In his Budget statement, Osborne revealed Office for Budget Responsibility figures predicting that debt as a share of GDP will fall from 80.4% in 2014/15 to 80.2% in 2015/16. It would then continue to fall, reaching 71.6% in 2019/20.
This puts an ended to a 13-year increase in the national debt, the longest since the seventeenth century, the chancellor said.
‘For much the last five years it looked like we might fall short [but] the hard work and sacrifice of the British people has paid off. The original debt target I set out in my first Budget has been met. We will end this Parliament with Britain’s national debt share falling.
‘The sun is starting to shine – and we are fixing the roof.’
On economic growth, Osborne said the OBR had confirmed that growth hit 2.6% last year, the fastest rate of any of the world’s advanced economies.
It has also revised up its growth prediction for 2015 to 2.5% from the 2.4% forecast at December’s Autumn Statement. Next year’s forecast has also been revised up to 2.3% where it will remain for the subsequent two years.
In terms of the deficit, the OBR said its latest forecast suggests that by 2014/15, the deficit would have been reduced by 41% in cash terms and by 51% as a proportion of GDP.
The deficit is projected to continue falling and turn into a small surplus by 2018/19 and the following year.
‘The deficit falls to 4% in 2015/16; then down to 2% the following year; and down again to 0.6% the year after that,’ Osborne said.
‘In 2018/19, Britain will have a budget surplus of 0.3% in 2019/20. We will also comfortably meet out fiscal mandate and Britain will be running a surplus for the first time in 18 years.’
The projected surplus is expected to be £5.2bn in 2018/19, rising to £7bn in 2019/20.
Osborne was also upbeat about today’s employment figures, calling it a ‘massive moment’.
‘Britain has the highest rate of employment in its history,’ he told MPs.
‘For years governments have talked about full employment – the government is moving towards achieving it… The evidence is plain to see – Britain is working.’