George Osborne's Autumn Statement - your reactions please!

(224 Posts)
CatherineHMumsnet (MNHQ) Wed 05-Dec-12 10:30:59

The Chancellor George Osborne will begin making his Autumn Statement in Parliament today at 12.30. Thought we should start up a thread so Mumsnetters can comment as it happens.

Viviennemary Wed 05-Dec-12 16:31:04

I thought it was only £235 up on what it is now which is about £8,100 I think. So it's good that he has raised it more. On the whole I think it was a fair budget. And no disability benefits to be cut which is also good.

MoreBeta Wed 05-Dec-12 16:31:12

Just a load of tinkering.

He could have junked the entire tax code and done the following:

Removed all income tax allowances, capital gains tax allowances, ISA allowances, tax credits and Child Benefit but give out a generous personal allowance of £10k for every adult and £5k per child to be pooled in a family if one person does not work. A 2 adult 2 child family could have an income of £30k before tax if that happened.

Corporate income tax, capital gains tax and personal tax at a flat rate of 35%.

Shut down DTI, DfiD, Scottish, Welsh, NI departments.

Stop paying subsidies or special tax breaks to any industry including 'green' industries.

There are loads of simple measures that would massively reduce tax complexity and reduce Govt spend.

mrscogon34thstreet Wed 05-Dec-12 16:31:38

malionis It was on Radio 4 a couple of weeks ago - I think it was John Redwood talking about it on Any Questions. I think it is the rate at which we can extract it which is governed by EU rules from what was said, so the market can't be flooded with cheap gas or something.

The US's use of this strategy is one of the main reasons they've had growth when we have stagnated, but the point remains that the economy needs to be stimutated as well as cuts in order to get us out of this financial hole.

malinois Wed 05-Dec-12 16:31:49

CinnabarRed - oh, I know that, but that's a levy imposed by the Treasury - nothing to do with the EU. All oil and gas producing countries have a levy on production - that's why Norway and the Gulf states are so rich! (not sure where we messed up on that one)

CinnabarRed Wed 05-Dec-12 16:34:03

The problem with taking benefits from overseas pensioners is that the amounts are too small to make a difference. It would raise a couple of million at most. (And that's not factoring in the cost of administration.)

Last year we borrowed £159bn, and our spending was around £650bn - to give you an idea of the scale of the problem.

So overseas pensioners are a drop in the ocean.

Although taking their benefits would be satisfying.

CinnabarRed Wed 05-Dec-12 16:35:52

We messed up by spending all of the revenue from the North Sea (present and future) in the '80s and '90s.

mrscogon34thstreet Wed 05-Dec-12 16:44:38

I think one of the main problems is the cost of living. There is very little governments can do over the cost of 'natural resource' based things such as energy and food, but someone could do something over the cost of housing. If housing costs were reduced by 30% or so then it would make a huge difference to everyone.

Unfortunately (and this is why I don't trust Labour although I'm not very impressed with the current government either) the last government buried their heads in the sand about the over inflating/ed rental and sale property markets and allowed every tom dick and harry get in on the 2nd homes/BTL market therefore allowing those who already owned propery to get richer and make it harder for the young and poor to get on the property ladder.

The problem is now a double edged sword as allowing 30% deflation would leave a lot of people in -ve equity and increase the problem of banks having lent money which they wouldn't get back but also, I think governments are relieved that the high price of housing will mean some relief on the issue of lack of pensions/funds for elderly care, as in the future the baby boomers (who have benefitted the most from the housing inflation) will have to sell to fund their retirements/care.

malinois Wed 05-Dec-12 16:46:26

mrscogon34thestreet - hmm, I'm not really buying that I'm afraid. The EU is pretty hot on anti-competitive practice on the whole and I can't find anything that suggests it has any remit over regulating oil and gas extraction (other than a proposal to harmonise safety standards on production platforms.) But if you can provide me with some links to prove otherwise I'm willing to be convinced.

The major oil producing countries do operate a nice little cartel (OPEC) however, to do exactly as you describe.

sieglinde Wed 05-Dec-12 16:47:12

MoreBeta, those are interesting ideas, but what fascinates me is that Osborne is clearly far too timid to try the drastic means clearly needed. One imbecilic thing is that we still take tax form the low-waged, and then give it back as tax credits... Why not axe some waged benefits AND AT THE SAME TIME raise the tax thresholds, a lot?

CinnabarRed Wed 05-Dec-12 17:06:19

"we still take tax form the low-waged, and then give it back as tax credits... Why not axe some waged benefits AND AT THE SAME TIME raise the tax thresholds, a lot? "

Because it's too blunt an instrument.

There are too many differences in outgoings and opportunities between, say, a single parent with income from all sources of, say, £20k pa including benefits and credits; a graduate on £20k; and a pensioner household with no mortgage on their property with pensions of £20k.

niceguy2 Wed 05-Dec-12 17:12:47

I would agree that Osborne (& the rest of them) wussed out of doing what was necessary.

If you look at other nations who have had to go through harsh austerity measures, the ones which recovered the quickest seem to be the ones which cut quickly and deeply. So for example Canada in the 1990's. More recently Iceland, Latvia.

For me it would have been better to rip the plaster off quickly, take the pain and move on. Rather than slowly slowly ease the plaster off over the next 5-10 years and have constant pain.

sieglinde Wed 05-Dec-12 17:21:58

Cinnabar, I'm on your side as a Keynsian, but is the growth of tax office bureaucracy really the best way forward? I also wonder if the differentials you describe could be resolved by different thresholds for the unwaged, which one of your examples is.

ttosca Wed 05-Dec-12 18:05:45

Fawcett's response to the Autumn Statement 2012

Fawcett's response to the Autumn Statement 2012: Women will continue to act as shock absorbers for the cuts.

---

Ceri Goddard, Chief Executive of the Fawcett Society said:


“As austerity continues, women are bearing the brunt of spending cuts. We are in the grip of a 24 year high in women’s unemployment, while measures to reduce the deficit have seen welfare cuts fall primarily on women’s shoulders – to date, women have paid for some two thirds of the savings made from changes to the tax and welfare system since 2010. (1)

“Not only did today’s statement fail to address this skewed impact, the various policies unveiled in the name of growth offer little to support women's greater participation in the labour market or wider economy. While further investment in roads and other big infrastructure projects is welcome, few of the 1.01 million unemployed women will find jobs as a result.

“In signalling his continued commitment to an eighty twenty split between cuts and taxes when it comes to paying down the deficit, the Chancellor has reaffirmed that women will continue to act as shock absorbers for the cuts. It’s vital the forthcoming Spending Review considers the differing impact these measures will have on women and men. In particular government will need to go further than just a household income level impact analysis if they are to gauge the likely impact of their policies on every day women's lives in any meaningful way.

“Holding benefit payments down below the rate of inflation means forcing many of the country’s poorest people to manage on less money. Women will be worse hit by this move – benefits typically make up a fifth of women’s incomes, as opposed to a tenth of men’s.

"At the same time, keeping public sector pay rises at below inflation levels – a real terms pay cut – will also affect women disproportionately as they make up the bulk of the public sector workforce.

“Whilst raising the personal tax allowance will help some women, those who do gain will actually gain less on average than higher earners - more of whom are men. What's more, this measure does nothing to help neither the record numbers of women currently out of work , or those who earn too little to pay tax.

“Further cuts to local government budgets are also bad news – there’s ample evidence to date that without ring fencing, services that women rely on often seen as soft targets in council cuts.

“In announcing tax relief for employee ownership schemes, the government has signalled this disastrous policy may go ahead, something we and many of those in the business community are very concerned by. Many of the rights up for grabs are in fact vital protections afforded women in the workplace.”


ENDS

Notes for Editors


(1) To date, a total of £14.9 billion worth of cuts per year have been made to benefits, tax credits, pay and pensions, with 74% of this taken from women’s incomes (see https://docs.google.com/spreadsheet/ccc?key=0AonYZs4MzlZbdHA1M2JJVF8tZTBvYWUzeFRnRU1yOHc#gid=0

fawcettsociety.org.uk/index.asp?PageID=1294

ttosca Wed 05-Dec-12 18:10:49

If you look at other nations who have had to go through harsh austerity measures, the ones which recovered the quickest seem to be the ones which cut quickly and deeply. So for example Canada in the 1990's. More recently Iceland, Latvia.

You're an idiot. In Iceland they arrested all the bankers implicated in the financial crisis, and spent all the money bailing out people, not banks. They forced the government out of power.

The Icelanders refused to pay off the debt caused by the financial crisis. It is the exact opposite of what you're trying to say:

itmakessenseblog.com/2012/06/18/global-elites-thrown-out-of-iceland-iceland-dismantles-corrupt-govt-then-arrests-all-rothschild-bankers/

Google: 'Iceland revolution'.

Why do you keep posting ignorant assertions?!

mrscogon34thstreet Wed 05-Dec-12 18:19:29

mali sorry - it was on this episode in reposnse to a question about the economy, any questions

It may be a rubbish point after all - there were some interesting points in general though.

mrscogon34thstreet Wed 05-Dec-12 18:23:01

I think the statement from the Fawcett society is interesting, but does the cause of women's rights no favours really.

They are correct that the cuts/budget etc. disproportionately affect women. However, I don't believe (and I think there would be many people who agree with me) that this is due to some evil 'let's do women out of lots of extra money' conspiracy, and that's what all these statements seem to imply to a 'lay' person.

The real issue is that women are generally not the higher earner/have low paid jobs etc. because of their place in society. It would be better IMO for the Fawcett Society to focus entirely on how to raise the aspirations and earning potential of women rather than going on about how this is the 'anti woman' recession.

expatinscotland Wed 05-Dec-12 18:24:42

Typical Tory BS: no cuts for pensioners at all, cuts for everyone else of working age.

JugglingWithPossibilities Wed 05-Dec-12 18:27:53

Just to say loved Stephanie Flanders fab analysis of this on BBC news just now.
I always think her explanations are so helpful, and thought she struck just the right balance this evening between quite complex economics and the impact on "ordinary households"

MoreBeta Wed 05-Dec-12 18:28:05

sieglinde - "One imbecilic thing is that we still take tax form the low-waged, and then give it back as tax credits... "

Precisely!

In fact when Osborne announced some pidlding measure relating to the level of tax credits as some sort of bid deal I was actually shouting exactly that sentence you wrote at my TV. grin

JugglingWithPossibilities Wed 05-Dec-12 18:52:33

Annoyed though that in the BBC headlines they actually said that "the rich and the low paid will be hardest hit by the measures".

Maybe more forgivable if they'd put that the other way round, but surely it's obvious the low paid will be "hardest hit" - I doubt the rich will suffer much !

StNickHasHisXmasTeakozyOn Wed 05-Dec-12 19:08:52

At least Clegg had the good grace to look embarrassed at the utter shite spewing from Gidiot's mouth. The economy is healing gringrin. Obviously he likes his recessions triple dipped.

The Tories are going to borrow over £200Bn by the end of this parliament. Probably more, because he is cutting and the private sector is not investing, meaning there is less money to spend, growth (ha!) reduces.

Just spotted a lie: "People on benefits have seen their income rise more than those in work". Conveniently glossing over the fact that most benefits go to those who work. How do they get away with lying to the house? Cunts.

JuliaScurr Wed 05-Dec-12 19:20:34

http://www.dailykos.com/story/2012/09/25/1135992/-When-you-enslave-yourself-to-banks-this-is-what-happens

Viviennemary Wed 05-Dec-12 19:23:35

Well I think raise child benefit for people with low incomes for first two children. Stop this topping up part time jobs with tax credits. I don't really agree with that. What annoys me is places like Starbucks employ people on low wages. These people might get their wages topped up by the state. Whilst Starbucks avoids billions in taxes. Somebody somewhere is profiting from this and it's not the poorly waged people of the UK.

JuliaScurr Wed 05-Dec-12 19:24:00
ttosca Wed 05-Dec-12 19:25:52

Howard Reed (Co-Editor of Plan B and Director of Landman Economics) writes for us about what he sees as a malicious Autumn Statement from a failed Chancellor determined to spend five years assaulting the UK’s poor and vulnerable.

Today’s Autumn Statement marked a point just beyond the halfway stage in this parliament – and therefore, of George Osborne’s tenure at Number 11 Downing Street. He’s virtually guaranteed five years in the job because David Cameron has shown extreme reluctance to get rid of any members of his “inner circle”, no matter how badly they are performing. But at that point, it looks increasingly likely (based on current polling) that in May 2015, the British electorate will say “enough is enough” and eject Cameron and Osborne from office. Given what Mr Osborne has managed to “achieve” so far in economic policy, this is very far from being surprising.

Firstly, let us consider Mr Osborne’s macroeconomic record. In its first set of projections published just after the Coalition Government came to office in 2010, the Office for Budget Responsibility forecast that Gross Domestic Product would grow by 2.8 percent in real terms in 2012. In today’s Autumn Statement, the equivalent forecast was minus 0.1 percent. In June 2010 the OBR forecast that the spending plans of the last Labour government – caricatured by Osborne as spendthrifts incapable of getting the deficit in the public finances under control – would reduce the cyclically-adjusted budget deficit from 8 percent of GDP in 2010/11 to 2.8 percent of GDP in the 2014/15 tax year. Osborne dismissed this rate of deficit reduction as far too slow and announced £40 billion of additional fiscal consolidation (spending cuts and tax rises) between 2010/11 and 2014/15, aimed for a cyclically-adjusted surplus on current budget by 2014/15. And the results? The latest OBR projections show that the cyclically adjusted budget deficit is projected to be 2.9 percent of GDP in 2014/15 – actually slightly worse than the previous government’s projections for the same time period! In other words the net effect on the UK’s medium-term fiscal outlook of the £40bn of extra austerity (on top of Labour plans) announced by Osborne in the 2010 Emergency Budget was zero – or even slightly worse than zero.

Apologists for austerity (of which there are increasingly few) protest that the apparent failure of Mr Osborne’s “Plan A” is due to circumstances outside the UK’s control. Over the last two years the OBR has a range of villains on which it has tried to pin the blame including higher-than-expected inflation (last year), and poor UK export performance (this year). What these diversionary tactics ignore, however, is the fundamental role of the UK as a cheerleader for austerity over the last three years. Under the previous government Gordon Brown and Alistair Darling played a key role in persuading most developed economies to coordinate a fiscal stimulus in response to the 2008 financial meltdown – a stimulus which had started to produce promising results by 2010. By the same token, Osborne and Cameron played a key role in persuading most developed economies (with the partial exception of the US) to implement co-ordinated austerity. The economic consequences have been disastrous – turning a severe recession into a depression which threatens the survival of Europe as an economic entity. Even an organisation as staid as the International Monetary Fund now admits that co-ordinated fiscal tightening in an economic depression can be self-defeating. Thus, below-par UK economic growth and export performance are not surprise factors emerging from left-field, but are an indirect consequence (via Europe) of the austerity mania which has been Britain’s only successful export industry these past three years. Unfortunately this message has still not got through to die-hard followers of orthodoxy in the Coalition Government – and indeed the OBR, which still insists on using a discredited set of multipliers in its economic forecasts (which are, consequently, predictably and repeatedly over-optimistic).

But if austerity has done nothing to improve the UK’s fiscal position, it has done all too much to make low-to-middle income families worse off, with the biggest losses for those at the bottom of the pile. The Coalition’s main strategy on tax and benefits is to relentlessly reduce benefits for the most vulnerable children and people of working age in our society - most recently with an announcement that increases in most benefits and tax credits will be limited to 1% per year for the next three years. At the same time the Government also hammered these families with a 2.5 percentage point increase in VAT in 2011. This helps pay for increases in the income tax personal allowance that give most benefit to middle-to-high income families, and a 5p-in-the-pound income tax cut for people earning over £150,000 per year. Meanwhile, as my analysis for the TUC has shown, large-scale reductions on spending on public services such as education, social care, housing and active labour market policies tend to hit the poorest hardest – including pensioners, who are being shielded from most of the benefit cuts. Today’s decision to increase capital investment spending by £5 billion over the next two years would be a welcome acknowledgement of the folly of cutting essential spending on infrastructure in a depression, were it not for the fact that this £5 billion is being diverted from other spending, and will hence have no effect on the overall pace or depth of austerity, but will excerbate the squeeze on service delivery. Meanwhile, the weakness of the UK economy – coupled with the fact we are outside the Eurozone – means that the UK Government could borrow at record low interest rates to fund infrastructure investment, but sadly Mr Osborne has chosen to totally ignore this opportunity.

Any reasonable Chancellor of the Exchequer who took notice of the evidence base on the effects of his or her policies would have given the current austerity drive up as a bad job a year or more ago, and would now be grasping for a “Plan B” along the lines set out by Compass one year ago (we’ll be updating this publication by the end of this year). However, Mr Osborne is neither reasonable nor evidence based – his version of “Plan B” is to do “Plan A” for longer. Thus, the UK public has nothing to look forward to from the present administration except more of the same – permanent austerity and ever-more-regressive tax and spending measures, until either Mr Osborne’s term expires, or the poorest and most vulnerable in society do. Fortunately Mr Osborne appears to have only just over two years left to inflict further damage on the UK economy. Sadly, for anyone with the misfortune to be sick, disabled, unemployed, earning minimum wage or a child in a low income household, two years is going to seem like a very long time.

www.compassonline.org.uk/news/item.asp?n=16435

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