Osborne warns of continued austerity as growth forecast is cut
The Chancellor has warned MPs that austerity measures in Britain are likely to last until 2017-18
, a year longer than predicted in the March 2012 Budget.
In his Autumn Statement to the House of Commons, the seasonal equivalent of the Spring Budget, George Osborne said growth had been weaker than expected
, with the forecast for 2012 cut from 0.8% to -0.1%.
The expectation of lower growth performance
and more pain to come are among the key points of the statement. In summary, the Chancellor's plans are:
- 2012 growth forecast cut from 0.8% to -0.1%
- Fall in debt to begin 2016-17, 1 year later than expected
- Austerity period extended by 1 more year to 2017-18
- Cancellation of 3p-a-litre increase in fuel duty originally scheduled for January 2013
- Cuts to departmental budgets to fund £5bn for infrastructure and schools
- Deficit forecast and cash borrowing to fall this year
- Basic income tax threshold to be raised next year by £235 to £9,440, more than originally announced
- 40% income tax threshold to increase from £41,450 to £41,865 (1%) in 2014 and 2015, then to £42,285
- Main rate of corporation tax to be cut to 21% (an extra 1%) from April 2014
In response to Mr Osborne’s statement, TUC general secretary Brendan Barber said: "With the economy still scraping along the bottom, unemployment set to rise and the Chancellor missing his own debt target, we need a fundamental change in direction
, not more muddling through."
"Cuts, austerity and squeezed living standards stretch seemingly without end into the future. What is missing today is any vision of a future economy
that can deliver decent jobs and living standards – it's pain without purpose."