Autumn Statement by George Osborne in London

Autumn Statement 2011: main points by Rachel Cooper

Government will do “whatever it takes” to protect Britain from the
“debt storm” in Europe. He added that the Office for Budget
Responsibility (OBR) does not forecast recession, but it has revised
down its forecasts for this year’s growth to 0.9pc, from the 1.7pc
predicted in March, and for next year to 0.7pc. Growth is then
expected to pick up to 2.1pc in 2013, 2.7pc in 2014, and 3pc in 2015
and 2016.

• OBR assumptions are based on a solution to the eurocrisis, said Mr
Osborne. If not, there could be a “much worse” outcome for Britain. If
Europe goes into recession “it will be hard” to avoid one in the UK.
The Government is undertaking “extensive contingency planning”, he
said.
DEBT AND BORROWING

• The debt to gross domestic product ratio, which is forecast to stand
at 67pc this year, is set to peak at 78pc in 2014/15 and fall by the
end of the Parliament.

• Due to lower market interest rates, debt interest payments over the
Parliament will be £22bn less than predicted.

• The Chancellor said that the OBR was calculating 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 1pc at the end of the
two-year pay freeze.

• Most working age and disability benefits will be uprated by the
September inflation figure of 5.2pc and the child element in the child
tax credit will be increased in line with inflation, rising by £135 a
year in 2012-13. But, the £110 above-inflation increase that was
planned for 2012-13 will not go ahead.

• The state pension age is set to rise from 66 to 67 from 2026. Mr
Osborne said that it will save £59bn and will not affect anyone within
14 years of receiving their state pension today.

• The state pension will rise by £5.30 to £107.45, in a move which Mr
Osborne said was the largest ever cash rise. Pensioners receiving
pension credit will also benefit from an increase worth £5.35.

• January’s planned 3p rise in fuel duty was cancelled and August’s
increase will be limited to 2p.

HOUSING

• The Right to Buy scheme for council house tenants is back in action,
offering a 50pc 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

• As expected, 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 1pc.

• An initial £1bn will be made available through a Business Finance
Partnership, investing in smaller and mid-sized businesses through
non-bank channels.

• The bank levy will go up to 0.088pc, 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. “This amounts to
a £250m package over the parliament and will keep industry and jobs
here in Britain,” said Mr Osborne.

• The Regional Growth Fund will be increased by £1bn.

• The small business rate relief holiday will be extended for a
further six months.

Read what the CBI, the British Bankers’ Association, and other
business bodies thought of the Autumn Statement

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.

• Among the infrastructure measures that a new £30bn will fund include
electrifying the Transpennine Leeds-to-Manchester rail route, building
a new railway link between Oxford, Milton Keynes and Bedford, and
extending the Northern Line of the London underground to Battersea,
which will create 25,000 jobs.

• Mr Osborne confirmed that rail fare increases would be limited to
retail price index (RPI) plus 1pc, rather than RPI plus 3pc.

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.