Today the Chancellor, Phillip Hammond, announced the 2016 Autumn Statement, the 2nd most important yearly statement by the Treasury. While smaller than a Budget, many forecasts and announcements are made surrounding the country's finances. It is often perceived as lots of figures and data with no real meaning for ordinary people. So, what does this one entail? And what does it mean for the average person, both in their work, home and social life? I intend to answer both of these questions in easy, concise, non-dreary economic language.
For the young, myself included, a new saving account has been introduced where someone can place between £100 and £3,000. The money must be invested for 3 years, and the best deal will give 1.62% interest. The Chancellor's forecast suggest over 2 million people will benefit from this measure, however several experts describe it as ''underwhelming'' due to varying interest rates by the time the saving account comes into action. Whether this new bond is just a political gimmick or will actually help those wanting to invest in the short term remains to be seen. For the ordinary person, this saving account, while perhaps offering some extra money, isn't accessible during the 3 years of investment, meaning it cannot provide help in a crisis. The housing crisis in the UK is a disaster. So many are out priced and unable to afford decent, good quality, affordable housing, which should be a basic necessity. The average house price is £218,000, up £16,000, and rising. Just to put down a deposit, the average buyer would need £33,000, which for some is 3 years or more of wages. What do people do until then? Live in a cave? The chancellor has promised to increase funding for home building, but it's unclear whether more homes will lead to cheaper prices. £1.4 billion has been set aside for affordable homes, but how will these be created and is a billion enough? For upcoming generations, affording a home is a worrying and unlikely project. The argument about whether home ownership is necessary is for another time, but for those who want to call a home their own, the help and support must be there. Regarding welfare, I was relived to hear the chancellor announce there would be no more benefit cuts in this Parliament. My personal view on welfare is it should be a temporary safety net for those in the process of looking for work. It must never be abused and for those who do abuse it should be ashamed. While benefit levels must be humane, there must never be any incentives where a life on benefits leaves someone financially better off than working. For those who need welfare throughout their lives e.g. someone disabled, I believe the amounts given should be close to the average wage and account for any specific costs the person may incur from being disabled. Welfare payments are currently frozen, which is bad if the cost of living increases, hitting the poorest hardest. However, the amount someone on Universal Credit earns in work over the work allowance (the amount you can earn without your benefit being affected) will be reduced by 63p instead of the present level of 65p, helping those at the bottom. However the economy varies in the future, it is vital that those at the bottom get the help and incentives needed to enter the workplace. For workers, the National Living Wage will rise from £7.20 an hour to £7.50. What a boost! Quite what the difference between National Living Wage and National Minimum Wage is I don't know. The extra 30p an hour should add up over the months meaning people can spend more of their money. One thing everyone, whatever your age, class, race or gender can celebrate is a ban on cold callers offering exotic investment opportunities to people cashing in their pension pots. Having riddled the pensions system for many years, I don't understand why the, presumably, con artists weren't banned earlier. There will be substantial investment in transport and infrastructure. To give but a few examples: £110 million for East West Rail and commitment to deliver Oxford to Cambridge Expressway, £23 billion to be spent on innovation and infrastructure over five years, £7.6 million for repairs to Wentworth Woodhouse, near Rotherham, said to be inspiration for Pemberley in Jane Austen's Pride and Prejudice. This vital investment will help to create jobs, connecting parts of the country and helping to improve links. I do find it interesting when the Labour party plan to invest in infrastructure, they are ridiculed at the party who cannot be trusted whereas when the Tory plan the exact same, it's, apparently, fine. Just an observation. Above all other announcements is the catastrophic amount of borrowing and the extortionate national debt. The chancellor plans to borrow £100 billion - £60 billion because of Brexit. Whether the, alleged, £350 million the UK will receive each week once we leave the EU will cancel out this borrowing, I highly doubt. When re-entering Government in 2010, the Tories promised to eradicate the deficit by 2015. Well, that didn't plan out. Now the chancellor highly doubts there will be a surplus by 2020. A decade after first making a promise, the promise has utterly failed to materialize. On debt, succinctly different from the deficit, it was £1 trillion when the Tory took office and £1.6 trillion when George Osborne left the Treasury; an extraordinary £59,000 per household. Mr Hammond now proposes raising the debt to £1.95 trillion, which will have impacts on households whom will have to pay it back for many years to come. This all coming from the party of 'economic competence'. Overall, this Autumn Statement represents the economic hardship that will be faced over the next few years, particularly surrounding Brexit. Borrowing will increase and the debt will rise, which is good for nobody. While new investment projects have been announced, it is unclear what effect that will have for ordinary people. It is essential that, economically, the Government works in the interest of the many, not the few.
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