Chancellor George Osborne unveiled the budget aiming to retain power on may 7 general elections. The latest opinion polls show the Conservatives and the opposition Labour are on neck-and-neck.
The chancellor told MPs “Britain is walking tall again” after five years of coalition government. Growth forecasts for 2015 and 2016 were revised up but the projection for 2017 was down.
He said a squeeze on public spending would end a year earlier than planned because of stronger growth and low inflation.
“We took difficult decisions in the teeth of opposition and it worked. Britain is walking tall again,” Osborne said. “Five years ago, our economy had suffered a collapse greater than almost any country. Today, I can confirm: in the last year we have grown faster than any other major advanced economy in the world.”
The Tory chancellor said that after a collapse greater than almost any country five years ago, in the last year Britain has grown faster than any other major advanced economy.
“Five years ago, millions of people could not find work,” he said. “Today, I can report: more people have jobs in Britain than ever before.
“Five years ago, living standards were set back years by the great recession. Today, the latest projections show that living standards will be higher than when we came to office.
“Five years ago, the deficit was out of control. Today, as a share of national income it is down by more than a half.”
“The critical choice facing the country now is this: do we return to the chaos of the past? Or do we say to the British people, let’s go on working through the plan that is delivering for you?”
Mr Osborne told the Commons that the government had met its 2010 target to end this Parliament with Britain’s national debt falling as a share of GDP. He said he would use a boost in the public finances caused by lower inflation and welfare payments to pay off some of the national debt and end the squeeze on public spending a year earlier than planned.
This means that in 2019/20 spending will grow in line with the growth of the economy – bringing state spending as a share of national income to the same level as in 2000.
“The hard work and sacrifice of the British people has paid off,” said Mr Osborne. “The original debt target I set out in my first Budget has been met. We will end this Parliament with Britain’s national debt share falling. The sun is starting to shine – and we are fixing the roof.”