The Chancellor stated that the deal offered on public sector pensions is fair to both taxpayers and public servants and that the reforms are based on the independent report of John Hutton, a former Pensions Secretary, and he says “it hard to imagine a better deal than this”. The Chancellor gave an open plea: “I would once again ask the unions why they are damaging our economy at a time like this – and putting jobs at risk. Call off the strikes tomorrow, come back to the table, complete the negotiations – and let’s agree generous pensions that are affordable to the taxpayer.” Personal Allowance As announced in the Budget, the Chancellor stated that the best way to support low income working people is to take them out of tax altogether so the increases in the income tax personal allowance this year and next will do that for over one million people. No figure was mentioned so unless we hear otherwise then the assumption is that the personal allowance for those aged under 65 will increase to £8,105 and the basic rate limit will be £34,370. State Pension age Due to the ageing population the costs of providing decent state pensions are going to become more and more unaffordable unless further action is taken so between 2026 and 2028 the State Pension age will increase from 66 to 67. This has been brought forward by 8 years as under current law it was not due to increase until 2034. This change will not affect anyone within 14 years of receiving their state pension today. Employment Rules The government is aware that many firms are afraid to hire new staff because of their fear about the costs involved if it doesn’t work out. They are already doubling the period before an employee can bring an unfair dismissal claim (from 1 to 2 years) and introducing fees for tribunals. Further reforms will make it easier for businesses, which include: Changing the TUPE regulations; Reducing delay and uncertainty in the collective redundancy process for redundancies of 100 or more staff from the current 90 days to 60, 45 or 30 days; Begin a call for evidence on two proposals for radical reform of UK employment law. Seek views on the introduction of compensated no-fault dismissal for micro-businesses with fewer than 10 employees; Look at how it could move to a simpler, quicker and clearer dismissal process, potentially including working with ACAS to make changes to their code or by introducing supplementary guidance for small businesses; and Look for ways to provide a quicker and cheaper alternative to a tribunal hearing in simple cases — a ‘Rapid Resolution’ scheme. Fuel and transport costs Train fares are set to go up well above inflation to pay for the much needed investment in new rail and new trains. The planned increase is RPI plus 3%, however the government have accepted that this is too much so will fund a reduction in the increase to 1% instead of 3%. This will apply across National Rail regulated fares, across the London Tube and on London Buses. The plan was for fuel duty to be 3 pence higher in January and 5 pence higher by August next year. The January increase is to be cancelled and the August increase will be 3p as opposed to the original 5p. The government estimates that this change will save families £144 on filling up the average family car by the end of next year. Other areas that may be of interest …………. Welfare payments The annual increase in the basic state pension is protected by the triple lock introduced by this government which guarantees a rise either in line with earnings, prices or 2.5% – whichever is greater. It means that the basic state pension will next April rise by £5.30 to
CIPP Policy News Journal
09/10/2012, Page 206 of 234
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