Autumn Statement 2011 - Analysis

Autumn Statement 2011 - Analysis

November 29th 2011 5:22 pm

general

Well the Chancellor has updated the country on his plans for the economy. Below is a summary of key points made: The Econ ...

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Well the Chancellor has updated the country on his plans for the economy. Below is a summary of key points made:

The Economy

  • 2011 ecomomic growth forecast changed to 0.9% from 1.7%
  • 2012 ecomomic growth forecast changed to 0.7% from 2.5%
  • Growth expectation for 2013->2.1%, 2014->2.7%, 2015->3%

Borrowing

  • Government borrowing to be increased by £111 billion over the next five years
  • 2011/12 -> £127bn
  • 2012/13 -> £120bn
  • 2013/14 -> £100bn
  • 2014/15 -> £79bn
  • 2015/16 -> £53bn
  • The debt to GDP ration will hit a peak of 78 percent in 2014 but start to falling from there

Public Sector - Pay/Pensions

  • Pay rises are to be capped at 1 percent for 2 years after the freeze expires at the end of next year
  • Regional pay adjustments are to be reviewed
  • State pension age changes are to be brought forward - the rise to 67 years will be from 2026 rather than 2034

Transport - Fuel/Rail

  • From January rail fare price rises to be capped at 6 percent on average. This is 1 percent above inflation. Cap is larger than expected (8 percent).
  • January 2012 fuel duty rise no longer planned, instead duty will go up by 3 pence in August 2012.

Social Security/Benefits

  • Working age related benefits to be increased by 5.2 percent, tracking inflation, from next year.
  • The basic state pension will be £107.45 per week from next year. A rise of £5.30 a week.
  • Disability element of tax credits will track inflation but other tax credits will have a below inflation tracker.
  • Child element of child tax credit will have a £110 planned rise, scrapped.

Business and Employment

  • Office of Budget Responsibility (OBR) report a forecasted 710,000 public sector job losses. A rise of 310,000.
  • SME's to have access to £40 billion in low-interest loans backed by a credit easing programme.
  • Business finance partnership is to raise money for medium-sized businesses with a £1 billion fund.
  • Regional Growth regeneration to be boosted with an extra billion pounds of funding.
  • Support packages for energy-intensive firms (£250m) and £500m for science sector.
  • Business rates holiday relief extended to April 2013 for small businesses
  • Planning applications to get new time limits
  • Youth contract to provide 6 month employment placements for 410,000 young people, provided by £1 billion fund.
  • Bank levy will be increased from January 2012

Family and Education

  • Schools in England to get funding boost of £1.2 billion - half of this to create more school places, the rest to build 100 additional schools
  • Water bill reduction of £50 for south-west families
  • Deprived two year olds to get more childcare places - this has doubled to 260,000

Housing

  • People struggling to get a mortgage to get help by Mortgage Indemnity Scheme which can provide up to 100,000 people a 5% deposit contribution
  • Plans to revive halted contruction projects in England with a scheme costing £400 million
  • Social housing tenants who wish to purchase their homes to get a 50 percent discount

Infrastructure

  • New spending of £5 billion spread over 3 years, this includes £1 billion for rail
  • Plans for 35 road and rail projects
  • Further £20 billion of infrastructure investment to be sourced from pension funds

Foreign Aid

  • Capped at 0.7% of total GDP

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