Liz Truss
We understand that people are weary of austerity, but we must continue to live within our means
ALabour government that spent money it didn’t have; half a million more people out of work; queues outside the banks; people leaving offices with cardboard boxes full of their possessions. It’s almost 10 years since the 2008 crisis, but we all still remember the consequences of ignoring threats to the public finances. We are still living with them, and as Chief Secretary to the Treasury it’s my job to make sure we keep spending under control, while continuing to invest in our excellent public services.
Yesterday the Office for Budget Responsibility published its first Fiscal Risks Report. It was a stark reminder of the dangers of losing control of spending, and the devastating impact that can have on families. The national debt today is equivalent to a staggering £62,000 per household, thanks to the unprecedented deficit that the Labour government left us with, which saw us spend £4 for every £3 we raised in tax.
We’ve made great progress – cutting the deficit by three quarters – but this report is a reminder that there is more to do. We don’t know what’s around the corner – and we must do everything to ensure we get our country’s debts down, building our resilience so we don’t repeat the mistakes of the past.
We do that by keeping control of the public finances and keeping taxes low, making sure every extra hour of work pays and encouraging more people to establish and grow businesses. It is right that people and businesses retain as much of their own money as possible so that they have the freedom to innovate and invest in the future. Compare that to Labour, who the independent IFS say would increase tax to the highest levels in our peacetime history. That would be a disaster for our country.
Instead, we are able to secure economic growth to fund the public services we all rely on. The Government’s public spending levels compare well with other countries. The UK spends more on education as a share of GDP than Germany, France or Italy. Some £110 billion will be spent on the NHS this year
– this is over 7 per cent of GDP, and well above the OECD average. Our defence spending is higher than our European counterparts.
Our public services and the great people who work in them are improving lives. Some 130 more people are starting cancer treatment every day, ensuring the highest-ever UK cancer survival rate. Crime is down by a third, and public satisfaction with local police is the highest on record. There are more young people being taught in good or outstanding schools, securing apprenticeships, and attending university.
We heard the message in the election and understand that people are weary after years of hard work to rebuild the economy. But as the OBR report demonstrates, it’s also vital that we live within our means. So we will stick to our plan to continue to get the deficit down and the debt falling as a share of GDP in 2020-21, and the OBR forecasts we are on track to meet our fiscal targets. We have come a long way since 2010, and we will build on that progress, investing in infrastructure and skills to strengthen the economy and ensure people have access to the high-skill, high-paid jobs of the future.
Meanwhile, Labour have learnt nothing from their mistakes. The IFS estimate the national debt would be more than £100 billion higher by the end of this Parliament with Labour in power, and that’s without all the costly nationalisations they’ve promised. Only this week, the shadow education secretary, Angela Rayner, admitted that Labour’s student debt write-off would cost a further £100 billion. Their plan – to take us back to the uncontrolled spending that caused the mess in the first place – is a betrayal of every hardworking family, every hopeful young person, every job-creating business in the UK.
We will not take those risks with people’s livelihoods. Instead we will continue to live within our means, invest in and modernise our public services, keep taxes low and allow enterprise to thrive. Only then can we remain an ambitious, outward-looking country, creating opportunities for the next generation and fostering truly world-class public services.