Chancellor George Osborne has updated MPs on the state of the economy and the government’s future plans in his Autumn Statement. The key points are outlined below.
PensionsPeople in their 40s get state pension at 68
People in 30s at 69
Growth2013: 1.4% (up from 0.6%)2014: 2.4%
CutsExtra £1bn from government depts each year until 2017
Borrowing2014-15: £96bn, 2015-16: £79bn, 2018-19: £2bn surplus
Economic GrowthGrowth forecast for this year increased from 0.6% to 1.4%, revised up for next year from 1.8% to 2.4%, but then down slightly for the following three years to 2.2%, 2.6%, and 2.7%.
Revised figures from the Office for National Statistics show that UK GDP declined by 7.2% in 2008-09, not 6.3% as previously thought, equivalent in value to £112bn.
Government BorrowingThe UK’s “underlying” deficit – a measure that excludes the acquisition of the Royal Mail pension scheme and the effects of quantitative easing – has been revised down by the Office for Budget Responsibility (OBR) to 6.8% this year, and to 5.6% next year.
It is then expected to fall to 4.4%, 2.7% and 1.2% in the subsequent financial years.
The OBR predicts there will be a small cash surplus in 2018-19.
Borrowing is expected to come in at £111bn for this year, falling in 2014-15 to £96bn, then down to £79bn in 2015-16, £51bn the year after and £23bn the year after that.
Public debt this year is due to total 75.5% of GDP – £18bn lower than forecast in March – rising to 78.3% next year, before peaking at 80% the next year. By 2017-18, debt is expected to be more than £80bn lower than forecast in March.
Departmental budgets will be cut by about £1bn next year and the year after.
Benefits and PensionsThe state pension age is to increase to 68 in the mid-2030s and to 69 in the late 2040s. In April 2014, the state pension will rise by £2.95 a week.
Overall welfare spending is to be capped.
Anyone aged 18 to 21 claiming benefits without basic English or Maths will be required to undertake training from day one or lose their entitlement. People unemployed for more than six months to be forced to start a traineeship, take work experience or do a community work placement or lose benefits.
Taxes and AllowancesFrom April 2015, capital gains tax will be imposed on future gains made by non-residents who sell residential property in the UK.
From 1 January 2014, the rate of the bank levy will rise to 0.156%, and is estimated to raise £2.7bn in 2014-15 and £2.9bn each year from 2015-16.
Employer National Insurance contributions are to be scrapped on 1.5 million jobs for young people.
Stamp duty on shares purchased in exchange traded funds is to be abolished.
The personal income tax allowance will rise to £10,000 from April 2014, and then increase from 2015-16 by the Consumer Prices Index (CPI) measure of inflation.
A married couples and civil partners tax break, which is set to cost about £700m a year, is proposed to start in April 2015, enabling people to transfer £1,000 of their income tax allowance to their partners.
Business rates in England to be capped at 2% rather than linked to RPI inflation, with some retail premises in England to get a discount. Businesses moving into vacant high-street properties will have their rates cut by 50%.
From April, a new tax relief is to be introduced for investment in social enterprises and new social impact bonds.
Jobs and TrainingThe number of people claiming unemployment benefits is down 200,000, with unemployment now forecast to fall from 7.6% this year to 7% in 2015. Unemployment is then expected to fall further to 5.6% by 2018.
Total number of jobs to rise by 400,000 this year and 3.1 million jobs predicted to be created by 2019.
A boost in the government’s start-up loans scheme will aim to help 50,000 more people start their own businesses.
Export finance capacity available to support British businesses will be doubled to £50bn.
TransportPetrol taxes stay frozen – a planned rise of 2p per litre for next year is to be scrapped.
Regulated train fares will rise in line with inflation, not at 1% above RPI as planned.
The tax disc to show motorists have paid vehicle excise duty is to be replaced with an electronic system.
Education and FamiliesAn extra 30,000 places at English universities will be created in 2014-15. The following year, the current cap on student numbers will be abolished entirely.
Science, technology and engineering courses will receive increased funding, and a new science centre in Edinburgh University is to be named after Prof Peter Higgs, the discoverer of the Higgs boson particle.
The proportion of young people from disadvantaged backgrounds applying to university is up.
An additional 20,000 apprenticeships are to be funded over the next two years.
All pupils at state schools in England in Reception, Year 1 and Year 2 are to get free school lunches from next September, at an estimated cost of £600m a year.
HousingThe government hopes £1bn in loans will boost housing developments in Manchester and Leeds, among other sites.
The housing revenue account’s borrowing limit is to rise by £300m.
Councils are to sell off the most expensive social housing and rundown urban housing estates to be regenerated, and workers who live in council houses are to be given priority on housing lists if they need to move home to find a job.
InfrastructureTax allowances aiming to encourage investment in shale gas to cut tax on early profits by 50%.
More investment in “quantum technology”, which involves attempting to apply the strange behaviour of materials on a tiny scale to practical purposes, is promised.
Overseas AidThe government’s pledge to spend 0.7% of gross national income on international development is to be met without an increase to the current aid budget.
Source: BBC News http://www.bbc.co.uk/news/uk-politics-25232742