By Naked Politics Team
This week, the government announced a new autumn statement, which sets out major economic changes the government will roll out. It’s only been two months since the last “mini budget” which crashed the economy and sealed the fates of the previous chancellor Kwasi Kwarteng and then Prime Minister Liz Truss.
With the cost of living being at the forefront of a lot of young people’s minds, here’s a summary of the key changes, from energy, to taxes and benefits, and how they could impact you.
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Cost of Living
There will be cost of living payments extended into next year with £900 for some on benefits, up from £650 this year. Some on disability benefits will also get a £150 payment. Pensioners fare well, with an extra £300 next year and the “triple lock” will be kept.
The chancellor announced more help with energy bills, an average of £500 extra will be given per household. However, the “Energy Price Guarantee” which puts a cap on how much you can be charged for energy is going to rise from £2,500 a year to £3,000 for a typical household. Ultimately, the cap isn’t really much of a cap at all, as if you exceed that amount of energy use you could end up paying even more than the £3,000 per year.
Successive recent governments have been called to much more drastically limit the amount energy companies are charging customers, with many facing energy bills that they cannot afford to pay, and for these companies to be taxed far more.
Wages and benefits
Homeowners on universal credit will be able to apply for support after three months instead of nine, and the cap on social housing rent increases will go down to 7% instead of 10%. These changes may be unlikely to help a lot of young people, as they are less likely to be homeowners, or have access to social housing; council housing stocks have been mostly falling since the late nineties.
Private rent in general has been increasing, particularly in the capital to very high levels. Private rental prices paid by tenants in the UK rose by 3.4% in the 12 months to August 2022, up from 3.3% in the 12 months to July 2022.Private rental prices grew by 3.4% in England, 2.5% in Wales and 3.6% in Scotland in the 12 months to August 2022. Private renting has not been subject to any changes to help tenants in this budget.
The benefits cap will also be increasing by £10.1% roughly in line with inflation. The cap will go up from £20,000 to £22,020 for families nationally and from £23,000 to £25,323 for families in Greater London. While for single people it will go up from £13,400 to £14,753 nationally and from £15,410 to £16,967 in Greater London.
The household support fund will be extended until March 2024 to a total of £1 billion, to help those on benefits and low incomes. People on universal credit from September next year will have to meet with a “work coach” at their local job centre if they are working between 15-35 hours a week and earning the national living wage, to try to facilitate securing paid employment that will take claimants off benefits.
For those 23 years and over the living wage will increase from £9.50 to £10.42 an hour from next April. For those aged 21/22 the increase is from £9.18 to £10.18, ages 18-20 the increase is from £6.83 to £7.49 and under 18s it £4.81 to £5.28. These increases are not in line with inflation.
The top rate of tax has been lowered from £150,000 to £125,140. Personal allowance, national insurance and inheritance tax are all remaining the same. There have also been some reductions in the rate at which you start paying tax on dividends as a shareholder, and capital gains taxes for companies. So there has been a small shift on taxing some wealthier people more. However, there has been no changes on taxing significant wealth more, particularly wealth overseas which ends up not being taxed sometimes at all.
The government is scrapping one of the key incentives for getting an electric car; from april 2025 electric vehicles bought after 2017 will no longer be exempt from car tax. Zero emissions cars will be liable to pay the standard rate from the second year onwards which is currently £165 per year.
Jeremy Hunt Hunt also confirmed that the Government will proceed with the new nuclear power plan at Sizewell C.
The NHS will be getting a reported extra £3.3 billion for the next two years, and schools £2.3 billion. Most departments’ income will be staying the same, which has caused concern for some given that costs have risen significantly due to inflation this year.
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