Autumn Statement - Key Points
Business
- OBR forecast of total public sector job losses up from 400,000 to 710,000
Credit easing programme to underwrite up to £40bn in low-interest loans to small and medium-sized firms
- £1bn business finance partnership to raise money for medium-sized firms
- Regional Growth regeneration fund to get £1bn in extra funding
- £250m support package for energy-intensive firms, £500m for science
- Business rate holiday relief for small firms extended to April 2013
- New time limits for planning applications
- £1bn "youth contract" to subsidise six-month work placements for 410,000 young people
Properties
- Mortgage indemnity scheme to help up to 100,000 people buy homes with 5% deposit
- £400m scheme to kick-start stalled construction projects in England
- 50% discount for social tenants wanting to buy their own homes in England
Transport
- The average rise in regulated rail fares to be capped at 6% - 1% above inflation - in January, rather than the 8% cap expected
- Planned 3p fuel duty rise in January to be scrapped. But duty will go up by 3p in August.
Transport Infrastructure
- £5bn new spending over three years, including £1bn for the rail network
- Go-ahead for 35 road and rail projects across England
- Aim to unlock a further £20bn in investment from pension funds.
Public Sector
- 1% cap on public sector pay rises for two years after the end of current freeze next year
- Review into regional pay adjustments
- Rise in state pension to 67 to be brought forward to 2026 from 2034
Welfare
- Working age benefits to be uprated by 5.2% next year, in line with inflation
- Basic state pension to rise by £5.30 next year to £107.45
- Inflation-linked rise in disability element of tax credits but below-inflation increase in other tax credits
- £110 rise above inflation in the child element of the child tax credit scrapped
Education and Families
- £1.2bn extra spending on schools in England
- Half to go to councils for more school places and half for 100 additional free schools
- £50 cut in water bills for families in the south-west of England
- Childcare places for most deprived two-year-olds in England doubled to 260,000
Overseas Aid
- Funding will not exceed 0.7% of total GDP
Economic Growth
- 2011 forecast revised down to 0.9% from 1.7%
- 2012 forecast revised down to 0.7% from 2.5%
- In 2013, 2014 and 2015, forecast growth will be 2.1%, 2.7% and 3%
Government Borrowing
- Extra £100bn in borrowing over four years
- Borrowing forecast to be £127bn in 2011-2, falling to £120bn, £100bn, £79bn and £53bn in following years
- Debt to GDP ratio to peak at 78% in 2014-5, falling afterwards
Budget Forecasts
- In March 2011, the OBR predicted the economy would grow 1.7% in 2011 and 2.5% in 2012
- It forecasts government borrowing of £146bn in 2010-11, falling to £122bn in 2011-12, £101bn in 2012-3, £70bn in 2013-4, £46bn in 2014-5 and £29bn by 2015-16.
A full summary of the changes outlined in the Autumn Statement will appear on the Chiene + Tait website shortly. If you have any queries about an aspect of the Autumn Statement, please email our team at mail@chiene.co.uk