The recession of 2008 and the years that followed had a devastating effect on people’s finances. Unemployment soared and many factories reduced hours, preserving jobs but depressing pay. This was the situation I and my Lib Dem colleagues found ourselves in, when we entered government in 2010. These days Labour make it a habit to mention the “cost of living crisis” whenever possible and of course also have a habit of not mentioning any of the improvements this government has made in cleaning up the mess left by their previous administration.
In the last four years the economy first stabalised and then set off on an upward trajactory of growth – the strongest of any major European economy. Lib Dems in government have ensured that the benefits of the economic recovery are shared fairly.
For us, the best way to tackle a cost of living crisis is to get people back into work. Unemployment has been falling steadily for the last two years and both in Bristol and around the country is now well below the levels we inherited in 2010. Liberal Democrats have boosted pay packets by allowing people to keep more of the money they earn, by raising the income tax threshold to £10,000. With over 1.5million private sector jobs created and an average £700 tax cut for ordinary working people, we have delivered on both jobs and net pay. In April 2015 the income tax threshold will be raised again, allowing people to keep £10,500 free from tax. This is a tax cut of £800 compared to 2010 levels, an extra £15.40 a week for people to spend how they choose.
In addition to stabalising the economy so businesses can create jobs, we have been championing our key manifesto policies regarding apprenticeships and so far more than 1.6 million new apprenticeships have been created.. Providing this valuable training and work experience for young people is essential to helping them get a good start in life after full-time education.
Figures released on July 16th show that unemployment in Bristol West is now down 22.56%since the election in May 2010, which is in stark contrast to the 55.6% increase in unemployment we saw during the last Labour government. This is in addition to the 173,000people who have received a cut in income tax, with 17,500 people being taken out of income tax altogether in Bristol. It is our long term goal to increase the threshold to the point where anyone earning minimum wage will pay no income tax at all – a minimum wage that we are raising again in October this year. A young person on the minimum wage is already receiving all pay free from income tax.
However, this is not all we are doing to help households. Since 2010, an average family has paid£600 less in Council Tax thanks to Lib Dems giving councils the ability to freeze Council Tax for up to 6 years. We are also cutting, and then freezing,fuel duty and this is to save motorists 20p per litre compared to the previous government’s plan. By the end of this parliament, fuel duty would have been frozen for nearly four and half and half years, the longest fuel duty freeze in more than two decades.
Energy prices are, of course, also a major concerns for many people so we have been active in tackling the squeeze felt by people’s finances due to energy bills. We have already cut £50 a year from bills while maintaining our commitment to green policies and support for millions of low-income and vulnerable households through the new Energy Company Obligation, the Warm Home Discount scheme, and our support for Winter Fuel and Cold Weather Payments.
Finally, I would like to outline how we are helping the cost of living for those with children. Under plans announced in March by Nick Clegg, working parents struggling with the cost of childcare will be able to claim back 20% of that cost – up to £2000 per child. This will support the self-employed and will ensure that those working part-time, earning £50 a week and above, those on maternity, paternity or adoption leave and those starting their own businesses will get help with childcare costs for the first time. For those on Universal Credit, the Government will cover 85% of childcare costs, up from the previous 70%. This will mean that in Bristol over 12,600 families will be able to benefit from our changes to tax-free childcare.
This is on top of the fact that we have already increased free entitlement to childcare and early years education for all 3 and 4 year olds from 12.5 hours to 15 hours a week. From September this will also be extended to the most disadvantaged 40% of 2 year olds while more help for families will be provided through the key Lib Dem policy of free school meals. Free school meals for all infant age pupils will help save families around £400 per year per child.
I believe that whilst the Labour party’s ‘cost of living’ agenda raises some important questions, it ignores the significant progress that has been made by Liberal Democrats not only to rebuild our economy but also to support the most vulnerable in society. Of course, we cannot be complacent and there is much more to be done to rebalance social and economic inequalities. However, I am proud that we have been able to dramatically reduce unemployment. I am proud that we have put the most vulnerable at the heart of our economic policies. And I am proud that, as part of the Coalition, the Lib Dems have been central to improving the cost of living for millions of people – whether through less tax, a higher minimum wage, help with energy bills or help with childcare costs.