Last week, the Chancellor announced the details of the coalition Government’s ‘emergency’ budget to deal with the crisis in public finances.
Significant measures include:
- a consultation on whether to phase out the Default Retirement Age, (following the commitment in the coalition agreement to do so);
- from 2011 the majority of benefits which will presumably include maternity pay, sick pay, and the like, are to be up-rated in line with the Consumer Price Index rather than the Retail Prices Index. It is said that this could save over £6 billion a year;
- a review of fairness in public pay to ensure that those at the top of organisations are paid no more than 20 times the salaries of those at the bottom;
- a two-year pay freeze in the public sector, although public servants who earn less than £21,000 will receive a flat pay rise of £250 in both these years;
- from April 2011 the threshold at which employers start to pay National Insurance will rise by £21 per week above indexation; and
- from April 2011 the personal allowance, below which no income tax is payable, will be raised from £1,000 to £7,475.