The Autumn Budget

Dec 17, 2012 by

Just under two weeks ago the Chancellor of the Exchequer, George Osborne, presented his Autumn Statement in the House of Commons. The Autumn Statement (which you can read in full here: is one of two statements of economic forecasts which the Treasury makes to Parliament each year (the other being the Budget).

In effect, the Autumn Statement is a sort of “mini-Budget”, detailing the current state of the Country’s finances, economic forecasts for the future and a few spending announcements. This is all well and good for those versed in the jargon and acronym laden speech of the treasury, but what did the Autumn Statement tell us about the state of the Country and what does that mean for us?

Unfortunately, the struggling Eurozone means that the UK’s growth forecasts have been downgraded to 0.1% this year, but with a real hope of growth and significant improvement in subsequent years. This doesn’t sound too good, but we must put it into perspective: the European Central bank recently downgraded the Eurozone’s growth for this year to minus 0.5% ( with next year’s “growth” for the Eurozone estimated at between -0.9% and 0.4%. These figures are clearly worse than the estimated growth for Britain of 1.2% in 2013. In fact, Britain is predicted to grow faster than both France and Germany.

Similarly, whilst unemployment is falling in Britain, having previously peaked at 8.3%, the Eurozone level continues to rise, currently lying at around 11.7%. All of this, coupled with the announcement that the Government is on schedule to meet its 5 year borrowing target, shows that recovery in the UK, whilst difficult, is well on its way.

It is with this in mind that the Chancellor set out a “Fiscally neutral” Autumn Statement (ie balance spending on the one hand with an equal increase in taxation elsewhere). This is the sensible antidote to the opposition’s calls to use debt to stimulate false growth.

So what does the Autumn Statement mean for those of us who live and work in Broxtowe? Here are some of the headline measures that the Government has put forward to help:

• Scrapping the last Government’s 3p rise in fuel duty which was due to come into force in January.
• A rise in the Personal Tax Allowance to £9440
• A 2.5% rise in the basic state pension
• A 1% rise in the 40% tax threshold for both 2013 and 2014
• An increase in the Inheritance Tax threshold
• An increase in the ISA saving limit to £11,520
• A 1% uprate in benefit payments (excluding those for disabled people).
• £5.5 Billion of new Capital Investment

The decision to only uprate benefits by just 1% (a real terms cut) is a tough one but is fair given that, in recent years, those who receive benefit payments have seen a 20% increase in their incomes, whilst salaries for those in work (in both private and public employment) have increased by only 10% or less. It is important to make it pay to be in work.

However, perhaps the most important announcement for people who live in Broxtowe is the news that the Government is investing £5.5 Billion in new Capital Investment schemes, which includes infrastructure projects, science investment and money for academies and free schools. This will promote growth, provide new jobs and improve our creaking infrastructure. This is greatly welcomed and it is interesting to note that despite the fiscal challenges we face, public investment as a share of GDP will be higher on average in this Parliament than it was under the last Government.

The fact is that whilst no one can wave a magic wand to fix the biggest economic crisis for decades, this Autumn Statement has shown that the Government is working hard to fix the mess it inherited in 2010 with measures that are demonstrably improving the economy compared to our neighbours in the Eurozone.

Related Posts


Share This

Leave a Reply