Member Article

Osborne: ?the economy is healing?

The Chancellor has made his Autumn Statement to the House of Commons, suggesting the UK is on the road to recovery.

Mr Osborne said the deficit was “still far too high for comfort,” and admitted the target for debt reduction as a percentage of GDP had been missed.

As predicted, an extension to austerity measures will stretch into 2018, as the share of national income spent by the Government will fall to 39.5% of GDP.

Mr Osborne was jeered as he said the economy was healing, although it was taking time; he said: “It’s a hard road but we are getting there and Britain is on the right track.”

Elsewhere, an end to plans for regional public sector pay was announced and the Chancellor would seek further efficiencies in Whitehall, NHS and schools.

On infrastructure, plans to upgrade the A1 to motorway standard to Newcastle, and plans to introduce the High Speed Rail to Manchester and Leeds were touched upon.

Broadband provision was also on the agenda, as Cambridge, Oxford and Portsmouth will all be provided with funds to develop super fast networks.

As expected, Mr Osborne talked about tax avoidance and suggested a further £2bn a year would come from a crackdown, and a potential £5bn could be accumulated over the next 6 years from “undisclosed Swiss bank accounts” of UK residents.

Lifetime pension allowances were cut from £1.5m to £1.25m, and the annual allowance was slashed from £50,000 to £40,000.

There will be more money for the Regional Growth Fund and for Local Enterprise Partnerships, and there will be extension to rate relief for small businesses.

Corporation tax will be cut by a further 1%, although banks would not benefit from the cut.

For investors, the Chancellor made some attractive changes, as the investment allowance will rise from £25,000 to £250,000.

Motorists will not experience a 3p increase in fuel duty, as plans for a rise have been cancelled and not merely postponed.

Read the reaction from businesses on Bdaily including: SMEs react; PwC on cuts to pension allowances; the ACCA digest the Autumn Statement; What does the Autumn Statement mean for SMEs?; Coutts’ perspective on the Autumn Statement; Florian Richter shares his views; Mills & Reeve’s thoughts on the Statement; The law no longer seems to matter; Grant Thornton comment; IPPR’s reaction to the Statement and Progress at last.

This was posted in Bdaily's Members' News section by Tom Keighley .