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 Accounting News & Insights

Autumn Statement - Key Points

2nd December 2011

The Chancellor said that the Office for Budgetary Responsibility has calculated borrowing at £127bn this year, £120bn in 2012/13, £100bn in 2013/14, £79bn in 2014/15, £53bn in 2015/16 and £24bn in 2016/17.

PAY, TAXES AND ALLOWANCES:

  • Public sector pay awards will be frozen at 1% at the end of the two-year pay freeze.
  • Most working age and disability benefits will be inflated by the inflation figure of 5.2% and the child element in the child tax credit will be increased in line with inflation, rising by £135 a year in 2012-13.
  • The state pension age is set to rise from 66 to 67 from 2026. It is estimated this will save £59bn.
  • The state pension will rise by £5.30 to £107.45. Pensioners receiving pension credit will also benefit from an increase worth £5.35.
  • January 2012 planned 3p rise in fuel duty was cancelled and Augusts' increase will be limited to 2p.

HOUSING:

  • The Right to Buy scheme for council house tenants is back, offering a 50 % discount and the money going to build new homes, to stimulate the construction industry.
  • A £400m scheme will jump start stalled construction projects in England.
  • The Government will underwrite mortgages for 100,000 young families trying to get on the property ladder.

BUSINESS:

  • Mr Osborne has confirmed the credit easing programme, which will underwrite up to £40bn in low-interest loans for small and medium-sized businesses.
  • The National Loan guarantee scheme will use low government borrowing rates to lend to businesses at low rates. New loans and overdrafts to businesses with a turnover of less than £50 million will be eligible for the scheme and it should reduce interest rates by 1%.
  • An initial £1bn will be made available through a Business Finance Partnership, investing in small and medium-sized businesses through non-bank channels.
  • The bank levy will go up to 0.088%, ensuring that the Treasury raises £2.5bn.
  • The Chancellor has pledged particular support for the country's energy intensive industries, saying the Government will help them with the cost of the EU trading scheme carbon price floor.
  • The Regional Growth Fund will be increased by £1bn.
  • The small business rate relief holiday will be extended for a further six months.

TRANSPORT AND INFRASTRUCTURE:

  • The government is publishing a National Infrastructure Plan, identifying over 500 projects for the next decade.
  • Budget savings will enable the Government to plough £5bn into these projects along with a further £5bn it is committing over the next spending period. It has also struck an agreement with two groups of British pension funds to unlock an additional £20bn of private investment.
  • Infrastructure measures of £30bn will fund a number of projects creating 25,000 jobs.
  • Rail fare increases would be limited to retail price index (RPI) plus 1%, rather than RPI plus 3%.

FAMILIES, EDUCATION AND EMPLOYMENT AND SKILLS:

  • Families in the south-west of England will have their water bills cut by £50
  • A further £380m will be invested by 2014-15 to extend the Government's offer of 15 hours of free education and care a week for disadvantaged two-year-olds, covering an extra 130,000 children.
  • The Government will provide an additional £1.2bn for capital investment in schools in England, including an extra £600m to fund 100 additional Free Schools by the end of this Parliament.
  • A £1bn youth contract will fund measures including wage incentives for 160,000 young people to make it easier for private sector employers to take them on and at least 40,000 incentive payments for small businesses to take on young apprentices.


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Autumn Statement - Key Points

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