This was always going to be a tough Autumn Statement for Chancellor George Osborne, albeit perhaps not quite as tough as his first after the Coalition was formed, having been told by the outgoing Chief Secretary to the Treasury that ‘there’s no money left’.
But things are certainly not looking as bright as they might have seemed in the summer Budget, which was held soon after the election victory. One of his flagship measures in that Budget, the tax credit reforms, was rejected by a House of Lords vote, while the deficit that he’s pledged to cut has been falling at a much slower pace than he would like, with recent tax receipts well below expectations.
Despite this, the Chancellor managed to make the country’s finances sound positively rosy, with the soundbites coming thick and fast, from having a long term plan for the country’s economic future and sound public finances through to the inevitable ‘being ready for whatever storms lie ahead’, ‘fixing the roof when the sun is shining’ and ‘we’re all in this together’.
So what did he actually announce? Well, he managed to slay the tax credits issue by announcing that most of the changes that he had proposed will not now take effect after all, on the basis that tax credits are being phased out anyway as the Government introduces universal credit. He will assuage popular opinion though by stopping paying housing benefit and pension credit payments to people who’ve left the country for more than a month – assuming of course that they admit that they’ve gone.
After the summer Budget’s announcement concerning the restriction of interest relief for buy-to-let landlords, there was a further blow aimed squarely in their direction. From April 2016 new rates of Stamp Duty are to be introduced that will be 3% higher on the purchase of investment properties and second homes in the UK – so we can expect a sudden short-term improvement in the housing market as those who wish to invest try to make their purchases before the changes take effect.
The main announcement for big business was probably that the apprenticeship levy will come into effect in April 2017 at a rate of 0.5% of an employer’s pay bill, but with a £15,000 allowance that will mean that the levy will only be paid on employers’ pay bills over £3 million. For small business, rate relief is to be given for another year and loans are to be extended for small builders.
Locally, flood defence schemes may be amongst those being considered, Ipswich was mentioned as being one of the contenders as a rural Enterprise Zone, and Cambridge will get investment in both the Cavendish laboratories and new hospital funding.
Only time will tell of course whether George has succeeded in achieving his laudable aims, and slaying his dragons………….