Osborne's Autumn Statement: what you need to know
Chancellor's 'mini-budget' puts squeeze on welfare benefits and raids higher earners' pensions
AUSTERITY will last longer than previously expected and UK debt will start falling a year later than hoped, Chancellor George Osborne told the Commons in his Autumn Statement yesterday. New measures to help get the debt down include a squeeze on welfare benefits and a reduction in the pension allowance for high earners. Here are the main points of the Chancellor's 'mini-budget':
Working age benefits will rise by one per cent per year for the next three years, which means a real-terms cut because inflation is running at 2.7 per cent. Child benefit will also rise by only one per cent for two years from April 2014. Carer and disability benefits will, however, be increased in line with inflation.
The annual tax-free allowance is to be cut from £50,000 to £40,000 from 2014. The total pension allowance for an individual over their lifetime will fall from £1.5m to £1.25m. The basic state pension will rise by 2.5 per cent next year to £110.15 per week.
January's 3p-a-litre increase in fuel duty has been cancelled. The income tax threshold – the level at which you start paying tax – will be raised to £9,440, which is £235 more than previously announced. The 40 per cent income tax threshold will rise by one per cent – again, less than inflation - in 2014 and 2015.
The annual stocks and shares ISA limit will be raised by 2.1 per cent to £11,520. The cash ISA limit will rise to £5,760.
The main rate of corporation tax will be cut by an extra one per cent to 21 per cent from April 2014. The bank levy rate will be increased to 0.13 per cent next year. £1bn extra capital will be provided for the Business Bank.
Most Whitehall departments budgets will be cut by one per cent next year and two per cent in 2014, the money saved to be spent on £5bn worth of infrastructure projects to help promote growth. £1 billion will be spent on road-building, including an upgrade of the M25. A £1bn loan will be put up to extend London's Northern Line south to Battersea. A further £1bn will be spent on building new free schools and academies. Broadband will be upgraded in 12 cities.