|The autumn statement: The economics behind the jargon|
Chancellor of the Exchequer George Osborne today revealed his much anticipated Autumn Statement, which was full of political jargon. What does it actually mean for you and me?
The EconomyEconomic Growth has increased from 0.6% to 1.4%, a sign that the Governments austerity measures, at least in the short term, seem to be paying off. Meanwhile, figures from the ONS suggest that the economy lost around £112 Billion when the economy contracted during the recession, a figure that Osborne used to launch a scathing attack on Labour, accusing them of being financially incompetent. Ed Balls hit back, accusing the government of being "in denial" about the "cost of living crisis". Indeed, the minimum wage has not risen above inflation ever since the Conservatives came to power in 2010, and with energy prices continuing to shoot upward, this winter will be a tough one for ordinary people.
BorrowingThe UK deficit, a measure of the difference between how much money is borrowed and how much money is payed back, fell to 6.8% this year and will fall even further to 5.8% next year. The UK is expected to have a small cash surplus in the 2018/2019 fiscal year but only on current financial plans, and to achieve this target would involve the biggest cuts in spending since World War II, and would see a significant reduction in the size of the state.
Whether or not this is a good or bad thing is open to personal opinion.
Benefits and PensionsThe UK pension age is set to increase to 68 and then to 69 by the late 2040s. The state pension is also set to rise above the cost of living, by £2.95 a week. This is seen as an attempt to please older Conservative voters. Anybody aged between 18 and 21 who does not have a math GCSE will be required to take a mandatory training course or risk losing their benefits and not being able to reclaim them in the future. State benefits are also set to take a cut in real terms, and benefits such as JSA and Income Support will see a small rise of 1%, below the cost of living for many people.
NI contributions are to be scrapped on 1.5 Million jobs for younger people, which means that many will see a small increase in wages. Bank Levy is set to increase, and Capital Gains tax for people purchasing properties in the UK from outside of it are also set to increase. The personal income tax allowance will rise to £10,000 per year from April 2014, in a move seem as a triumph for the Lib Dems. This means that anybody who earns below £10,000 will not have to pay any tax. A married couples and civil partners tax break, which is set to cost about £700m a year, is proposed to start in April 2015, enabling people to transfer £1,000 of their income tax allowance to their partners. Business rates will also be capped at 2%, as the Chancellor tries to encourage more businesses to invest in the British economy.
Jobs, training, and unemploymentThe number of people claiming unemployment benefits is down by 200,000, and unemployment is forecast to fall to 7% by the end of the fiscal year. Total number of jobs to rise by 400,000 this year and 3.1 million jobs predicted to be created by 2019. A boost in the government's start-up loans scheme will aim to help 50,000 more people start their own businesses.Export finance capacity available to support British businesses will be doubled to £50bn.Youth unemployment has remained exactly the same, in a worrying development for the government as it tries to get more younger people educated and into the workforce.
FuelPetrol taxes will stay frozen after the Government bowed to Lib Dem pressure and scrapped an extra 2p tax. Tax discs on cars are set to be scrapped, and train fares will rise with inflation, not above as previously thought.
EducationAn extra 30,000 University places will be created in 2015, in an attempt by the government to encourage more people to go to University, but a move that could also backfire badly if numbers do not go up, which could lead to a rise in tuition fees. The proportion of poorer people applying to University has increased, and all pupils in England in reception, year one and year two are expected to get free school meals, in another Lib Dem championed policy.
HousingThe government hopes £1bn in loans will boost housing developments in Manchester and Leeds, among other sites. The housing revenue account's borrowing limit is to rise by £300m.
Councils are to sell off the most expensive social housing and rundown urban housing estates to be regenerated, and workers who live in council houses are to be given priority on housing lists if they need to move home to find a job.
InfrastructureTax breaks for companies that engage in shale gas fracking are expected to be introduced, in a move that has angered environmental campaigners, who accuse David Cameron of breaking his election promise that his government will be the "Greenest government ever."
Overseas aidThe government's pledge to spend 0.7% of gross national income on international development is to be met without an increase to the current aid budget.
More information can be found here: http://www.bbc.co.uk/news/uk-politics-25225532