Chancellor George Osborne delivered his Autumn Statement to Parliament recently, which set out how the Government will continue to secure the public finances, support families with their costs, help businesses to grow and equip young people with the skills they need to succeed.
The economy is now growing faster than predicted. As a result, borrowing will be lower. By setting out an Autumn Statement that focuses on the continuing need to reduce spending, the government is reinforcing its commitment to tackling the deficit and help get the public finances back in to balance.
With the deficit and debt still at unsustainable levels, deviating from that plan now would be the biggest risk to recovery.
The Autumn Statement sets out the next steps in this long-term economic plan, including:
Delivering sound public finances
Helping hardworking people to keep more of the money they earn
Supporting businesses to grow and create jobs
Equipping all young people to compete in the global economy
Increasing the incentives to work and providing a benefit system that is fair to those who need it and those who pay for it
Clamping down further on tax evasion, avoidance and aggressive tax planning, ensuring that those with the most in society make a fair contribution to reducing the deficit
Taking action to reduce levels of tax debt and to reduce fraud, error and debt in the benefit and tax credit systems
Delivering sound public finances
In recognition of the need to continue to reduce the deficit and debt, the Autumn Statement sets out:
A reduction in Whitehall departmental budgets for 2014-15 and 2015-16 of 1.1%, excluding protected departments, local government, Security and Intelligence Agencies and HMRC
How a cap on welfare announced at Budget 2013 will work to control welfare spending
How future reviews of the State Pension age will work in practice
A review of the current fiscal policy framework to ensure that debt continues to fall as a percentage of GDP, including using surpluses in good years for this purpose
Help for families with the cost of living
To support families with the cost of living, the Chancellor announced in his Autumn Statement that the government is:
Freezing fuel duty for the remainder of this Parliament, saving the average motorist £11 every time they fill up their tank by 2015-16
Introducing the married couples transferable tax allowance, benefitting eligible couples by up to £200 in 2015-16
Introducing reforms to save the average energy bill payer £50, while maintaining support for the poorest families
Extending free school meals to all children in reception and years 1 and 2 and cap the average increase in regulated rail fares for 2014 in line with the Retail Prices Index, complementing the decision by the Mayor of London to cap average fare increases in London for 2014
Help for businesses to grow
To help businesses grow and create jobs and to provide help for the high street, the Government is:
Introducing a cap on the Retail Prices Index (RPI) increase in business rates in England to 2% in 2014-15
Introducing a £1,000 business rates discount to help the high street
Doubling the Small Business Rate Relief for a further 12 months from 1 April 2014 to help 540,000 firms
Making it cheaper for businesses to employ young people by abolishing National Insurance contributions for under-21s earning below £813 per week
Introducing a new tax relief for shale gas and support for the creative industries
Ensure young people have the skills they need
In order to ensure all young people can compete in the global economy, the Chancellor set out that that the government will:
Remove the cap on university places so more people can go into higher education – it is estimated this will allow 60,000 more young people to go to university every year
Provide an extra £40 million to increase the number of people starting higher apprenticeships by 20,000
The Government’s plan to build a stronger economy is underpinned by its commitment to deliver a fairer society. The Autumn Statement will help to provide a benefit system that is fair to those who need it and those who pay for it, and clamps down further on tax evasion, avoidance and aggressive tax planning.
By David White a Partner in Charterhouse, based in Beaconsfield
