With just over a fortnight to go until the Budget, the Prime Minister is making a promise to put more money in people’s pockets if the Conservatives are elected.

The importance of financial stability and renewed confidence in the economy was top of the agenda, during yesterday’s speech in the West Midlands in which David Cameron vowed to slash taxes by moderating public spending during his next term.  However, disappointingly, he didn’t talk about plans to increase the starting point for the 40p tax, which has been robustly and consistently demanded by Tory MPs, economists and business leaders, amongst others.

In my opinion, people on a salary of £44,000 living in the south of the country for example, probably wouldn’t consider themselves to be particularly well-off – and it’s crucial that the government implements measures that will be advantageous to all income brackets, not just the lower paid.

During his speech, the Prime Minister also explained his plans to make Britain a much more responsible society, and to banish the ‘live for today’ attitude in response to the financial crisis.  Cameron’s policy fits in with the notion that we need to set a good example to young people, and teach them the critical importance of long-term financial planning.  If this is the Prime Minister’s ‘moral’ strategy, then I think it’s a positive one.

The economy is growing at its fastest rate in seven years following the government’s previous tax cuts and forward-thinking business approach, so continuing along the same line can only be good news for the UK as a whole.  To my mind, this rising momentum of growth should not be stopped in its tracks, and Cameron’s pledge to drop taxes further is a good idea, to encourage business and focus on continued investment and employment.

Of course, by promising tax cuts and a more responsible society, it leaves Labour wide open to criticism if they pledge to borrow more in an attempt to rebalance the economy, ahead of next year’s general election.  During yesterday’s speech, the PM issued a warning to voters that should Labour go ahead with their plans to borrow more, future generations are the ones who will suffer with enormous debt.

Whether in his 2014 budget on 19^th March, George Osborne will increase or decrease the initial income tax threshold, we will have to wait and see.  But I believe with the economy recovering as it is, he could take what he probably thinks is a political risk by introducing real ‘shock and awe’ tax cuts that could deliver positive results for those across all income brackets and, subsequently, for the wider economy.

Nigel Green deVere Group

Blog written 6th March