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Growth forecasts

  • OBR growth forecast for this year now 2.1 per cent – one point up since March’s budget.
  • OBR forecast for next year down from 2.2 per cent to 1.4 per cent (- .8 per cent).
  • OBR forecasts for 2018 1.7 per cent ( – .4 per cent), for 2019, 2.1 per cent per cent (no change), for  2020 2.1 per cent (no change).

Borrowing forecasts

  • 2016/17 – £68 billion (up by £13 billion since March forecast).
  • 2017/18 – £59 billion (up by £20 billion since March forecast).
  • 2018/19 – £46 billion (up by £24 billion since March forecast).
  • 2019/20 – £21 billion (up by £31 billion since March forecast).
  • 2020/2021 – £21 billion (up by £30 billion since March forecast).
  • Plan for surplus by 2020/2021 scrapped.

Public sector debt forecast

  • 2015/2016 – 84.2 per cent.
  • 2016/2017 – 87.3 per cent.
  • 2017/2018 – 90.2 per cent (Peak rate: forecast in March to be down to 81.3 per cent by that financial year).
  • 2018/2019 – 89.7 per cent.

New fiscal framework

  • Balance the books “as early as possible” in the next Parliament.
  • Cut the deficit to less than 2 per cent by 2020.
  • Net debt as a share of GDP should be falling by the end of the Parliament (and welfare spending must be within a “realistic” cap).

Departmental spending

  • Spending plans for each year as in March budget…
  • …Until 2021-2022, when it will grow in line with inflation.
  • The £3.5 billion of savings announced in March “must be delivered in full.”
  • 0.7 per cent aid target stays.

Public Spending

  • £23 billion for new National Productivity Investment Fund.
  • £1.8 billion from the Local Growth Fund to the English regions.
  • £2 billion extra per year by 2020-21 for research and development.
  • £1 billion to soften George Osborne’s reductions in the value of Universal Credit (taper rate lowered from 65p to 63p).
  • £1.4 billion for 40,000 new homes and more flexible use of existing funding for affordable housing.
  • £2.3 billion for new Housing Infrastructure Fund.
  • £1 billion for broadband and the mobile network.
  • £1.3 billion for roads and other transport projects.
  • £1 billion of new finance “unlocked” for growing firms.
  • £102 million of LIBOR bank fines to Armed Forces and Emergency Services charities.
  • £400 millon for venture capital funds through the British Business Bank.

Tax rises

  • Curbs on salary sacrifice schemes “except employer pension contributions, employer-provided pension advice, employer-supported childcare, provision of workplace nurseries and bicycles and helmets under the Cycle to Work scheme”.
  • Insurance Premium Tax will rise from 10 per cent to 12 per cent.

Private tax avoidance

  • £2 billion to be raised from shutting down the “inappropriate use” of the VAT flat rate scheme for small businesses; tax advantages linked to Employee Shareholder Status are to be abolished; new penalties for those who use tax avoidance schemes that HMRC later challenges and defeats.

Corporate tax avoidance

  • £5 billion to be raised  from new restrictions on tax relief for corporate interest expenses.

Tax cuts

  • Fuel duty frozen for seventh successive year.
  • Transitional relief cap down from 45 per cent in 2017 to 43 per cent, and from 50 per cent to 32 per cent in 2018.
  • Rural Rate Relief rises to 100 per cent.

Tax cut pledges repeated

  • Personal allowance to be raised to £12,500, and the higher rate threshold to £50,000, by the end of this Parliament.
  • Corporation tax will fall to 17 per cent as planned. No repetition of George Osborne’s call for it to fall further to 15 per cent.
  • Carbon Price Support to continue to be capped to 2020.
  • Business rates reduction package of  £6.7 billion to be implemented.

Savings incentive

  • New “market-leading investment bond” with a 2.2 per cent interest rate on a three-year term for deposits up to £3,000.

Business

  • National Living Wage to rise by 30p an hour to £7.50 from next April.
  • Ban on letting fees.

And finally –

  • Autumn Statement abolished. This is the last. The Budget will take place in the autumn. A spring statement will respond to the OBR’s regular reports.

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