Autumn Statement: At-a-glance summary of key points

[dutchman]

[dutchman]

Autumn Statement: UK growth 'hides disappointing news'



Higher UK growth forecasts "hide some more disappointing news for the chancellor", warns the Institute for Fiscal Studies (IFS).

It says the increased growth is just a result of growth coming a bit sooner than had been expected.

The think-tank warns things like free school meals are unfunded after 2015.

It says the pace of cuts in public service spending will accelerate from 2.3% a year between 2011 and March 2016 to 3.7% a year until early 2019.

The IFS has warned previously of the extent of spending cuts that Chancellor George Osborne will have to make after the next election if he is still in the job.

It says that announcements made in the Budget in March as well as in Thursday's Autumn Statement about things like not increasing fuel duties and creating marriage allowances in the tax system, will add an extra £7bn of spending into the period from 2015-16.

"The chancellor continues to make specific promises on spending increases whilst stating that he will keep total spending at the same level. He can't keep doing that," Paul Johnson from the IFS says.

He also stresses the uncertainty of the amount of money that will be raised by anti-avoidance measures and the increased bank levy.

And he says that there will now have to be additional austerity as a result of the chancellor's pledge to balance the budget by the end of the next parliament without raising taxes.

"There's even more austerity than we'd expected because the chancellor has decided he wants to continue for an additional year in order to get the books into surplus - he doesn't need to do that for his own fiscal rules," Mr Johnson told the BBC.

Much of the attention on the Autumn Statement has focused on the decision to raise the state pension age to 68 in the mid-2030s and 69 in the late-2040s.

Mr Osborne told the BBC: "The reason we do this is because our country is getting older and we want to go on being able to afford really good pensions for people. There is not a bottomless pit of money."

"The alternative is a pension system that would collapse because it was unaffordable," he added.

"Smoke and mirrors"

[rebbonk]

To quote Gidiot... "There is not a bottomless pit of money"

No there isn't and if he and this government stopped trying to be a world benevolent service we'd be much better off. How about a policy of charity begins at home?

[dutchman]

Osborne 'used questionable statistics' to back up claim households are better off



George Osborne has been accused of using “questionable” statistics to tell MPs that households are getting better off.

The Institute for Fiscal Studies said the Chancellor had used "strange" figures for disposable income in his Autumn Statement this week.

The think-tank also warned that, despite the recent economic recovery, households will be "substantially" worse off at the election in 2015 than when the Coalition took office in 2010.

Living standards are the centre of the political battle over the economy. Inflation rising faster than wages has left many households worse off, something Labour says the Coalition has failed to address.

The Chancellor this week tried to counter those charges as he unveiled improved forecasts for economic growth, suggesting that the recovery will soon leave households better off.

In his Commons statement, Mr Osborne cited official figures for disposable income, the sum families have left after paying essential bills. The number is forecast to rise modestly, going up by 0.5 per cent this year and 1.1 per cent next year.

“Yes, real household disposable income is rising,” Mr Osborne told MPs.

However, the IFS pointed out that the statistic Mr Osborne cited does not just cover household incomes but also reflects the finances of charities and universities.

Paul Johnson of the IFS raised questions about Mr Osborne’s use of the disposable income figure.

“It tells us something about household incomes but it should certainly not be used in isolation to measure how they are changing,” he said.

There is “something a little bit strange” about Mr Osborne’s choice of statistic, the think tank suggested.

Andy Love, a Labour member of the Treasury Select Committee, said that Mr Osborne would have to account for his use of the disposable income figure when he appears before the committee to discuss the Autumn Statement.

He said: “There are questions over the accuracy of the Autumn Statement on this issue of living standards. The Chancellor has to be very careful about his use of statistics, since figures like this can easily be misused for political purposes.”

In the battle over living standards, Labour has suggested that the effect of prices outstripping wages is that families are £1,600 a year worse off under the Coalition.

The Treasury disputes that calculation, saying it is based on the wrong measure of inflation, the RPI gauge, which gives a higher reading for prices than the official CPI measure.

However, the IFS said that the broad thrust of the Labour calculation was correct, concluding that households are indeed around £1,600 a year worse off.

The Labour calculation “is not giving a misleading impression of the changes in living standards that have taken place during the financial crisis,” Mr Johnson said.

The IFS also echoed predictions from the Treasury’s Office for Budget Responsibility suggesting that it will be several years before household spending power returns to pre-recession levels.

Household income "will surely still be below its 2010 level by the time we get to the election in 2015," the IFS said.

More smoke and mirros