Autumn statement: putting Britain on the right track
Britain’s economic plan is working, but the job is not yet done – we need to keep taking the difficult decisions to secure the economy for the long-term. The biggest risk to Britain comes from those who would abandon the plan – and borrow and spend more. Our long-term plan will secure a responsible recovery for all.
The Autumn Statement shows the plan is working:
· Growth upgraded. GDP forecasts are revised up from 0.6% to 1.4% in 2013 and from 1.8% to 2.4% in 2014.
· Employment up. Forecasts of employment growth have been revised up from staying flat to rising by 400,000 this year. Unemployment is predicted to fall to 7% in 2015 and 5.6% in 2018.
· Cutting the deficit. The deficit was 11% in 2009/10. It is projected to fall to 6.8% this year – lower than the 7.5% forecast in March. It will fall to 5.6% in 2014/15 and 4.4% in 2015/16. By 2018-19 the OBR expects to run a surplus.
· Debt falling faster. Debt this year will be 75.5% of GDP - £18 bn lower than forecast in March. It falls one year earlier in March 2016/17 than forecast in March.
The Autumn Statement sets out the next steps in our long-term economic plan to help hardworking people:
· Reducing the burden of business rates. This is help for the high street and will support businesses to create more jobs.
* Help for the high street: up to £1,000 allowance in 2014/15 for retail premises with a rateable value of up to £50,000 – including shops, pubs, cafes, and restaurants.
* Capping the increase in bills to 2% in 2014-15 – businesses were expecting a 3.2 % rise.
* Extending the doubling of the Small Business Rates Relief to April 2015.
* A reoccupation relief for 18 months with a 50% discount for new occupants of retail premises empty for a year or more.
· Freezing fuel duty until 2015. Fuel duty will be frozen for the remainder of the Parliament. It will be 20p per litre lower by the end of the Parliament compared to plans inherited from Labour. This saves the average motorist £11 every time they fill up their tank.
Youth package:
* Scrapping employers’ National Insurance for under-21s. Up to earnings of £813 per week (equivalent to the higher tax rate).
* Giving young people the skills they need to succeed. Jobcentre Plus will help 16 and 17 year olds not in work find an apprenticeship or a traineeship. There will also be a pilot so anyone aged 18 to 21, who does not have basic maths or English, has to undertake training immediately or lose benefits.
* A university place for anyone with the right grades. We will abolish the arbitrary cap on student numbers.
Other Measures:
· Freezing rail fares. We are limiting the cap on average regulated rail fare increases to RPI for 2014.
· Recognising marriage in the tax system. In future the allowance will increase along with the personal allowance.
· £50 off energy bills. Households will save an average of £50 on their energy bills. It reduces the impact of government policies on energy bills, while maintaining support for the poorest families.
· Free school meals. We’ll provide funding for free school lunches for all state-funded pupils in reception, years 1 & 2, and disadvantaged students in 6th form colleges from Sep 2014. We’ll provide capital funding to increase capacity in school kitchens.
· Clamping down on tax avoidance and evasion. This will raise over £6.8 billion across the next five years.
The Autumn Statement entrenches Britain’s commitment to sound public finances.
· Capping total welfare spending. This will not include the Basic State Pension or the most cyclical of jobseekers’ benefits.
· Running a surplus in the good years so we fix the roof while the sun is shining. MPs will vote on a new Charter for Budget Responsibility in December 2014. This will include plans to run a surplus in the good years, reduce the national debt, and look at a shorter and more binding fiscal mandate.
· Setting the principle for the state pension age. The Pensions Bill, currently in Parliament, will put in place reviews of the pension age every five years. The Autumn Statement sets out the principle of those reviews - that people should spend up to a third of their adult life in retirement. It suggests an increase to 68 in the mid 2030s. Future taxpayers will save around £500 bn.
· Controlling Whitehall spending. Contingency reserves will be reduced by £1 billion this year and departmental budgets by a similar amount in the next two years. Protections for the NHS, schools, security agencies and HMRC will apply. Local government will be exempt in return for freezing council tax.
Comments
cutting deficit - ok the deficit is lower that it was and is falling (which is a good thing, even if I would like it to fall quicker, but thats by the by) but there is still a deficit
debt falling faster now call me a little stupid here if you must but, we just established above that there is a deficit. How on earth when there is a deficit (borrowing more money) can debt be falling faster?? it may be rising slower, but falling faster?????? pleasse explain this so a thicky like me understands.
then i can look at the rest, cut in business rates looks good
though some of the methods seem a little dodgy to me, much like the energy price comment i left.
fuel duty is a must, but i want a cut not a freeze
NI payment cut very good, though limiting at 21 you need to be careful it does not harm over 21 employees
Freezing rail fair - is this not a little like freezing gas prices (just asking)
Marriage in tax - well of course i like it, but why not just give everyone a slightly higher tax free threshold, it seems wrong to me to discriminate on marital status
Energy bills- covered a lot in earlier post
*s*Free*/S* tsx payer funded school meals - what a silly idea, tax everyone to pay for a meal for every kid in school.
Clamping on tax avidance - hmm, going to scrap the free movement of capital? good luck on that. more seriously tax avoidance takes place because tax rates are too high, just cut taxes and to be fair it will bring in more.
capping welfare spending: well done, not before time either
pension age people have paid into national insurance all their lives in order to retire at 65, so whats the problem, unless of course its a ponzi scheme????
whitehall spending this needs to be brought under control, the most out of control areas i think are the NHS, schools, security agencies and HMRC also i think Copeland council are out of control so this helps a lot, oh wait a moment........
Note: i did not know that blogger does not seem to like the html S tag :)
The Html s tag where the s is written between < and > would normally cause a strike trough, which looks like a word has been crossed out
so above my intention was to cross out the word "free" and replace it with tax payer funded. even though i did make a mess and spell it tsx payer funded (ooops)
Its good advise that though, whenever a government or local council is offering something "free" they never are, its always tax payer funded. every penny they spend is a penny that must be raised in taxation, actually its usually more than a penny that must be raised to pay the admin costs of doing it.
Where you have the sort of gigantic national debt Britain now has, it essential to aim to start paying it back in absolute terms, and continue to do so at least in good years.
Perhaps "We will reach the point when debt falls faster" would have been a clearer headline than "Debt falls faster" as what the item was getting at is that we now expect to get to the point where debt starts to fall a year earlier.
If the economy is growing, and you move from a big deficit to a smaller one to eventually getting a budget surplus, the point where debt starts to fall as a proportion of GDP arrives before the point where you have a budget surplus and debt falls in absolute terms.