George Osborne sets out his vision of an economy built on savings and investment
Shadow Chancellor George Osborne has just addressed the Association of British Insurers, setting out his vision of a "new economic model" for the country.
You can read the whole speech here, but the two highlights would appear to be as follows.
Firstly, he identified his medium term priority as making the transition "from an economy built on excessive debt to one built on savings and investment" in order that the recovery can be sustainable when it comes:
"We can start by avoiding the uncertainty and damage caused by unpredictable and rushed changes to the tax system... Reducing uncertainty is one important step towards rebuilding our savings culture. We also proposed at the Budget the abolition of basic rate tax on savings income. We are committed to raising the Inheritance Tax threshold to £1 million so that only millionaires pay tax on what they have saved to pass on to their children."
Secondly, Mr Osborne also outlined his desire to "embed a culture of long term investment at the heart of our financial system" which would see a re-focusing of the economy "from the rush for short term gains to the pursuit of long term returns":
"The banks should be using their profits to rebuild their balance sheets, not to hand out huge bonuses while the rest of the economy picks up the pieces for the follies of finance. But the change of culture needs to go far deeper than bonuses... We also need to embed a new culture in new institutions that value investment in long term assets and technologies."
Jonathan Isaby
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