Fact-check: What does the budget mean for Hackney?

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Hackney’s residents should be rejoicing according to George Osborne after his pre-election budget, the corner having apparently been turned and plenty of juicy incentives promised.

But is this really the case? Here at the Hackney Post, we decided to fact-check some of the Chancellor’s key announcements.

How much money comes to a Hackney citizen from the personal allowance changes? 

Hackney’s average wage is currently £31,637 per annum, which is £489 less than the London average. The good news from the budget is that Hackney’s average citizen will pay £40 less in income tax by 2017 or £80 less by 2018 if taken from today.

This is because of one of Mr Osborne’s flagship policies was the increase of the personal tax allowance, the amount of income you’re entitled to before tax, from £10,600 to £10,800 in 2016/17 and £11,000 in 2017/18.

With the threshold at which people start paying 40p income tax to rise above inflation from £42,385 in 2014-5 to £43,300 in 2017-8, and seeing as savings for such earners are double that of standard rate payers, this is a tax break for Hackney’s richer residents.

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Will it be any easier for first-time buyers in Hackney?

Currently only 26% of people in Hackney own their own home, almost half the London average. With the mean property price £610,124 it is easy to see why it’s harder to get on the property ladder, meaning Mr Osborne’s first-time buyer ISA has been welcomed in the borough.

The current standard size for a deposit to buy a house is around 10%, approximately £61,000 in Hackney. Close to double the average salary before tax.

With a ‘Help to Buy’ ISA, an aspiring homeowner can save up to £200 a month. The government will then contribute 25% on top of the money deposited, meaning there is a maximum bonus of £50 available for each calendar month.

The maximum a first-time buyer will be able to save with this ISA is £12,000. When combined with the government bonus of 25%, this rises to £15,000. These accounts also accrue interest like any other ISA, meaning the total amount could be more. However, it is unlikely to make life much easier for Hackney homebuyers, as even if it were a sum of £20,000 they’d still need to find around another £40,000 to be able to afford that all important first deposit.

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Is record employment happening in Hackney?

Hackney has historically struggled with unemployment, reaching a staggering 11.3 per cent in 2006. So, does Mr Osborne’s claims that more people are employed in Britain stack up for Hackney residents?

Although there has been an improvement for Hackney’s resident workforce, currently it is still struggling to reach the levels of employment enjoyed in the rest of the country.

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Beer drinkers budget bonanza in Hackney?

The average price of a pint in Hackney, taking into account all those craft beers, is approximately £4. Mr Osborne reduced the duty on beer by 1p, so assuming this will be passed onto beer drinkers rather than proprietor’s pockets, how much of a difference will it make?

Clearly, and not surprisingly since it is 0.0025 per cent of an average pint, it’s hard to see this budget policy adding anything to Hackney’s drinkers’ pockets.

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Self-employed life made easier in Hackney?

Hackney’s ranks of self-employed keep growing and currently represent 12.7 per cent of the borough’s population. The budget had two pieces of good news for them: firstly, they no longer have to file their tax return on January 31st and now have more flexibility, but despite Mr Osborne’s claims it is still annual.

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The second is that Class 2 National Insurance Contributions have been scrapped, which previously cost a large majority of the self-employed £143 a year. It’s good news for them but if you were earning £30,000 a year in profits, close to Hackney’s average income, you’d still be paying £1,984 in NIC.

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So, a good deal or not?

Although the budget contains a lot of good news for Hackney, as has been seen here, it isn’t as rosy a picture as George Osborne wanted to paint. At a time when living standards have not yet reached pre-recession levels every extra pound in people’s pockets will help, but the current economic situation gives little room for major give aways. It is close to the best Hackney could have hoped for under the current government, but whether it’s what Hackney wants is a different question.

(Featured Image: @Doug88888, Flickr)