George Osborne's Autumn Statement: Reactions
Published by Max Salsbury for 24dash.com in Central Government and also in Finance
Chancellor George Osborne has announced that the UK economy is forecast to shrink by 0.1% this year.
As part of his Autumn Statement, the chancellor also scrapped plans for a 3p rise in fuel duty and cut corporation tax to 21% from April 2014.
Osborne said that the inheritance tax threshold will rise from £325,000 to £329,000 in 2015/16. There were no changes made to present property taxes.
National Housing Federation chief executive, David Orr, said: “The Autumn Statement has left more questions than it has given us answers.
“We welcome the Chancellor’s commitment to building 120,000 new homes by using some of the funding set aside for infrastructure.
“On top of September’s stimulus package, this is a step in the right direction to solving our country’s housing crisis. As always, the devil is in the detail and we look forward to learning more about this.
“The extra money made available to the Department of Communities and Local Government to buy surplus public sector land is welcome, but it is at a much smaller scale than we expected. It is imperative that the Government moves forward quickly with this and ensures the rapid release of land for new homes."
Family Action chief executive, Helen Dent, said: “There is very little in this Autumn Statement for families. Both families in and out of work are struggling desperately to make ends meet and balance their family books. The Chancellor hasn't done enough to stem the lines of families at food banks, he hasn't done enough to protect vital services that families need, he hasn't done enough to make work pay and ensure children with parents in and out of work are not pushed further into poverty He hasn't done enough to help families build a stable home."
“The biggest investment we can make in reducing future spending on prisons, health and social services in the future is intervening early in the lives of family and children to address disadvantage and poverty now. While £5 billion investment in science schools and transport is welcome the value will not be recognised if it is at the price of cuts to the money available for early intervention and welfare."
Mark Henderson, chief executive of Home Group, said: “The Chancellor is walking a tight rope between cutting debt and stimulating growth. However, further cuts to welfare will have a human and economic impact on our sector. Additional welfare cuts will further stretch the people we help.
“The commitment to build an extra 120,000 homes is welcome although details were lacking on how this would be funded or whether it is new money.
“I grow increasingly concerned about the sector’s ability to deliver the new homes the UK desperately needs if there is a growing question mark over our customers’ and clients’ ability to pay their rent.”
Brian Simpson, chief executive at Wirral Partnership Homes, said: “Today’s announcement of a further £6.6bn of cuts in welfare expenditure has been expected for a long time, but that doesn’t mean that the social housing sector is going to be any more prepared for its impact. Even in the face of the various challenges and criticisms, the government is continuing with its plan to roll out the new Universal Credit benefit system next year, which is only likely to be successful if it includes strong work incentives and rates which provide adequate support for its recipients.
“Despite the announcement that there will be a £5 billion boost to infrastructure projects, it’s disappointing to see that plans to encourage building in the social housing sector have not been clearly identified. Whilst WPH has been lucky enough to continue building without any grants in 2012, this is unlikely to continue long into the future. All housing associations are feeling the pinch, and in order to give the sector a much needed push in the right direction, the government needs to include some radical changes in its Budget for 2013.”
Paul King, CEO at the UK Green Building Council, said: “George Osborne has once and for all nailed his colours to the mast today, and none of those colours are green. His obsession with gas not only makes a mockery of our legally binding carbon targets, it makes for a stark comparison with his stubborn refusal to exploit the potential for energy savings in our homes and buildings.
“Yet another opportunity goes begging for HMT to provide much needed support to incentivise the Green Deal, to re-commit and clarify the zero carbon new build policy and to pave the way for a national energy audit of our commercial buildings. All no-brainers and all desperately wanted by industry.
“The construction industry will welcome the increased capital spending on infrastructure and schools, but how much of that will be green building? All schools, including free schools, should be green – with better daylighting, better air quality and lower running costs in the long-term. Sadly Michael Gove doesn’t seem to think the learning environment is that important.”
Hugo Stephens, partner in the social housing team at Cobbetts LLP, said: “It is disappointing that the government has, once again, dropped the ball in regard to boosting the economy by getting housebuilding going again. The £10 billion of guarantees for new housing projects that was announced in September was briefly referred to but still hasn’t come to fruition, and the announcement that there will be more welfare cuts will further hinder housing associations from securing funds needed for development. The Chancellor maintains that the £5bn in infrastructure may be used to fund 120,000 new houses, which falls 50,000 short of what is required nationally, and includes no reference to whether this provision will include any affordable homes.
“The decision to rejuvenate the private finance initiative has been a long time coming, with advisers calling for such a change through most of 2012. Getting the private sector to fund building projects is a very attractive proposition for a cash-starved government which needs to invest in infrastructure, but has no resources of its own. However, there is still uncertainty as to whether this fresh round of PFIs – or PFI 2 - will include a provision for housing investment, and this is something that absolutely must be addressed if the government is to reduce the massive shortfall in homes for some of the most vulnerable in our society.”
Meanwhile, TUC General Secretary, Brendan Barber, said: "When you are self-harming you should stop, not look for better sticking plasters. 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."
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "The message from the Chancellor seems to be that property is a better investment than a pension. While he has rightly ruled out a Mansion tax because it would be 'intrusive' and 'expensive' to revalue homes, pension tax reliefs for the wealthy have been substantially cut. Once you've reached your annual or lifetime pension allowance it therefore makes sense to put any surplus cash into property.
"There was also no move to increase the amount of council tax paid on more expensive properties, with council tax frozen again next year. Nor did the Chancellor announce an increase in stamp duty on expensive property purchases.
"However, while the Autumn Statement contained little in the way of change for the property sector, next week's announcement regarding the new annual charge on residential properties valued over £2m owned through a company structure and changes to the current CGT regime will have much more of an impact.
"While interest rates are at record lows and repossession levels have not risen significantly, there are still those who are struggling to pay their mortgage. The decision to extend mortgage interest support for another two years is therefore welcome. Lenders must also do their bit and continue to show forbearance to those who are struggling to pay their mortgage each month."
London Assembly Green Party Member, Darren Johnson, said: “The Government has more money for road building, but fewer Londoners are driving. The Government is keeping down the cost of motoring, but the Mayor is raising fares as more switch to public transport. The Autumn statement is a real backward step for Londoners who are ditching their cars and want more money for cycle lanes and lower fares. The Mayor should be making the case for investment in public transport and opposing Government measures which will increase pollution.”
Ceri Goddard, chief executive of the Fawcett Society, said: “As austerity continues, women are bearing the brunt of spending cuts. We are in the grip of a 24 year high in women’s unemployment, while measures to reduce the deficit have seen welfare cuts fall primarily on women’s shoulders – to date, women have paid for some two thirds of the savings made from changes to the tax and welfare system since 2010. (1)
“Not only did today’s statement fail to address this skewed impact, the various policies unveiled in the name of growth offer little to support women's greater participation in the labour market or wider economy. While further investment in roads and other big infrastructure projects is welcome, few of the 1.01 million unemployed women will find jobs as a result."
The Chartered Institute of Housing said: "We found the 120,000 new homes the chancellor mentioned in his speech in the OBR report, rather than the statement documents. The OBR says its assessment of the combined package of government announcements since March is that it will add 120k new transactions – so it is not new money. We are still trying to establish whether the 120,000 figure refers to new homes or new transactions – at the moment it is not clear."
Paul Parkinson, executive director at Futures Housing Group, said: “We welcome news that plans to cut housing benefit for the under 25s have been scrapped. However, while detail is in short supply, it is apparent the below inflation rise of 1% in some welfare benefits will have a detrimental effect on a number of our residents.
“This at a time when household budgets will face increasing pressure, with the onset of the “bedroom tax” and reductions in Council Tax benefit due from April next year.
“Along with our peers, we’re working hard to identify at-risk individuals and signpost families to expert advisors, linking up with our in-house teams or partner organisations including local credit unions.
“However there appears to be no new support on offer for these organisations, which is something we hope to see the Government revisit over the coming months.
“We can expect to see an increase in demand for support-based services at a time when further cuts on Local Authority spending are signalled, resulting in further stress on vulnerable individuals. Our challenge will be helping those individuals on a one-to-one level to help protect the sustainability of our communities in the future.”
John Lee, chief executive of Your Homes Newcastle, said: “Your Homes Newcastle was relieved that the Chancellor appears to have decided against scrapping housing benefit for under 25 year olds in his Autumn statement. For many, including care leavers and those at risk of becoming homeless because of relationships with parents breaking down, remaining at home is simply not an option.
“We regularly speak to young people who are struggling with the expense of everyday living, rising food costs and increasing energy bills and having such vital support taken away from them would have made a very difficult situation even worse.
“In our experience, most young people don’t want to rely on the state for financial assistance but, as they battle with high unemployment levels and their own vulnerability, some have little choice.
“YHN is working hard to increase the employability of young people by offering apprenticeships and work placements within the organisation and also providing information and support to those looking for work elsewhere. Our financial inclusion team are also providing advice and guidance on budgeting and money management to all of those who need it but we know this can only help to certain degree.
“Although we are pleased to see this particular proposal has been dropped, we are still concerned that limiting increases to individual benefit rates below the rate of inflation will disproportionally impact on the poor of all ages, particularly those who are already being significantly affected by other changes to the benefits system under the Government’s Welfare Reform Act.
“It is vital that people make plans to deal with a potential loss of income now so they are better prepared for the changes. I would advise any YHN tenants who are concerned to contact our financial inclusion team on 0191 277 4502, look out for our Talk to Us bus currently touring the city or seek advice from the many agencies available in Newcastle."
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