Osborne claims coalition is “confronting the country’s problems”
Chancellor George Osborne has said the coalition government is tackling Britain’s economic problems rather than avoiding them, despite the fact that the economy is set to shrink by 0.1% this year.
In today’s Autumn Statement, the Chancellor has conceded that he will not be able to meet his own intended target that the nation’s debt would start falling by 2015. Instead, austerity measures will continue in Great Britain until 2018.
As a proportion of Gross Domestic Product (GDP), the UK’s debt is actually projected to rise from its current 74.7% to 79.9% in 2015, before dropping back to 77.3% by 2018.
Many of the moves announced today will target the better of members of society, with Mr Osborne admitting that the government “needs to raise more” from the wealthy.
For example, from 2014 the amount of money that can be put into a pension, tax free, is set to drop to £40,000 from £50,000, which will raise around £1 billion for the government.
The chancellor has also announced that he will benefit all wage-earners by raising the income tax level by £235 to its highest ever level of £9,440 – meaning that no income tax at all will be paid on the first £9,440 that each person earns.
The threshold where income tax jumps from 20% to 40% – which currently stands at £41,150 – will rise to £41,865 in 2014, and will jump again to £42,285 by 2015.
Mr Osborne conceded that the country’s deficit is worrying, but assured MPs that it could be fixed, saying: “Yes, the deficit is still far too high for comfort. We cannot relax our efforts to make our economy safe… But Britain is heading in the right direction. The road is hard but we’re making progress.”
Labour leader Ed Miliband disagreed, however, claiming that the government was not working fast enough to reduce Britain’s debt. He said: “What we need, and what we need George Osborne to admit, is if you’ve been trying an approach for two and a half years and it hasn’t worked, you don’t just keep ploughing on regardless.”