§ The Chancellor of the Exchequer (Mr. Nigel Lawson)This Budget will set the Government's course for this Parliament.
There will be no letting up in our determination to defeat inflation. We shall continue the policies that we have followed consistently since 1979. These policies provide the only way to achieve our ultimate objective of stable prices. To abandon them would be to risk renewed inflation and much higher unemployment. As a result of our determined efforts, inflation is at its lowest level since the 1960s. Economic recovery is well under way and employment is growing.
These achievements are a tribute to the courage and foresight of the five Budgets presented by my distinguished predecessor, whose duties unfortunately keep him in Brussels today.
I shall do nothing today to compromise those successes. But there is much that I can do to build upon them.
My Budget today has two themes—first, the further reduction of inflation; and, second, a series of tax reforms designed to enable the economy to work better, reforms to stimulate enterprise and set British business on the road to profitable expansion, reforms that will help to bring new jobs.
I shall begin by reviewing the economic background to the Budget. I shall then deal with the medium-term financial strategy; with monetary policy and the monetary targets for next year; and with public borrowing and the appropriate PSBR for the coming year. I shall then turn to public expenditure, including the prospects for the longer term. Finally, I shall deal with taxation and the changes in the structure of taxation which will pave the way for cuts in taxes in subsequent years, for this will be a tax reform Budget.
As usual, a number of press releases, filling out the details of my tax proposals, will be available from the Vote Office as soon as I have sat down.