Autumn statement 2013: At a glance

 
5 December 2013
WEST END FINAL

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Tax & Welfare

PENSIONS will rise by £2.95 a week from next April, but future generations will wait longer for payments under a welfare overhaul designed to balance the Treasury books for the next 20 years.

The Chancellor said the pension age would rise as a result to 68 by the “mid-2030s” and 69 by late in the 2040s.

The retired will also be able to make voluntary National Insurance contributions to boost pensions.

But other welfare payments, including housing benefit and tax credits, will be subject to a new cap from 2015.

On tax, a £1,000 married couple’s allowance will be introduced from 2015, while next year’s 2p-a-litre fuel duty rise will be scrapped.

Jobs and Growth

EFFORTS to get more young people into work include scrapping a “jobs tax” that costs employers £1,000 in National Insurance payments for a worker on £16,000 a year.

This will be accompanied by a benefits crackdown. People aged 18 to 21 will lose their dole if they lack basic maths or English and refuse tuition — or if they reject training, work experience or a community job placement should they still be unemployed after six months.

An expected 3.2 per cent business rate rise was capped at two per cent. A scheme giving small firms relief from business rates was extended for another year. Shops with a rateable value of up to £50,000 will get a business rate discount worth £1,000.

Economy

WHAT a difference nine months have made. In March, the Chancellor grimly downgraded his growth hopes for 2013 for a fourth time, to 0.6 per cent. Today he more than doubled that and looked ahead to growth next year of 2.4 per cent, then 2.2, 2.6, 2.7 and 2.7 in 2018-19.

In March he swallowed his pride and announced higher borrowing. Today he cancelled £73billion of that over five years — and declared that he will not need to borrow in 2018-19. Although welcome news, it falls far short of his hopes in more optimistic days. In his first Budget in June 2010, he foresaw 2.9 per cent growth this year. As recently as 2011, he thought growth would hit three per cent in the election year. And although annual borrowing is coming down, the delayed timetable for the structural deficit to be eradicated has not improved.

Inflation floats down to hit its two per cent target in 2016. Unemployment falls to 5.6 per cent in 2019, but the national debt will hit a dizzying £1.57trillion by then.

The bigger question is whether experts — and voters — are convinced by the Chancellor’s claim to be building a recovery that will last, and not another boom-bust cycle.

Infrastructure and Transport

The Chancellor warmed up his City audience with £375 billion of public and private investments over 20 years. He agreed £50 million for the railway station at Gatwick Airport and a new study into Heathrow rail links from the south.

The £1 billion Northern line extension to Battersea moves ahead with a Treasury guarantee. Ministers will sell the Government’s 40 per cent stake in Eurostar as part of a £20 billion privatisation. But they dropped plans to toll the A14. The Treasury also guaranteed that it would support finance for the development of a nuclear power station at Wylfa, North Wales. Plans to sell off corporate and financial assets will be doubled to £20 billion between 2014 and 2020.

Cost of living

WITH the heat on the Government over energy bills, George Osborne intervened to stop them spiralling higher. He rolled back the impact of green and social levies to save many families an average £50 a year. But Labour, pledging a 20-month energy price freeze if they win in 2015, argued that ministers had not done enough to prevent bills rising. The Chancellor answered calls for a real-terms freeze on average rail fares, although some season tickets will go up by more. Motorists can expect no hikes in fuel duty or rise in the maximum £54.85 charge for an MOT before 2015. Town halls were encouraged to sell off expensive social homes to house more families.

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