Fixing the Economy : Coalition Promises in Mid Term Review

http://midtermreview.cabinetoffice.gov.uk/fixing-the-economy/

Deficit Reduction

We will continue to pursue our deficit reduction plan while protecting vulnerable groups and key long-term investments.

Before the summer, we will set out detailed plans for public spending for the 2015/16 fiscal year, in line with the overall path of deficit reduction which we have already set out to 2017/18, to maintain economic stability and credibility, and ensure that we retain the confidence of international markets.

Our Efficiency and Reform Group will support Whitehall departments in delivering £20 billion of savings per year by 2014/15 by bearing down on fraud and error, increasing debt recovery to the Exchequer and continuing the evolution towards government as a single customer when engaging with suppliers.

We will aim to ensure that 25 per cent of government business goes to small and medium-sized enterprises (SMEs) by 2015.

Business Enterprise and Growth

We will take forward our industrial strategy by publishing specific sector strategies in the coming year.

We will further promote the growth of high‑tech industry by:

• completing the network of ‘catapult’ technology and innovation centres in Cell Therapies, the Connected Digital Economy, Future Cities, High Value Manufacturing, Offshore Renewable Energy, Satellite Applications and Transport Systems; and
• promoting the Queen Elizabeth Prize for Engineering to reinvigorate engineering in Britain, and working with the Royal Academy of Engineering and the Technician Council to promote engineering as a profession.

• We will further invest in infrastructure by:
  • expanding our railway programme to create an ‘electric spine’ from Southampton to Yorkshire, electrify the South Wales Valleys railways, establish a western rail link to Heathrow, invest in the Northern Hub and create enough capacity for 140,000 extra daily commutes at peak times by the end of 2019;
  • moving as rapidly as possible towards a national high speed rail network by carrying forward legislation for the first phase between London and Birmingham;
  • accelerating our road building programme: improving the A1, bringing the route from London to Newcastle up to motorway standard; linking the A5 with the M1; improving the M3; and upgrading Junction 30 of the M25 which will support the biggest port development in Europe;
  • upgrading transport in the capital city through Crossrail, Thameslink and by supporting an extension of the Northern Line to Battersea Power Station;
  • supporting the Airports Commission, led by Sir Howard Davies, in its work of identifying the best way of maintaining the UK’s global aviation hub status, as part of a strategy for building cross-party consensus to ensure that the right long-term decision is taken in the national interest;
  • making available debt guarantees to support up to £40 billion of privately financed infrastructure investment;
  • pressing ahead with a series of changes to planning rules and other bureaucratic requirements, to allow faster implementation of infrastructure projects;
  • providing capital for the expansion of good schools, for building new Free Schools and Academies and for improving further education colleges; and
  • auctioning 4G spectrum licences and creating the best super-fast broadband in Europe by 2015, with 90 per cent of premises having access to superfast broadband, and a minimum of 2Mbps available across all of the UK, including rural areas.
• We will boost the rate of house building by:
  • creating a debt guarantee scheme for up to £10 billion to support increased building of both new affordable homes and homes for private rent;
  • supporting first-time buyers through an extension of the FirstBuy equity loan scheme, as well as continuing to champion the NewBuy scheme to increase the availability of mortgages on new build property;
  • removing restrictions on developers, so that those who can prove that a council’s affordable housing requirements make a project unviable will see such requirements reduced or removed; and
  • bringing more empty homes back into use, supporting the release of public sector land and reducing planning delays in order to accelerate major housing projects.
• We will further promote regional and local growth by:
  • devolving a greater proportion of growth-related spending to local areas as recommended in Lord Heseltine’s report;
  • pursuing a second wave of City Deals, to give more British cities the power to strengthen their local economies; and
  • investing further through the Regional Growth Fund.
• We will continue to improve the corporate tax system and provide funding for business by:
  • cutting corporation tax to 21 per cent – the lowest rate in the G7 – by 2014; and
  • fully implementing the Funding for Lending Scheme to get credit flowing into the real economy.
• We will help small businesses by:
  • reducing the small companies tax rate to 20 per cent, instead of the previous Government’s plan to increase it to 22 per cent;
  • providing a further extension of Small Business Rate Relief from April 2013 to give targeted support and cash flow benefits;
  • providing temporary relief from empty property rates;
  • providing a significant temporary increase in the Annual Investment Allowance, from £25,000 to £250,000 for two years;
  • creating a Business Bank to bring together support for SMEs and to deploy additional capital of £1 billion together with guarantees that will address long-standing, structural gaps in the supply of finance; and
  • promoting Supply Chain Finance to provide easier credit for SMEs.
• We will aggressively pursue our deregulation agenda by:
  • moving to a ‘one-in, two-out’ rule from January 2013, having successfully run a ‘one-in, one-out’ rule for new regulations;
  • completing the work of the Red Tape Challenge to remove or improve 3,000 regulations over the lifetime of this Parliament;
  • introducing a binding new code for local authorities which will remove hundreds of thousands of low-risk businesses from unnecessary, regular health and safety inspections and scrapping or improving 85 per cent of health and safety regulations; and
  • implementing the Penfold Implementation Action Plan in full to ensure development is not impeded by over-mighty statutory consultees.
• We will make further improvements to labour markets by:
  • extending the right to request flexible working to all employees and creating a system of shared parental leave;
  • introducing a new employment status of ‘employee shareholder’;
  • introducing new settlement agreements to provide speedy resolution of workplace disputes without the risk that the offer of such an agreement could be used to bring about an unfair dismissal claim;
  • taking forward many of the recommendations of Graeme Nuttall’s independent review of employee ownership in 2013;
  • reducing vexatious employment litigation by introducing fairer rules for Employment Tribunals; and
  • reforming the operation of Employment Tribunals, as proposed by Mr Justice Underhill.
• We will further promote exports by:
  • expanding UK Trade & Investment to enable it to: support more SME exporters; provide more intensive support to help UK exporters win high-value contracts overseas; and use private sector delivery partners, such as overseas chambers of commerce, to help exporters and target potential inward investment into the UK;
  • establishing a UK Export Finance £1.5 billion direct lending facility to provide loans to overseas buyers who purchase capital goods and services from British exporters; and
  • pursuing our ambition to double UK exports to £1 trillion per year by 2020 through every means at our disposal.

Banking

We will legislate to implement the main recommendations of the Vickers Commission on Banking, and have already published draft legislation.

We will introduce any necessary amendments to legislation arising out of the Parliamentary Commission on Banking Standards, including any necessary new criminal offences and associated penalties.

We will promote competition in the high street by making it easier for customers and businesses to switch banks.

Personal Taxation

We will continue to increase the personal income tax allowance towards £10,000, making real-terms steps each year towards meeting this policy objective.

We will legislate for the implementation of a General Anti-Abuse Rule in the 2013 Finance Bill.

We will, with further investment in anti-avoidance and evasion activity, aim to raise an extra £2 billion a year, achieving £9 billion more a year by the end of this Parliament. In addition, as a result of the recently announced UK–Swiss agreement, we expect to raise more than £5 billion in additional tax from Swiss bank account holders who are liable for UK tax.

Cost of Living and Consumer Protection

We will legislate to ensure that consumers get the lowest energy tariff to suit their circumstances.

We will introduce a Consumer Bill of Rights to give consumers clearer rights in law and to ensure that consumer rights keep pace with technological advances.

We will ensure that regulated rail fares and Transport for London fares do not rise on average by more than 1 per cent above the Retail Prices Index in 2013 and 2014, and will modernise fares and ticketing to give passengers a better deal through greater choice and flexibility.

We will empower consumers to make informed choices by giving them access to data collected and held by businesses.

We will consider the case for extending the rural fuel discount scheme to remote mainland communities.

We will strengthen protection from rogue bailiffs who use unsound, unsafe or unfair methods, while at the same time making sure that debts can still be collected fairly.

Jobs and Welfare

We will begin the implementation of the Universal Credit with a new ‘claimant commitment’, which will clearly set out the expectations on claimants as well as the consequences for those who fail to comply. This will, for the first time, make job search and job preparation a full‑time activity by default. In the meantime, we have tightened the rules around Jobseeker’s Allowance to ensure that claimants really are actively seeking work and to sanction those who are not.

We will provide new work opportunities to young people through the Youth Contract – combining wage subsidies, apprenticeships, work experience and sector-based work academy places.

We will introduce the Personal Independence Payment, a new benefit which will be objectively assessed and will enable disabled people to lead full, active and independent lives.

We will provide start-up loans and business mentors to unemployed people wishing to set up their own businesses. We have provided funding for around 40,000 businesses to be set up under the programme by 2015.

We will continue to support the National Minimum Wage because of the protection it gives low-income workers and the incentives to work it provides.

We will continue to keep our Coalition Agreement commitment to protect key benefits for older people throughout this Parliament.

Universities and Further Education

We will give our world class universities more freedom to compete by giving them more control over the number of highly qualified students they can admit, and we will require the publication of key outcome information – such as destinations, wage levels and student satisfaction – to guide applicants’ university choices.

We will ensure that the FE and apprenticeship systems meet the needs of British business by implementing the Wolf reforms and raising standards in line with the Richards Report.

We will increase the rigour of FE by reforming qualifications to recognise those of the highest quality – reducing the confusion that is caused by the multitude of qualifications at present.

We will introduce, from this August, Advanced Learning Loans for people aged 24 and over.

We will ensure that skills provision is more responsive to employer demand and is in line with the long-term vision of key sectors set out as part of the industrial strategy.

We will introduce traineeships to support young people into work.

We will invest an additional £920 million in UK science research infrastructure, as set out in the Autumn Statement.

Energy and Climate Change

We will, through a stable levy control framework, treble support to low carbon energy up to 2020.

We will implement a gas strategy that gives gas fired power a major future role in our energy mix, legislate for an Emissions Performance Standard, and complete the commercial negotiations for the world’s first large scale carbon capture and storage projects.

We will encourage the exploitation of shale gas by developing a targeted tax regime for the industry and by ensuring that regulation is properly co‑ordinated through a new single Office for Unconventional Gas and Oil.

We will provide certainty on the tax relief available for North Sea oil and gas decommissioning, enabling further investment to take place.

We will keep the Renewable Obligation Certificates regime open for new projects until 2017 and implement our Electricity Market Reform mechanisms to support renewable energy and ensure that Britain meets its 2020 obligations under the Renewable Energy Directive.

We will seek to bring forward the first nuclear power stations in the world without public subsidy.

We will begin mass roll-out of smart meters in 2014, complete installation by 2019 and work with the national grid to deliver the ‘smart grid’.

We will launch the Green Deal in January 2013, including a £125 million cash‑back scheme to encourage energy efficiency improvements by households and businesses.

We will continue to support green investments through the Green Investment Bank.

We will promote the electrification of the car fleet.

Europe

We will insist on a tough, fiscally responsible outcome of the negotiations on the next EU seven-year budget framework, continue to make the case for Common Agricultural Policy reform and prevent any changes to the British rebate.

We will continue vigorously to defend Britain’s interests in the negotiations on a banking union and protect the competitiveness of the City of London and UK financial services. The safeguards that we have achieved in the initial banking union negotiations set a crucial precedent, and will protect countries such as the UK which are not part of the single supervisory mechanism. In particular, the European Central Bank Governing Council agreed a non-discrimination clause to guarantee the position of countries, such as the UK, that have their own currencies, and it also agreed that voting on key issues in the European Banking Authority will be taken by a ‘double simple majority’ of members.

We will publish a series of analytical reports as part of our comprehensive review of the balance of competencies with the EU. The review will conclude by the end of 2014.

We will continue to lead the EU growth agenda – with the aim of removing unnecessary regulations particularly for small and innovative companies, deepening and widening the single market and liberalising trade, notably by negotiating a free trade deal with the US.

We will work with others to press for changes to the Working Time Directive to reduce its damaging consequences for the NHS, and will insist on maintaining the right of UK citizens to opt out of its provisions.