We are going through the details of George Osborne’s latest financial statement now. The deficit is still frighteningly high: £108 billion this year according to the new figures in the Autumn Statement. Tax rates have gone up since the fiscal crisis hit but the resulting revenues have been underwhelming and spending is still much too high. The Government has admitted that they will miss their target to start shrinking the national debt as a share of national income by 2015-16.
There were also some policy announcements. There is some really good news, a great reward for the campaigns you have supported, and sadly some bad news. Which means we still have a lot to do in 2013.
- No rise in Fuel Duty. The planned rise at the start of next year has been permanently cancelled, not just postponed. Thank you to everyone who wrote to their MP at FreezeFuelTax.com. But we will need to fight again next year to keep the rate frozen and ensure motorists get a fairer deal.
- Higher ISA limits. People will be able to save more money tax free in an ISA, helping savers. This is the right thing to do. The money has already been taxed when it was earned and represents a small step towards the fair taxation of capital income proposed by the 2020 Tax Commission.
- Restraint in benefit spending and a higher Personal Allowance. There will be a stronger incentive to work with no repeat of last year when benefits rose much faster than earnings while low earning families will be able to keep more of their money. There is also more support for councils to freeze Council Tax.
- Corporation Tax cut and more allowances for investment. That will boost industrial investment and mean more opportunities and higher wages, easing the pressure on family living standards. It is another step towards the kind of fairer tax on capital income that you have helped us fight for with the 2020 Tax Commission.
- Empty property rates cut. New properties built between 1 October 2013 and 30 September 2016 won’t pay empty property rates for eighteen months, which will encourage investment and create jobs. The Government hasn’t done nearly enough about this very unfair tax yet though, and we will be keeping up our campaign for a fairer deal, and for a freeze in business rates overall to help small business.
- Reduced Higher Rate threshold. 400,000 more people will pay higher rate tax on their income, including National Insurance that is a 50 per cent tax rate.
- No progress on merging Income Tax and National Insurance. We recently set out how it can be done without higher taxes for pensioners or the self-employed, helping to simplify our terribly complicated tax code.
- Missing the debt target. If the Government had moved faster to control spending – and had not made some expensive exceptions like foreign aid – then they could have got the public finances in better shape.
- Restriction of tax relief for pensions. Pension relief stops savers being taxed twice: once when they earn the money then again when they receive it as a pension. While this will not affect everyone, it is simply not fair.
- More corporate welfare. Instead of lower taxes for all businesses, even more money is being spent on grants which too often go to large firms with the political connections and lobbying budget to get hold of them.
What do you think of the Autumn Statement? Any feedback would really be appreciated as we go through the small print.