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George Osborne set to raise pension age to 70

By Rob Williams

The Chancellor George Osborne has delivered his Autumn Statement.

Mr Osborne declared that "Britain's economic plan is working" as he revealed an Autumn Statement containing bold steps to "remove that cap on aspiration".

 

Mr Osborne pledged: "The hard work of the British people is paying off and we will not squander their efforts."

 

Amongst the measures outlined including the scrapping of the petrol tax rise of 2p a litre planned for next year.

 

He revealed that the recession had been even deeper than feared - with GDP down by 7.2% rather than 6.3% - the equivalent of £3,000 per household and one of the sharpest falls globally.

 

But he said that UK plc was now growing faster than any other advanced economy saying growth forecasts for this year had more than doubled from 0.6% to 1.4%.

 

Mr Osborne said the OBR have forecast growth for four years from 2015 at 2.2%, 2.6%, 2.7% and 2.7%.

 

The growth forecasts are "significantly up'' in the largest improvement at any Budget or Autumn Statement for 14 years, with UK growing faster than any other major economy, the Chancellor said.

 

Speaking about job creation Mr Osborne said the OBR were expecting the number of jobs "to remain flat" over the year but that it now expects the number to rise by 400,000.

 

Mr Osborne said the OBR have forecast that private businesses will create 3.1 million more jobs by 2019, more than offsetting reductions in public sector workforce.

 

Mr Osborne said he was seeking "a responsible recovery to allow the Government to live within its means''.

 

Mr Osborne said the improving economic outlook meant borrowing would be £111 billion this year - £9 billion less than predicted at the time of the Budget in March.

 

Overall the Office for Budget Responsibility is now forecasting that borrowing over the next five years would be £73 billion less than previously thought with a "small cash surplus" by 2018/2019.

 

Mr Osborne announced a new cap from next year on welfare spending but said that state pensions would be excluded.

 

He also promised a further £3 billion in savings in the public sector but said the NHS would be excluded.

 

Detailing the changes to the retirement age, he confirmed that it would rise to 68 in the mid 2030s and 69 in the late 2040s.

 

The announcement has already drawn criticism with unions claiming that Britons were being expected to work "until they drop".

 

Mr Osborne concluded his statement saying: "It's a serious plan for a grown up country. But the job is not done.

 

By doing the right thing we are heading in the right direction. Britain is moving again, let's keep going.''

 

Key points from the statement: 

 

General

 

* Petrol tax rise of 2p a litre planned for next year is cancelled.

 

* Rolling back green levies takes an average £50 off energy bills.

 

* Financial resources provided to fund expansion of free school meals to all school children in reception, year one and year two.

 

* New priority right to move for social tenants who need to relocate for a job.

 

* New loans worth £1 billion to unblock housing developments including in Manchester and Leeds.

 

* Plans to increase train fares by 1% above inflation from January cancelled, so they go up in line with inflation.

 

Pensions

 

* New principle that people should spend one third of adult life in retirement implies increase in state pension age to 68 in mid 2030s and 69 in late 2040s.

 

* State pension to rise by £2.95 a week from next April, leaving pensioners £800 a year better off from Government measures since 2010.

 

* Pensioners offered opportunity to make voluntary national insurance contributions to boost retirement income.

 

Employment and growth

 

* Job seekers aged 18 to 21 without basic maths or English to be required to undertake training in these skills or lose benefits.

 

* Funding for Jobcentres to support 16 and 17 year olds in finding apprenticeship or traineeship.

 

* Employment to rise by 400,000 in 2013, say OBR. Unemployment forecast to fall from 7.6% this year to 7% in 2015 and 5.6% by 2018.

 

* OBR forecast that private businesses will create 3.1 million more jobs by 2019, more than offsetting reductions in public sector workforce.

 

Government borrowing

 

* Public sector net borrowing forecast to be 5.6% in 2014, then 4.4%, 2.7% and 1.2% in subsequent years, with a small surplus by 2018/19.

 

* Government will borrow £111 billion this year - £9 billion less than predicted in March. Borrowing to fall to £96 billion next year, then £79 billion, £51 billion and £23 billion in following years.

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