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After the UK Parliament rejected her Brexit plans for the third time, UK Prime Minister Theresa May has decided to step down as leader of the Conservative Party.
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Home » Edinburgh, International

Delivering economic stability to Scotland

Submitted by on 27 Sep 2010 – 10:09

Photo: Scotland Office

By Michael Moore MP, Secretary of State for Scotland

For political parties, governing is always a challenge.  Ministers must have a clear understanding of the changes that they want to bring about and the means by which they will do it.  The aim must always be to make our country a better place.
For Liberal Democrats, in the UK government for the first time since the wartime coalition, that means shaping a fair, free and open society.  We want every individual to be respected for who they are and equipped with the tools and choices they need to live the life they choose.
Our party has always believed that government must play its part in making this happen.  But in 2010, that challenge of governing is greater than it has been for generations.
The outgoing Labour government racked up the highest public debt in peacetime history.  Every householder knows that when you close your eyes and ears to mounting debt, the problem simply gets worse.  As Labour’s Treasury minister Liam Byrne put it in his goodbye letter: “There is no money left”.
So while just one party created this economic mess, two have come together to solve it.  Our parties have differences of course, but we share a resolve to sort out the public finances, rebalance our economy and return to growth.

If we fail to do this, no other meaningful progress is possible.  A strong government, with properly-financed public services, is contingent upon a healthy economy in which the private sector generates the jobs, growth and prosperity that we need.

Forecasts from the independent Office for Budget Responsibility show that a credible plan to cut the deficit goes hand in hand with sustained economic recovery, low inflation and falling unemployment.

That’s why the Emergency Budget in June set out our five year plan to return Britain to firmer fiscal foundations.

The Budget measures will eliminate the structural deficit and get debt falling by 2015/16.  Some of the measures will be tough.  But even tougher would have been the cuts forced upon us if we hadn’t got the deficit under control.

The Government is determined that the burden of debt reduction will be shared fairly, thereby protecting the most vulnerable Scots.  The deficit must come down.

This commitment to fairness was borne out in the Budget.  Around 90,000 low-paid Scots were lifted out of income tax, the child element of child tax credits was increased and the earnings link to the basic state pension was re-established after 30 years.

The next challenge is to deliver the Spending Review which will restore the public finances to safety.  It is not just about cuts and squaring up to the deficit.  Instead, it marks a complete re-evaluation in our approach to providing public services.  The Treasury will announce the conclusions on 20 October.

A period of online engagement – the Spending Challenge – began in June.  So far we have had over 100,000 ideas from public sector employees and the general public combined.  We are committed to running an open and consultative spending review process and that is what we are doing.
But it is not enough simply to curb the growth in debt: this government is equally committed to making sure that we have an economy in which business can flourish.

That’s why we are doing all we can to provide the best environment for investors and businesses by maintaining a stable framework where enterprises can set up, run and grow.

Scotland’s ability to attract and retain inward investment is vital to stimulate growth and generate jobs.  More must be done: we need to attract a greater inward investment in order for our economy to meet its true potential.

That is why we have announced a yearly phased reduction in Corporation Tax which will come down to just 24 pence in the pound by 2015.  This will give us one of the most competitive rates in the G20.
Other budget measures included the removal of red tape from one-third of a million Scottish small and medium sized enterprises, the reversal of Labour’s proposed hike in employer National Insurance contributions and a National Insurance contributions holiday which will help 59,000 new enterprises in Scotland.

Government is also working with business and the financial sector to ensure that firms can access the finance they need to grow.  Finance must support and not constrain the recovery.
No-one should underestimate the problems facing our country in terms of health, education, criminal justice and so much more.  Whether north or south of the border, we must ensure that our economy is healthy and generating the revenues needed to get to grips with these challenges.
Scotland’s two governments must work together to restore confidence and bring jobs back to the economy.  That is the starting point – the fundamental – on which we must focus, and from which we must progress.  We still face real challenges but I am cautiously optimistic about the economic situation.  We will make the fair and responsible decisions that will allow Scotland to grow.