ARTICLES


  • Living Costs

    Mid Devon Advertiser
    23 February 2018

    Last week saw the release of the inflation figure for January – 3%. This is the average rate that prices are rising across a basket of around 700 goods and services which are thought to represent our typical purchases. The latest new additions to this basket included cycle helmets, gin and flavoured cider indicating an increasing interest in getting around on bikes and a shift in the nation’s drinking habits. Broadly speaking of course the higher the inflation rate the tougher it is on consumers. The cost of living rises and during recently real wages have been declining as a result. 3% is the same as it was in December but 0.1% lower than in November and the projections are for inflation to fall away over the coming year and to move down towards its target level of 2%. Real wages are accordingly expected to stop falling during 2018 before rising from 2019 onwards when we should start to feel a little better off. As a figure derived from a large number of goods and services inflation varies of course depending on the item. One that caught my eye is the fact that fuel prices at the pump have been rising less rapidly than the overall headline rate something that will provide much relief to motorists. Given the squeeze on real incomes I have been doing what I can at the Treasury to help out. In the budget there were three important announcements that will help with living standards. Firstly, we announced that the National Living Wage will be increased by 4.4% this April (well above inflation) to help the lowest paid. This will mean £600 extra for the average full time employee on the National Living Wage. We also increased the income tax personal allowance by above inflation. The allowance is the amount of earned income that you can receive without paying any tax. The figure will rise to £11,850 in April. Over 30 million taxpayers will benefit from this change and since 2010 we have taken around 3 million people out of income tax altogether through raising this threshold. For the eighth year in a row we also once again froze fuel duty meaning that compared with the duty regime in 2010 we have saved the average motorist £800. As the Minister responsible for UK tax, lowering the tax burden is one of my main missions. A couple of weeks ago I took legislation through parliament that eased the level of business rates for our vital local businesses worth in total £2.3 billion over the next 5 years. I will continue to work on further reductions in tax where they can be afforded and I am always keen to hear from constituents about where further tax reductions might be made. Also your ideas for expenditure saving to pay for them. If you have any thoughts then please contact me via my website at www.melstridemp.com. You can also follow me on Twitter at @MelJStride.







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