by Michael Bailey | 2 December 2015
Last week's Autumn Statement saw numerous changes to spending within a number of areas, the majority of which can only be seen as positive move for most, however, were these amendments planned?
The aim, it seems, is to build a £10 billion surplus in 2019-2020. Most of the excess is already spent on ‘fixing the roof while the sun is shining’ as Mr Osborne put it, by investing in infrastructure. The goal is now on rebuilding Britain whereas previously, it had been on rescuing the country. That said, government borrowing still remains high at an expected £73.5 billion this financial year and plans to borrow a further £49 billion next year. The plan is to then borrow a further £24.8 billion the following year, and then £4.6 billion which will bring the country in line for the £10 billion estimate.
Importantly the biggest scrapping from the government’s previous ideas, is to leave Tax credits alone. This means potential payments of up to £1,200 per year to low-income families is safe, for now. Mr Osborne taking credit as with improvements to the economy there is more money in the pot than first thought. Nothing to do with losing votes or the public backlash? There is also a chance for the changes to be implemented when the Tax credits are moved to the Universal Credit in 2018!
Another big surprise, police funding will be protected and the defence budget is set to rise from £34 billion to £40 billion with the armed forces expected to pool resources to save on funding.
In light of the recent terror attacks around the globe, cuts in defence would have been a wrong move for the government. Is it reasonable to question what would have happened within the budgets if such events hadn’t arisen? Only time will tell If Mr. Osbourne's proposed plans will work effectively.
What are your thoughts on the Autumn Statement? Do you think the Chancellor of the Exchequer made the correct decisions? I'd love to hear your thoughts in the comments below...