Taxation and Government spending

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham

“For those just about managing, while the personal allowance is due to rise to £11,500 from April reducing the amount of tax all will pay if earning above this level. I don’t see much chance of the public sector pay rise cap (set for 5 years at 1% in 2015) being cut short early”  

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The 2017 Spring Budget will be the last at this time of year as the Chancellor, Phillip Hammond, announced in November that he would be switching the annual Budget to the Autumn, which means this year we get two Budgets. Combined with the timing of this Budget, just before Brexit negotiations have started, I think this will not be much of give-away while there is so much current economic uncertainty. This is despite a recent surge in income for the Government - above predictions - due to higher than expected personal tax receipts at the start of this year (when the bulk of these arrive for self-employed people) and because the UK is growing faster than was predicted last Autumn.

I hope we will see some money being offered to help to relieve this year’s pressure on social care costs – which has experienced 11% cuts in funding over the last five years at a time when there is a rising demand for these critical services for so many people (we have one million extra people over the age of 65 in the UK compared to five years ago). However, at best this will only be a short-term relieving offer rather than one that will help address this challenge for future years. There needs to be more fundamental rethinking of how we support this need as a country in future.  

I would however, like to also see a hinted promise from the Prime Minister being delivered upon – with more money being offered to support much needed development of affordable housing. While more housing is being built than a few years ago there remains a critical shortage of affordable housing in many places round the UK.   

For those just about managing, while the personal allowance is due to rise to £11,500 from April reducing the amount of tax all will pay if earning above this level.  I don’t see much chance of the public sector pay rise cap (set for five years at 1% in 2015) being cut short early. This is creating increasing problems for so many lower paid people in the UK with prices rising almost twice the rate (at 1.8% in year to Jan 17) that their wages are going up.

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