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Autumn statement decisions could have big implications for government

So the economy is still in a mess, and we will have to live with austerity measures until at least 2018.

By Kevin White | Published Dec 06, 2012 | comments

The chancellor couldn’t resist recycling his “we’re all in this together” comment during his delivery of the autumn statement, prompting howls of derision from the opposition benches.

His forecast that austerity measures would have to continue until at least 2018 prompted boos, while the reduction of the lifetime tax allowance for pension contributions from £1.5m to £1.25m from 2014/15, and a reduction in the annual allowance from £50,000 to £40,000 went down like the proverbial lead balloon.

In a wider context, the poorer are set to suffer with a further squeeze on welfare payments, with the likes of tax credits and child benefit rising by less than the rate of inflation. A move which will hit working families especially hard according to Ed Balls.

But on the plus side the state pension will rise by 2.5 per cent, and the anticipated rise in fuel tax duty has been scrapped, a £5bn infrastructure investment scheme could boost jobs, capped drawdown limits have been increased, and if you live in south London, the long-awaited extension of the Northern Line to Battersea has been given the go-ahead - although the ordinary man on the street will probably struggle to afford a home in the proposed development of Battersea Power Station.

Big headline makers here, but the real impact will not be felt for another year or two, we have continued uncertainty on government policy on pensions, with the continued chopping and changing causing damage to its public perception, so what is the chance we could be in an even worse state by the time of the next election in 2015.

How these plans are implemented, and how outside issues such as the continued turbulence in the eurozone, and a potential US fiscal cliff could affect the UK economy, will play a big part in who wins the next election.

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