Our reforms have one simple principle at their heart – making sure people are better off in work than on benefits.
Nine out of ten working households will be better off as a result of the changes we are making. The average working household will be better off by over £300 a year – that’s the equivalent of a typical monthly shop.
Fixing the welfare system
bullet Introducing the Benefit Cap. This will mean no family that’s out of work should receive more in total benefits than the average family gets in work. It starts this April.
bullet Uprating benefits by 1% Its not fair that out-of-work benefits should rise faster than the incomes of those in work. So we’re increasing discretionary working-age benefits by 1%. This will save more than £2 billion pounds a year. And to ensure that we use our social housing more fairly and effectively, we are ending the spare-room subsidy from this week.
bullet Making work pay. Universal Credit will replace the current complex myriad of means-tested benefits. No longer will it be possible to be better off on benefits than in work. The first pathfinder starts this month.
Helping to create jobs
bullet Cutting corporation tax. When we entered office corporation tax was 28%. On Monday corporation tax was cut to 23%, on the way to 20% – which will make our system the most competitive in the G20. It’s a tax cut for growth and jobs.
bullet We’re introducing new research and development tax breaks so companies can invest in the high technology that is the future of the British economy.
bullet We’ll be abolishing the jobs tax altogether for many hundreds of thousands of our small businesses in the coming year.
bullet The 50p rate of tax is going, because it wasn’t working. Revenues fell, as the wealthy paid less. So we got the worst of both worlds: a tax rate that discouraged enterprise and didn’t raise more money from the rich.
bullet We’re introducing Help to Buy, a dramatic intervention to get our housing market moving. It will help people who can afford to buy but who cannot begin to afford the kind of deposits being demanded today.
bullet We’re delivering results. Over one million private sector jobs have been created in our economy over the last three years. The rate of employment has risen faster here than in the US and three times as fast as in Germany. And last year, more businesses started in this country than in any other year before.
Helping you keep more of what you earn
bullet The biggest tax cut in a generation. From this Saturday, the personal allowance will rise from £8,105 to £9,440. And next year we’re going to increase it to £10,000. 24 million people will pay over £700 less in income tax than when this government came to office.
Predictably, Labour oppose everything we’re doing to clear up their mess – but they offer no constructive alternative.
Bringing Labour’s soaring benefits bill under control means we have been able to protect spending on the NHS and pensioners, cut the deficit by a third and help working families.
That’s the way to protect our future, and make the country fairer too.
Chancellor of the Exchequer
To read the Chancellor’s speech in full, click here: http://tinyurl.com/cpao5nk