grandchildren to deal with.

 

As we set out the detail of our plans, it will be clear debt will be lower in the medium term…

 

…meaning it will be lower at the end of the next Parliament than it will be at the start.

 

Now, we can borrow cheap because rates are low…

 

…and I expect them to stay low for some time.

 

But the cost of servicing our debt should never be allowed to spiral out of control either…

 

… putting the burden on taxpayers.

 

So our third rule means that if borrowing costs rise significantly in future…

 

…and what we’re paying to service debt starts to exceed historical averages…

 

…we would re-assess how much we should be borrowing for capital projects.

 

This extra safeguard ensures we will spend the money and manage costs responsibly. 

 

Rules to control borrowing.

 

To control debt.

 

To control debt interest.

 

New rules for a new economic era. 

 

I’ll set out more details of the rules in the next budget. 

 

But my mission at No11 is ultimately about more than numbers and rules. 

 

Economic growth means nothing if it doesn’t mean more jobs…

 

… more money in people’s pockets…

 

…stable prices in the shops.

 

It’s about ensuring the state doesn’t take a penny more than it needs to run good services.

 

It means making sure the cost of living is more affordable for families. 

 

We have the record:

 

We’ve doubled free childcare to 30 hours a week for working families of three and four year olds.

 

We’ve increased the amount someone can earn before their Universal Credit is reduced…

 

… making 2.4 million working households better off.

 

And we’ve also taken 4 million of people out of income tax altogether by raising the personal allowance.

 

Most importantly, managing the economy is about people having good jobs with a fair wage to live off.

 

That’s why as Business Secretary I introduced a National Living Wage.

 

And why, as Chancellor, I’ve announced plans to increase it to two-thirds of median earnings….

 

… taking it up to £10.50…

 

… and extending it to workers aged over 21.

 

That’s how we will end low pay in our country by 2024.

 

We’ll be one of the first nations anywhere in the world to do so…

 

…a legacy we can all be very proud of.

 

 

Anyone who understands economics knows that public and private go hand in hand.

 

They’re mutually reinforcing.

 

I got ahead because of family, hard work and public services.

 

But Conservatives understand it’s a dynamic free market that is the single best way to fund those public services.

 

And if people are going to carry on starting businesses…

 

… carry on creating jobs…

 

… carry on paying the taxes that fund our schools and our NHS…

 

… then they need to know government is on their side.

 

Because starting, running and growing a business is one of the hardest things in the world.

 

I remember when I was a boy and my family of seven shared a two bed flat we were just getting by.

 

My parents were running the shop downstairs and every night I’d help Dad count his takings on the dinner table.

 

And even then, as a kid, I could see whether the piles of notes and coins were bigger or smaller than we needed them to be.

 

Whether we’d have a proper family dinner on Sunday or have to skimp a little that week.

 

And while the numbers are now more likely to be on a spreadsheet or a mobile phone than on the kitchen table…

 

…that’s still everyday life for all small businesses.

 

So I’m proud that this government is making it that little bit easier for you.

 

Proud that we’re committed to doing more to help firms prosper.

 

So we’ll keep the cost down for businesses…

 

… since 2016 we’ve confirmed plans to slash £13 billion from business rates.

 

Since 2010 we’ve introduced more than 100 measures to tackle aggressive tax avoidance and evasion.

 

And we are continuing to make our tax system simpler –

and, most importantly, fairer.

 

That shows we are both the party of business and the party of workers. 

 

Because, unlike Labour, we never take taxpayers’ money for granted.

 

Labour believe your money belongs to the government, unless they graciously give it back to you.

 

Conservatives believe that your money is your money.

 

Labour believe that taxes should be as high as possible,

that people should be punished for doing well.

 

Conservatives believe that you ultimately raise more by taxing less…

 

… and that if you work hard and get that promotion and pay rise, the state shouldn’t leave you worse off.

 

And, as I said earlier, that’s why this election is so important.

 

It’s not just a choice of who governs Britain…

 

… but whether you want that government to make this country stronger, richer and more united…

 

… or more indebted and more divided than ever.

 

John McDonnell likes to claim he won’t raise taxes on anyone earning less than £80,000.

 

But it’s just not true.

 

They cannot be trusted.

 

It’s easy to poke fun at Comrade Corbyn and his fantasy economics.

 

But this will be a close election and I am taking nothing for granted. 

 

We won’t let Labour off the hook like last time.

 

Look to the lessons of history…

 

… they’ll ruin our finances, raise your taxes and saddle the next generation with debt.

 

Every single Labour Government has left our country’s economy in a mess.

 

Some of you may remember the Winter of Discontent in 1979. 

 

Where rubbish piled up on the streets and bodies went unburied.

 

Or those of you who are younger can think back to the aftermath of the financial crash in 2008. 

 

Where an arrogant and out of touch Labour government took its eye of the ball…

 

…and allowed the economy and our public services to come to the edge of ruin.

 

We’ve spent a decade recovering from that one.

 

It’s taken years of responsible Tory management…

 

… and hard work by the British people…

 

… for wages and living standards to get back to pre-crisis levels.

 

Last time, after promising to stick to Tory spending plans initially…

 

… it took 13 years for Labour to completely mess it up.

 

This time it won’t even take them 13 months.

 

Just listen to the things McDonnell is openly proposing.

 

Spending billions on renationalising vast industries…

 

… but without paying market rates to their owners.

 

Those owners aren’t tycoons - they are mostly small investors

and people with pensions.

 

He told savers and businesses he had nothing up his sleeves…

 

… but then announced plans to confiscate £300 billion of shares from private investors. 

 

That would be one of the biggest ever state raids on the savings of hard working people.

 

That’s not socking it to the rich…

 

That’s stealing private investments.

 

And who owns most of those investments?

 

Your pension funds.

 

He claims he will hike taxes on the richest in our society.

 

But he can’t explain who will pay for our services when some of the people who pay more than a quarter of all income tax go elsewhere.

 

Under the Conservatives, the top 1% pay more tax than they ever have before.

 

Labour’s punitive tax rates haven’t worked in the past, and won’t work now.

 

And who will have to pay the price?

 

Not them. 

 

But ordinary working people like you.

 

Because Labour can’t even begin to attempt to meet their commitments without raising your taxes…

 

…hiking your bills…

 

…and letting prices run wild in the shops. 

 

And not only that, but they cannot get into government without selling out our Union.

 

Corbyn has never cared about the United Kingdom.

 

The only deal he will prioritise is with the SNP.

 

What’s not for him to like about a party that has the highest taxes in the UK…

 

… and neglected public services in pursuit of an ideological agenda?

 

We can’t let 2020 be the year of two re-run referendums.

 

That’s the last thing our economy and democracy need.

 

No more second-guessing, no best of three –

one nation moving forwards together.

 

We are 35 days from the day that will decide how this country looks for the next decade and beyond.

 

35 days in which to decide whether we want to build on the strong foundations laid by the Conservatives and the British people…

 

… or let Corbyn and McDonnell tear the whole thing down.

 

That is the choice before the nation.

 

Whether December brings a Merry Christmas,

or a new Winter of Discontent.

 

A Labour Party determined to wind back the clock, waste billions, and raise taxes.

 

Or a Conservative Government with the track record to deliver a decade of renewal.

 

Helping working people.

 

Cracking down on the cost of living.

 

And getting Brexit done.

 

Voting Conservative is the only way to end the double-whammy of uncertainty posed by a prolonged Brexit…

 

…and the prospect of the hardest-Left government of any major Western nation. 

 

With our responsible but ambitious agenda we will level up across the country…

 

… so that we can unleash our potential as a nation in the years ahead…

 

… and so that everyone has the chance to unleash their potential.

 

With this new economic plan for a new era. 

 

I truly believe the 2020’s will be Britain’s best decade yet.

 

Thank you very much.