It’s that time of the year where the Chancellor for the Exchequer outlines his plan to save the economy and tells us all that his plan has been working along, albeit slowly. Using the jargon free BBC key points article, you can see why the Tories were mostly quiet during the Chancellors speech.
For starters, the growth forecast for this year has been halved to 0.6% as some economists worry about the threat of a triple dip recession. However, the growth rate will miraculously triple next year! At least, that’s what we’re told; expect that to change come Autumn (again). Meanwhile, borrowing will fall but our debt will rise as compared to our GDP, which as previously mentioned is also set to rise. Considering the aim is meant to be to reduce our debts, as I understand it, I’m not quite sure I follow why this is a ‘good thing’. Also, why set an inflation target of 2% when inflation has been higher than that for months? Surely it’s time to get realistic?
Public sector workers continue to get a 1% pay rise year on year, and while most departments will be seeing a 1% budget cut, the NHS and Schools will be protected. Also, all proceeds from libor suits will go to good military charity causes, which is nice. No, really, it’s nice. Stop expecting sarcasm.
To turn their recent U-turn on alcohol prices into a J-turn (see what I did there?) the Chancellor has decided to actually make beer cheaper by a penny per pint. This massive cut is his way of trying to pass on savings to the consumer.
While unemployment figures have actually risen for the first time in 12 months, 600,000 jobs will be made apparently, and the claimant count will all by 60,000, so 10% of the 600,000 jobs are expected to be given to job seekers on benefits. Either that or they’ll mostly be 10 hour jobs, which won’t be generating any income tax or NI contributions, and will still allow people to claim benefits.
Remember that big stink a short while ago about big corporations dodging lots and lots of tax? Well that certainly will be less of a problem, because corporation tax will be cut down to 20% from the the current 23% in 2015, which will give us the lowest business tax in the world. Coupled with the idea that a third of all business won’t be paying NI tax and others get a reduction, it’s aimed at showing that the UK is business friendly, helping small businesses, and creating jobs. Surprisingly, I agree in principle; less tax means businesses can afford to hire new people, and it’s especially good news for small businesses. However, for it to be really worth it, we need more full time jobs created, rather than part time. Families can’t live on 20 hours a week.
There are some good parts, like the childcare tax relief, and the attempts to get people buying houses again, but along with the upcoming welfare reform there’s very little to actually cheer about.
But hey, we’re all in this together.
What are your thoughts?