Autumn Statement and Spending Review predictions: When is it and what to expect?Comments Off on Autumn Statement and Spending Review predictions: When is it and what to expect?
Chancellor George Osborne will stand at the dispatch box in the House of Commons on Wednesday to deliver his Autumn Statement and the results of his Spending Review.
Here’s a guide to what the event involves and what is expected:
What is the Autumn Statement?
The Autumn Statement happens every year and is a Government update on plans for the economy. Some people refer to it as a mini-budget.
What is the Spending Review?
The Spending Review determines how the Government will spend taxpayers’ money over the course of the parliament.
The process was introduced in 1998 when Gordon Brown wanted to give a longer term view of the Government’s spending plans.
The latest Review will spell out how £4 trillion of taypayers’ money will be spent.
How does the Government allocate that money?
The Spending Review is split into departmental settlements, which are the amount the Government awards to each department to spend over the parliament.
These settlements are then spent on running schools, hospitals and other public services.
How are the decisions announced?
Like another other Budget day, the the Chancellor will give a speech to MPs in the House of Commons, explaining his plans for the public’s money.
His opposite number, John McDonnell of the Labour party, should also get to respond.
What is Osborne expected to say?
Massive spending cuts are expected as Osborne tries to cut the UK’s deficit, or the gap between what it spends and what it gets in income through taxes.
Osborne said earlier this year that he plans to cut £20 billion in public spending from police, businesses, science, local government and justice in the next five years.
The Institute of Fiscal Studies has calculated that Govenment departments are facing average budget cuts of 27% in the next five years, which will equate to slashing real spending on departments in half over the decade.
Osborne also has to plug a hole in finances following the House of Lords’ rejection of his tax credits reforms.
His options here include slowing the pace of reforms, cutting further elsewhere or raising taxes.