The Chancellor has announced the details of the coalition Government’s ‘emergency’ Budget to deal with the £149 billion budget deficit crisis.
The following measures will be relevant to employment:
- a review on when the retirement age will rise to 66
- a consultation on whether to phase out the Default Retirement Age
- from 2011 the majority of benefits – presumably including maternity pay, sick pay, etc will be up-rated in line with the Consumer Price Index rather than the Retail Prices Index, saving an estimated £6 billion a year by the end of the Parliament
- 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. However, public servants who earn less than £21,000 will receive a flat pay rise of £250 in each of these years
- the threshold at which employers start to pay National Insurance will rise by £21 per week above indexation from April 2011
- the personal allowance, below which no income tax is payable, will be raised by £1,000 to £7,475 in April 2011.
- The basic rate limit for income tax will be frozen in 2013-14. There will be no change to the 50p rate of income tax.