Today Thursday 25 November Chancellor George Osborne set out the current state of the economy in the Autumn Statement and his spending plans for the next four years.
He stressed the UK economy was in crisis five years ago and since then we have turned a real corner. Debt is set to fall again this year and he said that Britain has grown faster than any other G7 countries since 2010.
The growth forecast remains unchanged from the July budget for 2015, set at 2.4%. Growth in subsequent years is predicted to be 2.4%, 2.5%, 2.4% and 2.3%.
Debt as a share of GDP forecast is to fall to 82.5% in 2015-16, before dropping to 81.7%, 79.9%, 77.3%, 74.3% and 71.3% in subsequent years.
The key points that affect businesses in Wiltshire are as follows:
- Planned £4.4bn cuts to tax credits watered down, with changes to income thresholds and taper rates due in April abandoned
- Department for work and pensions budget to be cut by 14%
- New 30-hour free childcare subsidy for parents of three and four year olds to be limited to those working less than 16 hours per week
- Only those earning less than £100,000 will be eligible for the childcare subsidy from 2017.
- Local government to keep all revenue from business rates by the end of the Parliament
- 26 new enterprise zones to be created or extended
- Capital funding of transport projects to rise by 50%
- Electrification of further sections of the Great Western Railway to go ahead
- Uniform business rates to be abolished, with councils and elected mayors allowed to cut or raise under certain conditions
- Councils to keep all business rates income by 2020 with a central block grant phased out
- Science budget to rise to £4.7bn
- Apprenticeship levy set at 0.5% of employee wage bill, with £15,000 allowance for eligible firms
- State pension to rise by £3.35 a week to £119.30 next year
- Every individual and small business to have their own digital tax account by the end of the decade
Reacting to the Chancellor’s Autumn Statement and Spending Review Ian Larrard, director of the Swindon and Wiltshire Initiative, part of Business West said:
“Once again the ‘builder’ Chancellor has used the tools at his disposal to create a Statement that the majority of businesses will applaud. The statement, widely predicted as being gloomy, was surprisingly upbeat in business terms as he started by citing the South West as a well performing region with the lowest unemployment rate in the country.
“The first win for business was the increased funding for much needed infrastructure improvements, for example the £2 billion investment to upgrade the A303. Businesses can only operate as well as the environment they are in, and the announcement that Britain will be spending a higher proportion of its income on infrastructure than at the start of the parliament will be met with applause. This included big increases in the transport capital investment budget, with a 50% rise.
“We then heard the Chancellor turn to ‘huge reform to raise the skills of the nation’. High youth unemployment and business skills gaps are a cause for national embarrassment, and in Swindon we are working with both business and education to bridge this gap. A package of reform for education along with details of the Apprenticeship Levy will be welcomed by businesses from the smallest to the largest. Although there are reservations as to how this will work in practice.
“It was also good to see political emphasis on fixing the housing crisis. The doubling of the housing budget was welcome news, but the overwhelming emphasis on home ownership may be a mixed blessing. On the one hand, higher skilled workers are likely to want to own their own home, so making this easier should make them more likely to stay in our region. However the lack of lower cost rented options may start to hit the lower part of our labour market. It is also worrying to see that the Office of Budget Responsibility is still predicting that house price rises will continue to outstrip earnings.”