Chancellor of the Exchequer, George Osborne, has unearthed the red suitcase for another year. The budget for 2013/14, which was described as “for people who work hard and aspire to get on,” is an attempt to win over popular support and to re-vitalise the economy. There were no proposals that were directly aimed at students but there are plenty of examples of proposals that will affect the everyday lives of current students and those who hope to graduate and leave the bubble in the next few years.
Pubs and clubs are a big part of student life but in recent years, they have been affected by the increasing duty on alcohol. The budget announced plans to scrap the duty escalator on beer and to reduce general beer duty by 2 per cent from 25 March 2013.
The duty escalator meant that beer duty was automatically increased by 2% above inflation every year. According to the Campaign for Real Ale, beer duty has risen by 42% since 2008. They have been lobbying the government to end the tax for many years to help the hundreds of pubs who are struggling to survive across the UK.
Duty on high and low strength beer will be adjusted to reduce the tax on a typical product by 1 penny a pint from 25 March 2013. If you drink around 5 pints a week, you save roughly £2.31 across the year 2013/14 . Although it isn’t much, it is enough for one extra pint each year.
The news isn’t so good for wine, cider or spirit drinkers. The duty escalator will remain on these drinks. Duty will increase above the rate of inflation on wine, cider and spirits. If you drink around 5 glasses of wine a week, you will be roughly £6.08 worse off in the year 2013-2014. Spirit drinkers, who consume 5 single measure glasses each week, will be roughly £3.66 worse off in the year 2013/14.
Smokers will also be disappointed that the price of cigarettes will continue to rise. Duty is set to increase by 26p on a pack of 20 cigarettes, 9p on a pack of small cigars and 26p on a packet of rolling tobacco.
It was also be revealed that the fuel duty increase, planned for 1 September 2013, will be cancelled. This will mean that fuel duty will have been frozen for nearly three and a half years. From April 2013, pump prices will be 13 pence per litre lower than under the previous government’s plans.
This is good news, not just for those students who drive, but also for those who travel by bus to and from University. Bus fares have been rising in line with the increase in fuel prices, over the last few years. Figures published by Transport Scotland in February 2013 show that bus fares across Scotland have increased by 7.9% since 2001 (adjusted for inflation). Although it is likely that fuel prices and bus fares will continue to rise, the cancellation of the fuel duty will help ease the situation for travellers.
The Chancellor has also announced an extra £3bn for infrastructure projects. Although he did not specify where the money will be spent, the Department of Transport has been pushing for further rail schemes in addition to spending on Crossrail, Thameslink and electrification projects. This could be good news for the thousands of students who travel by train to get home for the holidays. However, the money will not be available until 2015-2016 and there is still a lot of uncertainty about where exactly the extra funding will be spent.
For those students who are set to graduate this year and next, there is some good news. The personal allowance (the amount of money you can earn before you are taxed) will increase to £10,000 in the year 2014/15- a year earlier than planned.
The Chancellor also promised that more people will be in work than ever before and the number of people claiming unemployment benefit would fall. This is good news for those of us who face finding employment in the next few years. This was particularly important as the latest figures show that unemployment hit 2.52 million, which is up by 7,000, in the three months to the end of January.
For those graduates looking to the future and are thinking of buying their own home in the next few years, plans to help home buyers were also introduced. The ‘Help to Buy’ scheme enables all purchasers to put down a 5% deposit on a newly built home. Up to 20% of the cost of the home will be funded by a shared equity loan, which will be interest-free for the first five years. This extends the current FirstBuy scheme that is exclusively for first time buyers.
Although this is probably not something that students are currently thinking about, we will all have to graduate and enter the real world in a few years’ time and these measures will be more important than saving a penny on a pint of beer.