Last Thursday, George Osbourne announced the details of the 2011-12 budget, citing that it was a “budget for growth“. However a lot of the budget will not affect or mean a lot to students – so what should students be noting from this year’s budget?
First and foremost, the lower tax boundary has increased by £1,000 to £7,475 immediately, with a view to increase the boundary to £8,105 by April 2012. This means that you now won’t be taxed at all until you start earning over these amounts – which generally works out as taking back £200 straight away from the tax man if you earn £7,475, with more should the boundary increase again. Remember, the coalition had plans to eventually increase the lower boundary to £10,000.
More interestingly, the Government are going to look into merging National Insurance and Income tax into a single system. It will take years to be put into place, and in all likelihood have a few hiccups on the way, but it could mean a simpler system for understanding how and why you are taxed.
The next key note for students is the scrapped plans to increase fuel duty; plenty of students have cars to get them to University or to commute back home, and the Government had originally planned to increase the tax on a litre of petrol by as much as 4p. This has been scrapped, and as of 1800 GMT Thursday night, the tax was actually reduced by 1p. This doesn’t necessarily mean prices will drop accordingly, but if the tax was increased, petrol costs would have certainly gone up.
Alcohol prices will rise by at least 2% above inflation (inflation currently being 4.4%), so if you have a pint of beer a day to keep the lecturer away, you will be £25 worse off than if you did the same last year. Cigarettes have been quite heavily affected though, with the price of 5 packets of cigarettes a week costing £80 more over the course of a year now, but that said, the cost for wine and spirits have been less affected by the rise.
Other important news is that the Government will back 10,000 more applicants looking to buy their first home, as well as offer funding for 100,000 work experience placements, although it has not been outlined whether that will focus on teenage placements or for potentially supporting graduates.
Universities and students alike will be breathing a sigh of relief that the budget doesn’t come with further repercussions for cuts to Higher Education, given the past few months following the Browne Review. However, this budget does not mean more cuts are not on the way; the Government has said it may need to “claw back funds from universities – possibly by reducing the number of places on degree courses – if the majority of institutions charge the maximum” – currently eight Universities, including Essex, Manchester, Exeter, Oxford and Cambridge amongst others, have announced they plan to apply to charge the upper £9,000 fee.
Rumours suggest the University of Southampton could be set to submit its own application for a tuition fee level above the £6,000 lower cap in the coming weeks, with leaks suggesting it may be above £8,500 but below the £9,000 cap. However it is still uncertain as to what that level will be.
The Wessex Scene will be reporting more on Southampton’s announcements in the future.