Autumn Statement 2015: at a glance
Our favourite quotes
"Opportunity for all."
"Our job is to rebuild Britain, build our finances, build our defences, build our society."
" This is a big spending review by a government that does big things."
"£12 billion of welfare savings committed to at election will be delivered in full."
"I’ve had representations that these changes to tax credits should be phased in. I’ve listened to the concerns. I hear and understand them. And because I’ve been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether."
"The other side talks about social justice, this side delivers it."
"We are the builders".
"The police protect us and we are going to protect the police".
• GDP forecasts of 2.4% this year, then 2.4% in 2016, 2.5% in 2017, then 2.4% in 2018, 2.3% in 2019 and 2020 - "faster in Britain than any other major advanced economy in the world."
• Debt forecast to be 82.5% of GDP this July, falling to 81.7% next year, 79.9% in 2017-18, then 77.3%, 74.3%, and 71.3% in 2020-2021.
• Defecit was 11.1% of national income in 2010. This year to be 3.9%, then 2.5%, 1.2% in 2017-18, 0.2%, +0.5% in 2019-2020, then +0.6% in 2020-2021.
• Cuts to tax credits scrapped.
• Single tier pension rate to be set at £155.65 a week.
• Basic state pension to rise by £3.35 to £119.30 next year - "biggest increase for 50 years".
• Doubling housing budget to £2 billion a year.
• 400,000 affordable new homes by the end of the decade - biggest housbuilding programme since 1970s. Half will be starter homes sold at up to 20% off market values.
• Right To Buy programme to go ahead, with a pilot trial from 00:00 on 26 November.
• London Help To Buy scheme gets the green light. Offering 95% LTV loans on first-time buyer properties.
• 24 million households to benefit from a £30 reduction in energy bills due to new energy efficiency scheme.
• Motorists to benefit from £40-£50 lower insurance bills as government seeks to reform crash compensation.
• Disappointment as Isa and Jisa levels are frozen
• £22 billion of efficiency savings across health departments.
• £6 billion injection to NHS delivered early next year (part of a previously-pledged £10 billion).
• Scrap the cap on nurses.
• £600 million of additional funding for mental health services.
• Extra £1.5 billion by 2019-2020 for Better Care Fund.
• No cuts in the police budget. It will be protected in real terms.
• Councils to be able to levy 2% on council tax bills to pay for social care.
• Councils to be able to spend 100% of proceeds from their own property sales.
• The Department for Transport's operational budget to fall by 37% but capital spending increases by 50% to £61 billion, funding the "largest road investment programme since the 1970s", including: HS2, electrification of railway lines, investment for London's transport infrastructure, permanent pothole fund.
Culture & sport
• Department of Culture, Media and Sport to face a 20% budget cut, but museums and galleries to maintain free entry and a 29% increase in sports funding.
• 30 hours of free childcare for working families of three and four year olds, to only be available to parents working more than 16 hours a week and earning under £100,000.
• Student loan borrowers hit with retrospective change to repayment threshold
• 500 new free schools and technical colleges
• Schools budget protected in real terms, with £10 billion funding for education (and childcare).
• School funding system to be phased out in favour of a new national funding formula from 2017.
• Sixth form colleges to be allowed to become academies so they no longer have to pay VAT.
• Part-time students to be eligible for maintenance grants.
• Holloway Prison to be closed, along with under-used courts.
Invented by a Frenchman in 1954 and ironically introduced in the UK on 1 April 1973, VAT is an indirect tax levied on the value added in the production of goods and services, from primary production to final consumption and is paid by the buyer. Its levying is complex, with a number of exemptions and exclusions. For example, in the UK, VAT is payable on chocolate-covered biscuits, but not on chocolate-covered cakes and the non-VAT status of McVitie’s Jaffa Cakes was challenged in a UK court case to determine whether Jaffa Cake was a cake or a biscuit. The judge ruled that the Jaffa Cake is a cake, McVitie’s won the case and VAT is not paid on Jaffa Cakes in the UK.
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.
The total money value of all the finished goods and services produced in an economy in one year. It includes all consumer and government consumption, government spending and borrowing, investments and exports (minus imports) and is taken as a guide to a nation’s economic health and financial well being. However, some economists feel GDP is inaccurate because it fails to measure the changes in a nation's standard of living, unpaid labour, savings and inflationary price changes (such as housing booms and stockmarket increases).
The catch-all term applied to investors who buy properties with the sole intention of letting them to tenants rather than living in them themselves, with the proceeds from the let usually used for the repayment of the mortgage. Buy-to-let investors have to take out specialised mortgages that carry higher interest rates and require a much bigger deposit than a standard mortgage. Other expenditure can include legal fees, income tax (on the rental profits you make), capital gains tax (if you sell the property) and “void” periods when the property is unlet.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.