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22 April 2015Economy

Economy 720

Overview

With one of the worst economic recessions in living memory resulting in banks collapsing, companies folding and soaring unemployment it's not surprising the economy has been a central focus for parliament, government and remains a key issue for voters.

In the last five years we've watched closely as the Conservative-led government has navigated this challenging economic space.

Over the last five years, despite rocky periods, the economy has picked up and is predicted to grow a respectable 2.8% this year. The financial services industry has improved and the banking sector has been recapitalised.

Unemployment is at 5.5% the lowest it's been since the Office for National Statistics (ONS) started keeping records in 1971. And the Conservatives are keen to share that 1000 jobs have been created every day since the parliamentary term began in 2010. However, whether one believes government has any role in creating jobs or not is reflective of political ideology.

Since 2010 the Government has pursued a rigorous austerity programme aimed at cutting the budget deficit and pulling the country out of recession. The budget deficit is now half what it was in 2010 at 5% of GDP. There is still a long way to go as the UK's debt still stands at over 80% of GDP.

Christian perspective

As Adam Smith a Scottish philosopher and pioneer of political economy recognised, the economy is a moral reality. Human beings actualise their moral selves in making economic choices and through participation in the economic system.

Christians should look at the economy as a reflection of our values. The Bible values honest labour and dedicated workers, and warns against dishonest business practices such as tax dodging, dishonest accounting practices and insider information. The Bible honours investment, thrift and responsibility when managing our finances.

We see time and again a call to care for the poor and a responsibility to those beyond our borders. Our economic perspective must be filtered through this biblical narrative of honesty, hard work and care for others. The reality is that this is often a very hard tension to operate in but one that must be pursued as we prayerfully and carefully consider the economic policies on offer and the political ideologies of the various parties.

Party policies

The Conservatives will make a further £30 billion in cuts in order to see the UK return to surplus by 2018. They have promised to increase the tax-free Personal Allowance to £12,500, ensure people who work 30 hours per week on the minimum wage pay no income tax and crack down on tax dodgers. They want to invest £1 billion in infrastructure.

Labour have promised not to increase spending and work to cut the deficit but have given no deadline on this. They want to increase the minimum wage to £8, bring back the 50p top income tax rate, ban zero-hours contracts deemed to be "exploitative", freeze energy bills until 2017 and introduce a British Investment Bank.

The Liberal Democrats want to eradicate the structural deficit by 2017/18, increase public spending once the budget is balance, allow high-skill immigration to support key sectors of the economy and create a fair plan to reduce the deficit by ensuring the rich pay "their fair share" and corporations are unable to avoid tax responsibilities.

UKIP want to increase the transferable tax allowance for married couples to £1500, ensure corporations pay their fair share of tax, scrap tax on the minimum wage up to £13,000 and abolish inheritance tax. They would reduce debt by leaving the EU, cutting foreign aid spending and reducing Barnett Formula spending.

The Greens' focus is to end austerity and increase public spending. The want to crack down on tax dodgers, increase tax to 60% for those earning over £150,000 and introduce a wealth tax on people worth £3 million or more. They want to increase the minimum wage, create one million well-paid new public sector jobs, reduce national insurance contributions and ensure the highest wage in any business is no more than ten times the lowest wage.

You can read more about the party manifestos here