Autumn Statement 2011: what it means for you
Chancellor George Osborne has delivered his Autumn Statement to Parliament. Find out how it affects your money.
Chancellor George Osborne has delivered arguably the toughest speech of his political career, his Autumn Statement.
While many of the major announcements around infrastructure and youth employment were already leaked in advance of the speech, there were some new measures unveiled.
The Chancellor said that the independent Office for Budget Responsibility has not forecast a recession. However, it did downgrade its economic growth forecasts for the fourth time during this coalition government.
In what resembled something of a mini-Budget, rather than a simple statement, there were measures announced that affect public sector workers, pensioners, motorists and commuters who use public transport.
Here’s a round-up of the main measures and who they affect:
Public sector workers
One of the most controversial announcements was that public sector pay will only rise by an average of 1% for two years after the current pay freeze ends in 2012.
There will also be a review into the possibility of variable pay rates for public sector jobs, depending on where those jobs are situated. In the Chancellor's words, he wants to see whether "public sector pay can be made more responsive to local labour markets".
And, tucked away on page 95 of the Office for Budget Responsibility's Economic Forecast, is the news that 710,000 public sector jobs will be lost by 2017, compared to their March forecast of 400,000 jobs to go between 2011 and 2016.
Families
The child element of the Child Tax Credit will be uprated by the Consumer Prices Index measure of inflation, meaning it will rise by £135 a year from April 2012.
The number of two-year-olds receiving 15 hours’ free nursery care is to be doubled to cover an extra 130,000 children. This is to be focused on children from disadvantaged backgrounds.
People receiving benefits and tax credits
Most working age and disability benefits will be uprated in line with the Consumer Prices Index measure of inflation (currently 5.2%), from April 2012.
The disability elements of tax credits will also be uprated, but the couple and single parent elements of the Working Tax Credits will not be.
Motorists
The 3p fuel duty increase planned for January has been scrapped. There will be a 3p rise in August instead. In a small fillip for people living in the Humber, the Humber Bridge toll will be halved.
Pensioners and future pensioners
The State Pension age increase from 66 to 67 is to be brought forward to 2026, which the Chancellor says will save £59 billion.
The State Pension is still protected by the so-called triple lock. This means that the basic State Pension will rise by £5.30 to £107.45 a week from April 2012. The full couple rate for people whose entitlement is based on their spouse’s or civil partner’s pension will rise by £8.50 to £171.85 a week.
The Pension Credit is to rise to £142.70 a week for single pensioners and £217.90 a week for couples. The threshold for Savings Credit will be raised to £111.10 for single pensioners and £177.20 for couples. Both these measures come into effect in April 2012.
The Government has also signed a deal with two groups of UK pension funds to provide £20 billion of investment for the infrastructure projects they have earmarked.
People who want to buy a home
There was confirmation of the already announced mortgage indemnities to help 100,000 people struggling to buy homes (which we covered in this article).
And the ‘right to buy’, a flagship policy of the last Tory government, is to be ‘reinvigorated’ with discounts of 50% offered to current tenants of social housing. The Government claims that it will provide an additional affordable home for every one that is bought from the money raised by the sell-off.
However, the stamp duty exemption for first-time buyers will be scrapped on 24 March 2012 as it has been “ineffective”.
Young people
As widely trailed, the Government is to introduce the Youth Contract, £940 million-worth of support to help young people into employment. This will offer 160,000 wage incentives of £2,275 for private sector companies to employ young people.
And, finally, some good news for water customers in the South West of England
The Government is to subsidise South West Water customers so that their bills are cut by £50 a year.
What did you think of the Autumn Statement? How does it affect you? Tell us your thoughts in the Comments box below.
More: Government to help borrowers buy with 5% deposit | 'Cuts to blame' for massive rise in child poverty
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So people will have to work longer, and not retire at 65. What a huge contribution that will make! I haven't looked up the stats but did have this question. What proportion of sexagenarians are currently working anyway? Which employers do you think will offer a job to someone aged in their sixties? B&Q can't employ them all. Age discrimination legislation doesn't work, it just stops people giving voice to their reasons.
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On the whole, this budget is much as expected since there is no money left in the till. Some of your contributors seem to have missed this point. Other points missed come from those backing the strikers. When the Unions (Through their lackeys, Brown and Balls) ruined the pensions of the private sector by making it too expensive for companies to continue funding their own pension schemes, those affected had to lump it or join the unemployed. At the same time, the Labour government was creating a phantom job boom by providing over 700,000 unneccesary managerial and non-job posts in the civil service. These could only warrent their pay by requesting more and more, frequently duplicated, information from the revenue producing manufacturing industries. Before the UK can start recovering, these will have to go. As anyone would expect, these new managers falsely see their jobs as essential so its the workers of the Civil Service who end up jobless. Thirdly, on Milipede's claim that VAT should be cut. This would mean money has to be taken elsewhere and that means income tax. VAT raises the cost of both imports and local production whereas income tax hits mainly local production and leaves imports relatively unscathed - bad for the country and jobs. Specific comments - by targetblack. You cannot see why the Southwest is to get help with water bills. The answer is simple - whilst pay rates are low there they carry an exceptionally high level of costs due to holidaymakers from the rest of the country. On top of that, with the sell-off of the water companies and the copious regulations on water quality coupled with the long holiday coastline they, unlike much of the rest of the country, were also left with much more needed repairing/sorting out. This has meant their water bills have been much higher than those living in areas where the locals received much better pay and much less work needed doing.
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And apparently he has received the best education that money can buy; that should tell us that our education system is failing in a very serious way.
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02 December 2011