The crucial economic announcements made by chancellor George Osborne in his autumn statement to the Commons
Here are the crucial economic announcements made by chancellor George Osborne today in his autumn statement to the Commons.
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• Office for Budget Responsibility adjusts growth forecast downwards to -0.1% this year (previous forecast for 2012 was 0.8%).
• OBR says trade, not austerity, to blame for lower growth, Osborne says.
• OBR forecasting 1.2% growth next year, 2% in 2014, 2.3% in 2015, 2.7% in 2016 and 2.8% in 2017.
• 2008-09 contraction was deeper than previously thought: GDP shrank then by 6.3%.
• Deficit has fallen by a quarter in last two years and will “continue to fall”.
• Deficit forecast to fall from 7.9% last year to 6.9% this year, then 6.1%,
5.2%, 4.2%, and 2.6%, reaching 1.6% in 2017-18.
• £33bn saving on interest payments predicted two years ago.
• OBR says government is “on course” to meet target of getting rid of structural deficit over five years.
• Period of austerity extended by one year to 2017-18.
• OBR says the government will miss its target of getting debt falling as a percentage of GDP by 2015. It will be falling by 2016-17, he says.
• Net debt forecast to be 74.7% this year, then 76.8% next year, then 79%, 79.9%, falling to 79.2% in 2016-17 and 77.3% in 2017-18.
• Borrowing set to fall from from £108bn this year to £99bn next year, £88bn in 2014, then £73bn, then £49bn, then £31bn in 2017.
• Since the election, 1.2m jobs created in the private sector.
• OBR predicting unemployment to peak at 8.3%.
• “It is a hard road, but we’re getting there,” says chancellor. “Turning back now would be a disaster.”
• Bonds trading at yield of 1.81% instead of 3.14% two years ago.
• Departmental budgets cut by 1% this year, and 2% next year. NHS and schools exempted.
• Local government budgets cut by 2% in 2014.
• Share of national income spent by the state to fall from 48% of GDP in 2009-10 to 39.5% in 2017-18.
• International development spending remains at 0.7% of GDP (although GDP now lower).
• Capital investment in infrastructure totalling £5bn over two years
includes £1bn for roads, upgrading A1, A30, and M25. High Speed 2 rail link will be extended to north-west England and West Yorkshire, and London’s Northern Line will be extended to Battersea.
• Investment of £600m in science, £270m for further education
colleges, and £1bn for schools.
• The 40% higher rate tax threshold will go up by 1% in 2014 and 2015 from
£41,450 now to £41,865 and then £42,285.
• Personal tax allowance to rise by £235 more than planned in April 2012. It will now go up £1,335 in total next year. That will take the personal allowance to £9,440. Extra rise will not be adjusted so will benefit higher rate taxpayers too.
• From April 2014 main rate of corporation tax will drop 1% to 21%.
• Three pence per litre fuel duty rise planned for January cancelled.
• Bank levy rate increased to 0.13% next year.
• Additional HMRC spending of £77m to fight tax avoidance by wealthy individuals and multinationals – expected to increase money collected from tax evasion and avoidance by £2bn a year.
• No new tax on property.
• The capital gains tax annual exempt amount will increase by 1% in 2014 and 2015, reaching £11,100.
• The inheritance tax nil-band rate will rise from £325,000 now to £329,000 in 2015-16.
• New measures to save £1bn over four years from fraud, error and debt in tax credit system.
• Basic state pension to rise by 2.5% next year to £110.15 a week.
• Treasury to raise £1bn by cutting tax relief on pensions. Lifetime allowance to drop from £1.5m to £1.25m. And the annual tax free limit will go from £50,000 to £40,000.
• Isa limit to go up to £11,520.
• Most working age benefits – including jobseekers’ allowance, employment and support allowance and income support – to be uprated by 1% for the next three years.
• Child benefit to rise by 1% for two years from April 2014.
• Welfare changes save £3.7bn by 2015-16.