Autumn Statement 2015: key announcements
Chancellor George Osborne has delivered the Autumn Statement. Here’s a summary of what was announced.
The Spending Review sets out how £4 trillion of government money will be allocated over the next five years, so the government can invest in priorities like the NHS, defence and housing.
On average, departmental spending will fall at less than half the rate of the previous five years.
1. A £10 billion surplus by 2019-20. Last year, the deficit was halved compared to its 2009 to 2010 level. Next year, it will be down by three quarters. Over the next four years, the deficit will have been eliminated and the government will be running a surplus – raising more than is spent.
2. Tax credits will now remain unchanged after a vote against planned cuts in the House of Lords. But Changes to the criteria of Universal Credit - a benefits system that sees tax credits and five other benefits merged into one in the next few years - were voted through recently and will also put a squeeze on some families making new claims.
New claims for tax credits will be switched to Universal Credit from 2018.
3. A total of £1bn will be raised by 2021 owing to a change to stamp duty in England and Wales.
A 3% surcharge on stamp duty when some buy-to-let properties and second homes are bought will be levied from April 2016.
This means it will add £5,520 of tax to be paid when buying the average £184,000 buy-to-let property. The new charge would have hit 160,000 buyers if it had applied last year.
4. The housing budget is being doubled to £2bn a year, in an attempt to deliver 400,000 new homes by the end of the decade.
There will also be a London Help to Buy scheme for those within the capital who can save a deposit of 5% of the value of the property they want to buy. They will be able to get an interest-free loan, for up to five years, worth up to 40% of the value of that home.
5. The government will protect overall police spending in line with inflation – an increase of £900 million by 2019-20.
£1 billion will also be spent on 4G communications for police forces and other emergency services, allowing officers to take mobile fingerprints and electronic witness statements. This will free up officers’ time, saving around £1 million a day when fully operational.
6. Councils will be given even more powers over decision making in their local areas. They will be able to add 2% on council tax to pay towards social care in their areas, if they wish.
7. The Chancellor has announced a £6bn spending boost for the NHS, as fears grow that the healthcare system has been underfunded. It is the first £6bn of a total £10bn boost.
8. From April 2016, the basic state pension will rise to £119.30 per week, an increase of £3.35. This will be the highest real terms increase to the state pension for 15 years.
9. Schools funding will be protected in line with inflation. £23 billion will be invested in school buildings, creating 600,000 extra school places and 500 free schools.
Maintenance loans will also be available to higher education students who study part time from 2018.
10. The Ministry of Defence’s budget will be increased by more than £5 billion by 2020-2021.
11. Aid funding will continue to be protected, including a new £1 billion global vaccine fund speed up the development of drugs to eliminate the world’s deadliest infectious diseases.
12. New flexible season tickets will soon be available on certain lines across the country, including C2C between London and Essex, and the Great Northern Route on Thameslink. This means that commuters will be able to buy part time season tickets, if they wish.
Commuters will also soon be able to claim compensation from their rail tickets if their train is more than 15 minutes late.
13. Scotland, Wales and Northern Ireland will all receive more money to be spent on infrastructure projects, with each government deciding where this will be spent.
This will be an increase of around 14% for Scotland, 16% for Wales and 12% for Northern Ireland.
14. Around £15 million in VAT is collected each year on sanitary products. While EU rules mean that the government cannot remove all VAT on sanitary products, an annual fund will instead be set up equivalent to the yearly value of this tax.
The fund will be donated to women’s charities over this parliament, or until the UK can remove the tax from sanitary products.
15. The current Energy Companies Obligation runs until March 2017. This will be replaced from April 2017 with a new cheaper energy supplier obligation to reduce carbon emissions which will run for five years. The changes will mean that on average 24 million households will save £30 a year on their energy bills from 2017.
The Warm Home Discount scheme will also be extended to 2020-2021. This currently gives certain low-income households a one-off reduction of £140 on their electricity bill. People can apply for the scheme online through their supplier.
16. At Summer Budget it was announced that three million new apprenticeships will be created by 2020, funded by a levy on large employers.
The apprenticeship levy will come into effect in April 2017, at a rate of 0.5% of an employer’s pay bill. A £15,000 allowance for employers will mean that the levy will only be paid on employers’ pay bills over £3 million.
Less than 2% of UK employers will pay the levy.
17. 300,000 homes will be better protected from flooding by 2021, with £2.3 billion for over 1,500 flood defence schemes across the country.
This includes improvements to sea defences at Rossall in Lancashire which will reduce the risk of flooding for 7,500 homes, and money to protect 3,000 residential properties and 500 businesses in Leeds city centre.
18. A £400 million Northern Powerhouse investment fund will be created to help small businesses to grow. £5 million will also go to Manchester museum to create a new South Asia gallery in partnership with the British Museum, and £150 million to help make oyster style ticketing a reality across the whole of the North.
The government will also support the Rugby League World Cup bid for the UK in 2021 so matches can be held across the North. £1 million will go towards the Hull City of Culture programme for 2017.
19. Funding for museums and galleries will be maintained so they remain free to the public. To build on the success of the London Olympics and Paralympics in 2012, funding to the UK’s top athletes will be increased by 29% to support Team GB at Rio 2016 and Tokyo 2020.
20. To make it harder for people to claim compensation for exaggerated or fraudulent whiplash claims, the government is ending the right to cash compensation.
More injuries will also be able to go to the small claims court as the upper limit for these claims will be increased from £1,000 to £5,000.
This means that annual insurance costs for drivers could fall by between £40 to £50 a year.
Posted on Nov 24, 2015.