---

Financial Statement and Budget Report

I know how hard it is for the Opposition to listen to arguments for lower taxes. That is the difference.

Because we have asked those with the broadest shoulders to pay a bit more, today I go further. From 6 April, employee national insurance will be cut by another 2p, from 10% to 8%, and self-employed national insurance will be cut from 8% to 6%. That means an additional £450 a year for the average employee, or £350 for someone who is self-employed. When combined with the autumn reductions, it means 27 million employees will get an average tax cut of £900 a year, and 2 million of the self-employed will get a tax cut averaging £650. Those changes will make our system simpler and fairer, and will grow our economy by rewarding work. The OBR says that, when combined with the autumn reduction, our national insurance cuts will mean the equivalent of 200,000 more people in work—filling one in five vacancies, and adding 0.4% to GDP and 0.4% to GDP per head.

This is the second fiscal event in which we have reduced employee and self-employed national insurance. We have cut it by one third in six months without increasing borrowing and without cutting spending on public services. That means that the average earner in the UK now has the lowest effective personal tax rate since 1975. Their effective taxes are now lower than in America, France, Germany or any G7 country. Because Conservatives believe that making work pay is of the most fundamental importance, and because we believe that the double taxation of work is unfair, our long-term ambition is to end this unfairness. When it is responsible, when it can be achieved without increasing borrowing

and when it can be delivered without compromising high-quality public services, we will continue to cut national insurance as we have done today, so that we truly make work pay.

We stick to our plan with a Budget for long-term growth. It delivers more investment, more jobs, better public services and lower taxes. However, dynamism in an economy does not come from Ministers in Whitehall but from the grit and determination of people who take risks, work hard and innovate—not Government policies but people power. It is to unleash people power that today we put this country back on a path to lower taxes: a plan to grow the economy versus no plan; a plan for better public services versus no plan; a plan to make work pay versus no plan. Growth up, jobs up and taxes down. I commend this statement to the House.