United Kingdom spending review

The scale of the economic challenge is formidable. We inherited one of the largest budget deficits in Europe and the G20. But we have a clear vision for the future of our country. We have chosen to spend on the country’s most important priorities – the healthcare of our people, the education of our young, […]

The scale of the economic challenge is formidable. We inherited one of the largest budget deficits in Europe and the G20. But we have a clear vision for the future of our country. We have chosen to spend on the country’s most important priorities – the healthcare of our people, the education of our young, our nation’s security and the infrastructure that supports our economic growth. We are building a fairer and more responsible society, with more opportunities for people to lift themselves out of poverty, and with state support focused on those who need it most. We are reforming public services – improving transparency and accountability, giving more power and responsibility to citizens and enabling sustainable long term improvements in services. And we are building a stronger economy, with more jobs, investment and growth for a private sector-led recovery. We have protected as far as possible those areas of public spending which matter for economic growth and pursued reforms to make these more cost-effective.

We know that we cannot have sustainable growth in the economy without healthy public finances.  We have created a new independent Office for Budgetary Responsibility, so that the power to determine the growth and fiscal forecasts now resides with an independent body immune to the temptations of the political cycle.  And we have pledged to eliminate the UK’s structural deficit by the end of this parliament, which has been welcomed by the International Monetary Fund as a necessary path to ensuring fiscal sustainability and a balanced recovery.

Our Spending Review is part of an ambitious plan to create a business environment that is one of the most competitive anywhere in the world. We understand that the British economy of the future must be one that is built on investment, savings and exports and are determined to use our tough plans for fiscal consolidation as a springboard for growth and recovery through the private sector.   From 2011, we will gradually reduce corporation tax to 24 per cent, giving Britain the lowest in the G7 and one of the lowest in the G20.  We will reduce the small profits rate of corporation tax to 20 per cent.  We will lower capital gains tax for entrepreneurs.  And we will cut National Insurance contributions for employers, extend help to small businesses needing to access credit, and make Britain the easiest place in the world to start a business.

But let us not forget that throughout the recession, the UK has remained the six largest economy in the world.  We have one of the most flexible labour markets in Europe and according to the Organisation for Economic Co-operation and Development, the least number of barriers to entrepreneurship in the world.  Our unrivalled financial services industry, our strong skills base, our global outlook and orientation, our creative talents, our world class universities and our central position between Asian and American time zones all demonstrate that we have an open economy and we are open for business.

So, we have a strong base on which to build. With that in mind, we want to inject a new commercial focus into our relationship here in Nigeria. We are aware our two countries already enjoy an important trade relationship. Trade between the UK and Nigeria increased by 67% from the year 2007 to the year 2009, and in the last year alone, UK goods and services exports reached the value of £2.3 billion indicating that Nigeria is a key destination for British firms keen to invest in Africa. The UK is one of the largest investors in Nigeria, in sectors from oil and gas to financial services, to agriculture. As His Royal Highness, The Duke of Gloucester, stated during his recent visit to mark the 50th anniversary of Nigeria as an independent nation, Nigeria is and will continue to be a key international partner for the UK. So, we are confident that we are taking the right steps at home and abroad to help economic recovery in our own countries, and to contribute to a stable and prosperous global economy.

The Right Honourable William Hague ,MP is First Secretary of State, Foreign and Commonwealth Affairs, Her Majesty’s Government.