UK Chancellor reveals Autumn statement
Posted by Alastair Caithness on December 3, 2014
Funding for health services and freeze on fuel duty
Chancellor George Osborne unveiled his Autumn Statement today, saying he was presenting a forecast which showed the UK was the fastest growing of any major advanced economy.
He pointed to higher growth, reduced unemployment, falling inflation and a deficit reduced to half of what the Government inherited as evidence that the long-term economic plan was working.
Mr Osborne stressed the need to address “problems that remain unresolved in the British economy”.
Key announcements included a complete reform of Stamp Duty, additional funding of £2billion for health services, the doubling of Small Business Rate Relief for another year, a freeze on fuel duty and a rise in personal tax allowance to £10,600 next April.
The main findings of the Office for Budget Responsibility’s forecast were outlined, including:
- GDP growth forecast at 3%, with 2.4% growth forecast in 2015, 2.2% in 2016, 2.4% in 2017 and 2.3% in 2018 and 2019
- Borrowing forecast to fall to £91.3bn this year, £75.9bn next year, continuing to a predicted surplus of £4bn in 2018-19
- Deficit cut in half and predicted to fall to 4% next year, then 2.1%, then 0.7% before moving to surplus
- Inflation forecast revised down to 1.5% this year, 1.2% next year and 1.7% the following year
- Unemployment revised down in each year of the forecast, falling to 5.4% next year before settling at 5.3%
- “Meaningful real wage growth” predicted to pick up in 2015 and grow above inflation for the next 5 years
Other announcements included:
- Confirmation of additional funding of £2bn for health services, with foreign exchange fines from banks to be invested in GP services
- Publication of a Charter for Budget Responsibility next week, with a vote on it in the new year
- The £2,000 Employment Allowance is to be extended to carers
- A commitment to Lord Hutton’s public service pension reforms
- A freeze on Universal Credit work allowances for a further year, a cut to tax credits when overpayments are certain and an ending of unemployment benefits for migrants with “no prospect of work”
- Extension of inheritance tax exemption to aid workers who lose their lives in dealing with humanitarian emergencies
- Payments to EU to fall by £1bn net this year and next year
- VAT to be refunded for search and rescue and air ambulance organisations and hospice charities
- A 25% tax on diverted profits for multi-nationals is to be introduced
- A 50% limit on bank profits which can be offset against losses in previous years
- Measures to prevent tax avoidance
- Expansion of the British Business Bank and action to encourage peer to peer lending
- Strengthening of Entrepreneurs’ Relief and Social Investment Tax Relief
- Extension of the Funding for Lending scheme with a focus on smaller firms
- R&D tax credits for companies to increase
- The doubling of Small Business Rate Relief for another year
- A full review of the structure of business rates, including an increase to the discount for high street shops, pubs and cafes
- A reduction in the Supplementary Charge from 32% to 30%, expansion of ring fenced expenditure supplement and a new cluster area allowance for the oil industry
- Continuation of the freeze on fuel duty
- APD for children under 12 to be abolished, later extending to under 16s
- Government-backed student loans to be available for postgraduate masters degrees
- Investment in science, transport and culture among plans relating to ambition to “build a northern powerhouse”
- Savings in ISAs to retain tax-free status for spouses after their partner has died
- National Insurance contributions for businesses employing young apprentices to be abolished
- Personal tax allowance to increase next year to £10,600, with the higher rate threshold up from £41,865 this year to £42,385 next year
- Complete reform of Stamp Duty, with zero payment up to £125,000, 2% up to £250,000, 5% up to £925,000, 10% up to £1.5m and 12% above that. Changes to Stamp Duty are effective from midnight and will apply in Scotland until April 2015.