We are on the right road and cannot turn back now
The path to economic recovery is long and hard but adopting Labour's proposed solution would be ruinous, says Theresa Villiers
Published 29/12/2012 | 08:00
When the coalition Government came to power in 2010, we inherited the biggest Budget deficit in the UK's peacetime history. As a result, we have had to borrow around £200,000-a-minute and pay £120m-a-day in interest on our debts.
And, as every family knows, the longer you put off paying debts, the worse they become.
So the overriding priority of the Government was to deal with the deficit and avoid the real possibility of a Greek-style financial meltdown.
Because of the tough decisions we have taken, we have reduced the deficit by a quarter. The confidence this has produced has enabled the Government to borrow at rates of interest at near-record lows, keeping mortgage and interest rates down for businesses and families.
There are also signs that the economy is beginning to heal. Growth has returned. Since the election, the private sector has created more than a million new jobs across the UK.
In spite of this, however, the road ahead will continue to be very tough. We are still paying the price of Labour's debt-fuelled boom followed by the biggest bust for 80 years.
That is why I look with consternation at the proposals being put forward by the Labour Party. Take their plans to cut VAT. This would cost £15bn-a-year. Yet there is no explanation how they would pay for it.
Labour's offer is a repeat of what got us into this mess in the first place - more borrowing, more spending and more debt. Labour isn't learning from the mistakes they made. Common sense tells us that you cannot borrow your way out of a debt crisis.
Of course, it's not enough just to tackle the deficit, vital as that is. So we have introduced a range of measures to help hard-pressed businesses and families through these difficult times and ensure that the UK is equipped to succeed in the global race for investment and jobs.
Corporation tax has been cut and by the end of this Parliament will be the lowest of any major Western economy. Our Funding for Lending scheme will help firms to access much-needed finance. Earlier this month, we announced an additional £132m for the Northern Ireland Executive to invest in capital projects.
We have exempted Northern Ireland electricity generators from the carbon price floor, a key demand from the business community here.
Derry/Londonderry will receive the funding to make it a super-connected city, in addition to the same commitment already made to Belfast.
Changes to personal allowances will cut taxes for 615,000 people in Northern Ireland and take 8,000 out of tax altogether. The Chancellor's cancellation of January's planned fuel duty increase means that a litre of unleaded is now 10p cheaper than it would have been had we stuck to Labour's plans.
We are reforming welfare to ensure that people cannot get more on benefits than the average family earns by going out to work.
Next year, the eyes of the world will be on Northern Ireland as we host the G8 summit and welcome some of the world's most powerful leaders.
It provides an opportunity to showcase a modern, optimistic and forward-looking Northern Ireland that is a great place to visit and invest.
There is still a long way to go - for Northern Ireland and the whole of the UK. We are dealing with the toxic legacy of Labour's decade of debt. We're hugely affected by Eurozone instability.
Our recovery is inevitably slowed by a deep-seated lack of confidence across so much of the global economy.
So the path to recovery is a long one and difficult. But we are on the right road and to change course now would be disastrous.