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Chancellor George Osborne Autumn Statement


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Chancellor George Osborne has denied his Autumn Statement will hit the working poor harder than the rich.

Mr Osborne insists a benefit squeeze is fair on people who go out to work and pay tax.

But Labour says the majority of people affected by the move, announced in Wednesday’s statement, are in work.

All working age benefits, including tax credits and child benefit, will go up by 1% a year, less than the rate of inflation, for the next three years.

In his statement, Mr Osborne confirmed it would take longer to clear the country’s debts than he previously thought – and this means the spending cuts will go on for longer than planned.

Pensioners have been protected with pensions going up by 2.5%.

But the chancellor said a further squeeze on the welfare budget was needed to help pay off the deficit – but he said other moves, such as a £1bn raid on the pension pots of the wealthy, meant the “richest 20% have paid most”.

He said measures such as raising the level at which people start paying income tax and scrapping a planned 3p rise in fuel duty would also help the low paid and proved “we’re all in this together”.

He sought to justify the squeeze on benefit payments by suggesting working people would support it.

“I think people getting ready to go out to work, they are frustrated that they pay their taxes, that they work long hours and a lot of that money, frankly too much of that money, goes into a welfare system that supports out-of-worklessness,”.

But Shadow Chancellor Ed Balls said the majority of people affected by the move were not unemployed – and a working family with children on £20,000 a year would lose £279 a year from April.

“He (Mr Osborne) somehow wants to attack people he thinks are workshy and feckless but if you look at the facts 60% of the people who are affected by that 1% freeze are in work”.

He said a below-inflation 1% increase in maternity pay and an upcoming cut in the top rate of income tax made a mockery of Mr Osborne’s claim to be cutting fairly, saying: “Where’s the fairness in that?”.

Let’s see what was said during and after the budget:

Chancellor George Osborne has updated MPs on the state of the economy and the government’s future plans in his Autumn Statement. Here are the key points:

FUEL

The 3p-a-litre increase in fuel duty, planned for next January, is cancelled

ECONOMIC GROWTH

Predicted to be -0.1% in 2012, down from 0.8% predicted in the Budget

Forecasts for next few years are: 1.2% in 2013, 2% in 2014, 2.3% 2015, 2.7% in 2016 and 2.8% in 2017

BENEFITS AND PENSIONS

Most working-age benefits to rise by 1% for each of next three years

From 2014-15 lifetime pension relief allowance to fall from £1.5m to £1.25m – annual allowance cut from £50,000 to £40,000

Basic state pension to rise by 2.5% next year to £110.15 a week

Child benefit to rise by 1% for two years from April 2014

Local housing allowance rates to rise in line with existing policy next April but increases in the following two years capped at 1%

Changes to welfare to save £3.7bn by 2015/16

TAXES AND ALLOWANCES

Basic income tax threshold to be raised by £235 more than previously announced next year, to £9,440

Threshold for 40% rate of income tax to rise by 1% in 2014 and 2015, from £41,450 to £41,865 and then £42,285

Main rate of corporation tax to be cut by extra 1% to 21% from April 2014

Temporary doubling of small business rate relief scheme to be extended by further year to April 2014

Inheritance tax threshold to be increased by 1% next year

Bank levy rate to be increased to 0.130% next year.

£5bn over six years expected from treaty with Switzerland to deal with undisclosed bank accounts

HM Revenue and Customs budget will not be cut

ISA contribution limit to be raised to £11,520 from next April

Prosecutions for tax evasions up 80% – with anti-abuse rule to come in next year

No new tax on property value

No net rise in taxes in Autumn Statement

GOVERNMENT BORROWING

Point at which debt predicted to begin falling delayed by a year to 2016/17

Deficit forecast to fall this year, as is cash borrowing

Deficit to fall from 7.9% to 6.9% of GDP this year, and to continue falling to 1.6% by 2017/18

Borrowing forecast to fall from £108bn this year to £31bn in 2017/18

£33bn saving to be made on interest debt payment predicted two years ago

Deficit fallen by a quarter in last two years

Bradford and Bingley and Northern Rock Asset Management brought on to balance sheet, adding £70bn to national debt

GOVERNMENT SPENDING

Period of austerity to be extended by another year to 2017/18

Departments to reduce spending by 1% next year and 2% year after

Local government budgets to be cut by 2% in 2014

Government spending as share of GDP predicted to fall from 48% in 2009/10 to 39.5% in 2017/18

Spending review to take place in first half of next year

JOBS AND TRAINING

Unemployment expected to peak at 8.3%, lower than the previous prediction of 8.7%

Employment set to rise in each year of the parliament

Since general election, 1.2 million jobs created in the private sector

TRANSPORT

Extra £1bn to roads, including upgrading A1, A30, and M25

£1bn loan to extend London’s Northern Line to Battersea

EDUCATION AND FAMILIES

£1bn to improve good schools and build 100 new free schools and academies

£270m for further education colleges

Teachers’ pay to be linked to performance

INFRASTRUCTURE

Ultra-fast broadband expansion in 12 cities: Brighton and Hove, Cambridge, Coventry, Derby, Oxford, Portsmouth, Salford, York, Newport, Aberdeen, Perth and Derry-Londonderry

£600m for scientific research

Annual infrastructure investment now £33bn

£1bn extra capital for Business Bank

Gas Strategy to include consultation on incentives for shale gas

HOUSING

Funding to assist building of up to 120,000 homes

OVERSEAS AID

Promise to spend 0.7% on development to be honoured next year, but not exceeded.

We  have seen  how far will this chancellor will take this economy as he continues with his plan A. It’s been purported that he admit that plan A is taking longer to action as the economy is still running slow.

Recently on the Andrew Marr Show he was quoted ” He will not go to plan B as he believes he is on the right cause of action”.  Ed Balls was right with his argument that Chancellor plan A is NOT working and it is hard for the government opposition party to get the message across to the public and the Chancellor made many cuts in the  first year and said judge him on his merits two years on inflation is up, unemployment is up, Welfare is in a mess which means cuts to the poorest and middle-income in society.

Chancellor said on the Marr Show that Balls plans will damage the country at a time when the country is debts and he is clearing the debts when the coalition should be investing  in Education. Female unemployment is at an all time high. Er who is in power now Chancellor sort out your own house in order yet you fail to mention that half of the Euro Zone is in debts and recession.

Successful govt has always use unemployed as scapegoats are a burden to our society. Come on I say create more jobs for the country in all the sectors. Reintroduce the Labour Future Job Funds which was a successful story and most employers hard but fair.George Osborne was forced to admit that his grandiose plans to slash the national debt by 2015 were in chaos.

He has been told by critics that cutting pay, pensions and jobs and salvaging the public sector would worsen the situation by reducing tax receipts and pushing more people onto benefits.

Shadow chancellor Ed Balls calls Osborne’s judgement “woefully lacking.”

If economic growth was the Chancellor’s priority, he would have a point.

But neither economic growth nor cutting national debt is of supreme importance to him or his austerity programme.

Austerity amounts to a systematic transfer of national wealth from labour and the poor to capital and the rich to boost corporate profits.

When Osborne claims that big business and the rich will pay more in tax, he is taking us all for mugs and, if we were to believe him, we would be.

Does anyone believe that it came as a bolt from the blue to Osborne to learn that Starbucks, Google, Amazon and countless other companies are, as the Commons public affairs committee says, “immorally” minimising their tax bills?

Of course not, just as he wasn’t shocked by Philip Green’s tax-avoidance schemes that benefited him to the tune of hundreds of millions of pounds.

If anything, this systematic self-enrichment qualified him to become a government adviser.

Big business and the rich are increasingly in the firing line for their employment of various means to dodge paying the sums in tax that their incomes dictate they should be paying.

The response of their apologists is always that what they are doing is legal, which is generally true.

So easy is it for big business and the rich to swim through the holes in the tax office’s nets that it becomes clear that successive governments share a common belief that taxation is a duty for the weak but an optional extra for the strong.

Politicians often tut-tut about companies and individuals making use of tax-avoidance havens to minimise tax liability in Britain, but most of these havens come under the jurisdiction of the British crown.

It should be crystal clear that continued tolerance of these bolt-holes for the rich is not a mistake. It’s a deliberate policy.

HMRC threatens to take a tough line with self-assessment taxpayers who fill in their tax returns late and this toughness is likely to rake in around £100 million a year.

Where is this tax-gatherer toughness when it comes to transnational corporations that play ducks and drakes with Britain’s tax system?

Starbucks would have us believe that deep soul-searching has caused it to reconsider its approach to paying tax here after previously insisting, laughably, that despite a massive turnover in Britain it had made no profits in the past 15 years.

It is the bad publicity engendered by the positive public attitude to UK Uncut direct action against Starbucks outlets that has prompted a response.

Why should it be up to Starbucks to offer crumbs from its table?

Why has no government given the order to HMRC to go after a whole swathe of companies that pay little or no tax?

It’s because governments of all stripes are in thrall to big business, sharing an expectation that working people, pensioners and the poor should pay for economic crises while the rich and powerful go scot-free.

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One response to “Chancellor George Osborne Autumn Statement

  1. Pingback: George Osborne, presented the 2012 budget in the United Kingdom | MeInfoBlogger.net

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