Wednesday, 30 November 2011

Autumn Statement Thoughts

Let's start by providing a link to the Autumn Statement itself from the Treasury
Now here are some of my thoughts on this statement, I am limiting myself because my thoughts on the statement would ramble on for thousands of words but there are some headlines I can't ignore.

The Autumn Statement sets out the actions the Government will take in three areas:

•• protecting the economy;
•• building a stronger economy for the future; and
•• fairness.

Protecting the economy
Raising pension age - yes, we all know that's required and we have to live with working for longer seeing as how we're all going to live longer.

Limit public sector pay rises to 1% for 2 years - this will mean an approximate 2% pay rise for public workers over a 4 year period, about equivalent to most of the private sector over the same period in my experience.  However this is a bit chicken and egg, if the government provides low public sector pay rises then the private sector is likely to follow suit, and in a period when the cost of living is increasing massively this is actually a pay decrease.  I'm no economist, but common sense tells me that spending will decrease and fear increase if we're all worse off in our pockets.  Doesn't sound like protecting the economy to me.

Building a stronger economy
Infrastructure spending - it's about time, the construction industry is always the first into a recession and out the other end, they are massive employers of people and users of resources and therefore investing in this industry provides a boost to the economy all round.  Good decision.

National loan guarantee scheme - great for small and medium businesses, but lets be clear, most new businesses are micro.  These are businesses set up by individuals or with just a few employees and they are never going to be included in this scheme. I think this has missed the point somewhat.

Funding for more free schools - how about funding the existing schools?  they run so close to the wire and could do with any small extra investment available.  Does everything have to be about rewriting the current system?

Right to buy - really?  How about providing more council funded housing for all those families who might loose their homes over the next few years if this next recession hits?  there is a real need for public housing.

More funding for 2 year olds in need - fantastic, this is well needed but it will have a major impact on the pre-school system since more younger children needs more adults for the care; where will this come from?

My thoughts
From reading the headlines and listening and watching the media coverage I was led to believe that the statement was being biased towards those out of work, but actually I think the economic justifications are correct and that the Treasury is doing the best they can with a bad job.  All they need to do now is introduce a tax on the super rich!!!!

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