My Lords, I am pleased to have the chance to speak in this debate and to comment on the Chancellor’s Budget Statement. We are already seeing the benefits of a strong majority Government, just a couple of months into the new Parliament. Our growth is better than that of any other major advanced economy. We have created 2 million new jobs in the private sector. I look forward to seeing the Government implementing the Conservative Party manifesto in its entirety. Under the last Government, our economy began to get back on track. It is still on the mend, but it will be a long process, and that is reflected by the Government’s intention to run a surplus by 2019-20. Our economy needs to be more resilient and balanced. That is the only way to secure a better future for Britain and for our well-being.
This was indeed a positive Budget. As we move further out of the red and into the black, the Government are able to map out our future rather than just undo the mistakes of the past. I welcome the steps taken by the Chancellor of the Exchequer to trust people more with their own money. Increasing the tax-free personal allowance from £10,600 to £11,000 means that a typical taxpayer will now be £905 a year better off than previously. I place on record my support for the Government’s ambition to increase the personal allowance to £12,500 by 2020. When people work hard throughout their lives, it is only reasonable that this is rewarded and that they are able to provide a stable and secure future for themselves and their families. On this subject, I welcome steps to take the family home out of inheritance tax and to increase the higher-rate threshold to £42,385 to £43,000 next year. Also assisting in this regard will be the 30 hours of free childcare for three and four year-olds from September 2017.
It is my belief that this Government’s work on welfare and employment is one of their greatest achievements. It is important, however, that we remember that employment is not merely a matter of statistics. Every position filled means that another family has the security of a regular pay packet. We must not forget that this pay packet is put back into the economy in both taxation and consumer spending, supporting yet more jobs and growth. Nor should we forget the great benefit to the individual’s well-being. I am sure noble Lords will agree that work gives people pride and confidence. As an employer, I know that people tend to work for two reasons: the first is to earn a living and the second is to get job satisfaction. On the other hand, being out of work sometimes creates depression and has an adverse effect on people. Work is good for people’s mental health, their physical health and their general well-being—benefits that have been demonstrated repeatedly. Dependency is not good for the country or the people. It constrains people and prevents them achieving their ambition. What is more, if we can get more people into work, some of them will receive salary progressions and improve their standard of living.
At this point, I pay tribute to the Secretary of State for Work and Pensions, who has done some marvellous work in government. His most recent success was undoubtedly securing the living wage. The manner in which he greeted its announcement in the other place shows his passion for his portfolio and for improving the lives of working people in our country. The new national living wage of £7.20 an hour from April 2016, rising to £9 an hour by 2020, will really help to secure this.
My only concern is the possible effect that this could have on businesses. I would ask my noble friend the Minister to inform the House in his closing remarks of the assessment the Government have made of this. The cut in corporation tax and the rise in the employment allowance will, I hope, give employers the boost needed to get on and employ more people.
I spoke earlier of the need to rebalance our economy. This rebalancing should be twofold—first, rebalancing between the north and the south and, secondly, rebalancing so that our economy does not rely too heavily on certain areas, such as financial services, at the expense of others, such as manufacturing, which has declined massively in recent years. While some progress has been made, the growth is not enough. I therefore very much welcome Government’s plan to increase apprenticeships. We have already doubled the number of apprenticeships to 2 million, but the intention is to create 3 million more.
I pay tribute to the Government for providing a guarantee to increase the defense budget every year and for creating a joint security fund. I take a great interest in defense matters and welcome these commitments.
Finally, I conclude that this Budget will be good for the country and the British people.