The Conservative Manifesto 1997

DOUBLING LIVING STANDARDS

The spread of the free market heralds a new age of global competition. That means new markets for British goods and services, but new competitors for British companies as well.

If we try to protect ourselves from these challenges with more regulations, public subsidies and a cosy dependence on government then Britain will fail. But if we boldly embrace these new opportunities by pushing forward the economic revolution we began in 1979, then we will enter the next millennium with boundless prospects for growth and prosperity.

That choice - between stagnation and dynamism - is the choice which faces Britain at this election. It is a stark choice between the British way - of trusting the people and unleashing enterprise - and the failing social model, practised on the continent, which the Labour Party wants to impose on us here under the guise of "stakeholding".

Hard economic evidence shows how great is the divide between these two strategies. Britain is now in its fifth year of growing faster than France or Germany. Unemployment in Britain has fallen to less than two million, while it rises across Europe. Britain attracts nearly forty per cent of all the American and Japanese investment in Europe. Our aim now is to safeguard these achievements and build on them, so Britain becomes the unrivalled Enterprise Centre of Europe.

A Low Tax Economy

Conservative government will keep public spending under tight control and ensure that it grows by less than the economy as a whole over the economic cycle. At the same time we will continue to spend more on the services which matter most to people - hospitals, schools and the police.

Over the next parliament, we will achieve our goal for the government to spend less than 40% of our national income.

That means we can reduce the amount government borrows too, and meet our aim of moving towards a balanced budget in the medium term. Our plans show how we can virtually eliminate public borrowing by the year 2000.

Thanks to our success in controlling public spending, Britain is now Europe's low tax economy. This is one of the reasons why we are becoming the Enterprise Centre of Europe.

Our aim is to ensure Britain keeps the lowest tax burden of any major European economy.

In the election manifesto of 1992, we promised that "We will make further progress towards a basic income tax rate of 20p". Since then, we have cut the basic rate of income tax from 25p to 23p, and extended the 20p band so that over a quarter of all taxpayers now only pay income tax at the 20p rate. Achieving our public expenditure goals will mean we can sustain permanently low tax levels.

Over the next parliament, our aim will be to achieve our target of a 20p basic rate of income tax, while maintaining a maximum tax rate of no more than 40p.

Stable Prices

Low inflation has delivered lower interest rates whilst preserving the value of people's savings. Homeowners are now enjoying mortgage rates at the lowest levels for 30 years.

It has taken tough decisions to break free from our reputation as a high inflation economy. No Conservative government will jeopardise this achievement.

During the next parliament, we will maintain an inflation target of 2�% or less.

Rising Living Standards

The goal which we set ourselves in 1995 is to double living standards over 25 years.

We are on course to achieve our goal.