Today, George Osborne addressed the Conservative Party Conference.
He started by pointing out that the debate about economic policy has shifted in the last twelve months. In 2010, 2011 and 2012, people were questioning whether his economic plan would work. Today, with the deficit down by a third, the economy growing and unemployment falling, no-one is asking that question.
The debate has now shifted to the cost of living. George acknowledged that many families wanted to know when they would feel the recovery in their pocket. And he made the key point that the only sustainable route to better living standards is to finish the job of dealing with our debts so that we keep interest rates down, sustain the recovery thereby creating more jobs and the opportunity to reduce taxes.
But the most interesting part of his speech was when he talked about his vision of what we should deal once we have finally dealt with Labour’s debt crisis:
“Surely the lesson of the last decade is that it’s not enough to clean up the mess after it’s happened? You’ve got to take action before it happens. It should be obvious to anyone that in the years running up to the crash this country should have been running a budget surplus. That’s what we mean when we say they didn’t fix the roof when the sun was shining. Let us never make that same mistake again. Never again should anyone doing my job be so foolish, so deluded, as to believe that they have abolished the age-old cycle of boom and bust.
“So I can tell you today that when we’ve dealt with Labour’s deficit, we will have a surplus in good times as insurance against difficult times ahead. Provided the recovery is sustained, our goal is to achieve that surplus in the next Parliament. That will bear down on our debts and prepare us for the next rainy day.
“That is going to require discipline and spending control. For if we want to protect those things we care about, like generous pensions and decent healthcare, and buy the best equipment for the brave men and women who fight in our armed forces, all of us are going to have confront the costs of modern government and cap working age welfare bills.
“And only if we properly control public expenditure will we be able to keep lowering taxes for hardworking people in a way that lasts.
“We also want to go on investing in the essential infrastructure of our country - the roads and railways and science and communications that are the backbone of the future economy. So we should commit, alongside running a surplus and capping welfare, to grow our capital spending at least in line with our national income.
“And for those who ask, ‘Is this necessary?’ I say: what is the alternative? To run a deficit for ever? To leave our children with our debts? To leave Britain perilously exposed to the next storm that comes? This crisis took us to the brink. If we don’t reduce our debts, the next could push us over. Let us learn from the mistakes that got Britain into this mess. Let us vow: never again.’
You can see here the cornerstones of the economic plan of a majority Conservative Government: protecting spending on priority area; continuing to try to reduce the welfare budget; increased investment in the infrastructure of this country and most important of all good financial management - putting money aside in the good times for a rainy day. Most families have been through tough times over the last few years and we’re not out of the woods yet. It is vitally important that the next government doesn’t repeat Gordon Brown’s mistakes so that we don’t end up in this mess all over again.