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Autumn Statement 2013


George Osborne has been releasing his Autumn statement for 2013 today, making some key statements which claim the austerity agenda is working.
In fact, Osborne has claimed that the UK’s economy is growing at a faster rate than any other country from the G7, and further claimed that Britain will be back in the black by 2018/19. However, Labour claimed that the conservative party were in denial about the cost of living crisis, stating that “for most people, there is no recovery at all.”

Key points raised by the chancellor includes the decision to raise the state pension age to 68 “in order to keep track with life expectancy.” However, this increase will not come into effect until the 2030’s meaning that the plans will only effect people who have not yet reached their 50’s.
Other key points outlined in the Autumn statement include:

Increased growth forecasts

Growth for the year has been reforecast from 0.6% to 1.4%, and from 1.8% to 2.4% next year. However, these figures for the following three years are down to 2.2%, 2.6% and 2.7%.

Reduced Deficit

The underlying deficit of the UK has been revised down to 6.8% this year and 5.6% next year, signifying that the countries levels of debt are slowing down. This trend is set to further continue with predictions for the subsequent financial years set at 4.4%, 2.7% and 1.2%.
Furthermore, the chancellor even went on to suggest that according to figures from the OBR (Office for Budget Responsibility), the country will have a small cash surplus in 2018/19.

Public debt is £18bn lower than forecast in March, and this debt is forecast to be £80bn lower than forecast in March by 2017/18.

Spending cuts

Osborne has cut departmental budgets by £1bn this year, with a similar cut expected the following year.

Rising pension age

It has been announced the national retirement age where it is possible to claim a state pension will rise to 68 in the mid-2030s and to 69 in the late 2040s.

Welfare cuts

Overall welfare spending is to be capped at the current levels, and those aged 18 to 21 still claiming benefits who do not have basic English or maths qualifications will be required to take training in order to claim benefits. Furthermore, those who are unemployed for more than six months will be forced to start a traineeship, take work experience or do a community work placement or lose benefits.

New tax measures

Non-residents who sell residential property will be forced to pay capital gains tax when selling residential UK property.
Employer National Insurance will no longer be paid for young people under 21 in order to encourage more employers to hire young people.
The personal income tax threshold will rise to £10,000 from April 2014, with future raises dependant on Consumer Prices Index (CPI).
A tax break for married couples and those in civil partnerships will be introduced, enabling couples to transfer £1,000 of their income tax allowance to their partners.

Business rates in England will be capped at 2%, whilst some retail premises will get a discount. Furthermore, businesses moving into vacant high-street properties will have rates cut by 50%.

Petrol taxes stay frozen with a planned rise of 2p per litre for next year to be scrapped.

Unemployment rates

The number of people claiming unemployment benefits is down 200,000, whilst unemployment is forecast to fall from 7.6% this year to 7% in 2015. Furthermore, the total number of jobs is expected to rise by 400,000 this year alone, with a further 3.1 million predicted to be created by 2019.

Education Investment

Plans have been unveiled to create an extra 30,000 university places in England in 2014/15, with the current cap being abolished completely the following year, whilst science, technology and engineering courses will receive increased funding. Also, 20,000 more apprenticeships will be funded over the next two years.

Furthermore, reports show that more people from disadvantaged backgrounds are applying to university, whilst pupils at state schools in year one and two will receive free school lunches.

Social Housing sell off

Councils are to sell off the most expensive social housing and rundown urban housing estates to enable regeneration. Whilst those who move home for work will be given priority on housing lists.

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