Chancellor George Osborne presented his 2013 Autumn Statement to the House of Commons in relatively buoyant form. He announced that economic growth forecasts for this year have more than doubled from 0.6% to 1.4%, but was keen to emphasise the importance of achieving a ‘responsible recovery’ by sticking to the austerity plan.
Despite borrowing also seeing significant downward revisions, with the underlying deficit revised down to 6.8%, the Chancellor warned that ‘difficult decisions remain’ and indicated that an increase in the State Pension Age to 68 will take place earlier than previously planned. Whitehall budgets will be cut by around £1 billion next year, and overall spending on welfare will be subject to a new cap in future years.
There was some better news for business, with the Chancellor offering relief in the form of a new 2% cap on business rates increases in England, together with an extension of Small Business Rate Relief for a further year. In addition, a new 50% ‘reoccupation relief’ will be available to local retail businesses, and a rates discount of up to £1,000 will be applied to some small shops, pubs and other retail properties.
Another key announcement for businesses was the scrapping of employer national insurance contributions (NICs) for most under?21s from 2015. April 2015 will also see the application of capital gains tax to gains made by non?residents who sell residential property in the UK.
There were a number of measures aimed at supporting families, including plans to introduce a new transferable personal tax allowance for some married couples and civil partners, as well as introducing an average £50 saving on energy bills, which will be achieved through rolling back green levies.
Other headline?grabbing measures announced by the Chancellor include free school meals for infants, a scrapping of 1% above inflation increases to rail fares, the abolition of next year’s planned 2p per litre fuel duty rise, and the demise of car tax discs which will be replaced by an electronic vehicle excise duty system after over 90 years in circulation.