CHANCELLOR George Osborne’s delayed Autumn Statement brought further bad news for the beleagured public sector - but some aspects were welcomed by businesses in South Yorkshire.
Austerity is to be extended for a further three years from 2015 to 2018 as economic growth has stuttered, meaning the Government has failed to meet targets for reducing borrowing and closing the gap between its income and spending.
But Mr Osborne reiterated his commitment to spending cuts, saying: “Turning back now would be a disaster.”
Shadow Chancellor, Ed Balls, said: “After two and a half years we can see, and people can feel in the country, the true scale of this government’s economic failure.”
He claimed the average family with children on £20,000 a year would be ‘worse off’ - even with plans to increase personal tax free allowances.
Labour is calling for a slowdown on cuts to ‘stimulate’ the economy.
Richard Wright, executive director of Sheffield Chamber of Commerce, said: “The statement does indicate a number of positive steps for business, such as the new capital allowances to encourage investment by small-and medium-sized companies, reduction in corporation tax from 2014 and the shift in money to support infrastructure developments
“New funding for Local Enterprise Partnerships and money for transport, exports and skills is also welcome news.”
Meanwhile, Deputy Prime Minister Nick Clegg said Lib Dems have secured an agreement regional pay structures will not be brought in for public sector workers.
He said: “As a Sheffield MP, it’s clear to me from speaking to my constituents how worried our public sector workers have been that – on top of all the other pressures they’re under – they’ll face a pay postcode lottery as well.”
But Coun Steve Houghton, leader of Barnsley Council said: “Further cuts mean some services may be stopped altogether, while other services will be less frequent and charges will increase.”
Rotherham Council leader, Coun Roger Stone, added: “We are being punished for this Government failing to both stimulate growth in the economy and meeting its own deficit reduction plans and yet somehow we still need to provide and protect services for those most in need.”
Doncaster Council cabinet member for finance, corporate services and environment, Coun Paul Coddington, said: “Like at most councils, this is bound to have a knock on effect for our services and employees. We will do our utmost to protect those services that have the biggest impact for our most vulnerable residents.”
However, Gordon Millward, South Yorkshire regional chairman, Federation of Small Businesses, said: “The chancellor has listened to our members’ concerns - notably around allowances and cancelling the 3p rise in fuel duty.”
Osbourne’s key points:
* Economic growth predicted to be -0.1% overall for 2012, down from 0.8 per cent predicted earlier in the year.
* An extra three years of austerity, from 2015 to 2018. Departments expected to reduce spending by 1% next year and 2% year after.
* Economic growth predicted to reach 2.8 per cent - but not until 2018.
* Benefits to rise by 1% in the next three years, child benefit to go up 1% for two years, basic state pensions to rise 2.5 per cent next year.
* £3.7 billion of cuts to welfare spending and pension relief allowance to fall from £1.5 million to £1.2 million.
* Basic income tax threshold to rise to £9,440 next year, from £8,105 at present.
* Mean rate of corporation tax to be cut by 0.1 per cent to 21 per cent.
* 3 pence per litre rise in fuel duty cancelled.
* Extra spending on infrastructure including £1 billion for roads, £1 bn loan to London Underground and ultra-fast broadband - but none for projects in S Yorks.
* No new tax on property.