Autumn Statement Overview
It is much welcomed news that we received today in the Autumn Statement and demonstrates that 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 Chancellor is cutting business rates which will mean a discount on business rates for all premises with a rateable value up to £50,000 worth £1,000 for small shops, pubs and restaurants.
What industry are saying:
The British Chambers welcome our plan and state; BCC. ‘Upgraded growth forecasts, lower borrowing forecasts, and increased business confidence are all indications that the UK economy is moving in the right direction…The Chancellor must continue to restrain current spending, and prioritise resources on investment in infrastructure and on creating the most competitive environment for wealth creation and enterprise.’ http://www.britishchambers.org.uk/press-office/press-releases/autumn-statement-initial-bcc-reaction.html
CBI. ‘it was absolutely the right call from the Chancellor to focus what money he had on relieving the cost of business rates, particularly on small companies and particularly on the high street’ (John Cridland, Radio 4, 5 December 2013).
FSB. ‘Action on business rates was the top priority for our members…capping business rates increases is a welcome measure. With around 300,000 firms relying on 100 per cent rates relief, extending the doubling of small business rates relief will be welcomed by many. Relaxing business rates for those firms that want to expand and incentivising new businesses into empty properties on the high street will boost retail and town centres. Retailers on struggling high streets will be especially heartened by the additional £1,000 relief. The commitment to clearing the appeals backlog and reviewing the system is a major step forward’ (FSB, Press Release, 5 December 2013, link<http://www.fsb.org.uk/News.aspx?loc=pressroom&rec=8425>).
Association of Convenience Stores. Local shops have strongly welcomed measures announced by the Chancellor to reduce the business rates burden for retailers. The proposed cut in business rates is fantastic news…This will help businesses to make investments in the next two years. We also support the cap on rates at 2pc…The reoccupation rate relief is also a strong short term incentive to bring empty properties back into use’ (ACS, Press Release, 5 December 2013, link<http://www.acs.org.uk/en/Press_Office/e-bulletin/details/index.cfm/obj_id/B02F4D42-0093-474D-B8F080405B9AAB7B>).
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.
•ONS statistics also show that in October, unemployment continues to be lower than the national average in Morley & Outwood and JSA (Job Seekers Allowance) claimants are at 3.1%, Yorkshire and Humber are 4% and the National Statistics are 5.2%.
•Whilst all out of work benefits in the constituency are at 4.9% of the population, Yorkshire & Humber are 6.4 and National figures are 6.2%.
•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 20 ppl 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.
•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, yrs 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.
5 December 2013
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