A large amount of my time in Parliament is spent with the Treasury Select Committee. Our job is to scrutinise the work of the Treasury and to examine the performance of all the departments and bits of the government that report to it. Importantly, we examine the budget and we are hard at work looking at the recent budget announced last week.
The budget has fairly fundamental changes that are key. Working age benefits have been frozen for 4 years, whilst household benefits have been capped at a lower than current rate. But what is apparently taken away is given back. For those in social housing, rents will be reduced by 1% a year for four years. The minimum wage will be changed to a new living wage minimum that will see minimum pay go from around £6.50 now to £9 by 2020. The tax free entitlement will rise, by the end of this parliament, to £12,500. For small businesses worried about paying more than the current minimum wage, there is a corporation tax reduction to 18% over the next few years.
Inevitably it is not possible, in our highly complicated tax and benefit system, to do changes that will, on a mathematical basis, help every single individual. But what this budget does do is to get more money into the private sector that will continue to create the environment to boost more activity in the economy for everyone. Already we are seeing a rise in living standards, a rise in wages and inflation is still at 0%.
Whilst these measure will help many people in Wyre Forest, the long term prospects for us here in the Midlands is being addressed by plans to rebalance the economy of the country geographically. Much has been said of the Northern Powerhouse, but it is the case that we in the midlands are moving towards our own version. This is important as we need to be championing our significant manufacturing capability in the automotive and aerospace industries.
There is much more in the budget than my 400 words in this column could possibly do justice to. But over the next week or so, we on the Treasury Committee will be doing our best to make sure that this budget delivers what the government has said it will, and do it in the fairest possible way.