Chancellor George Osborne delivered his 2014 Autumn Statement at 12.30pm on 3 December 2014. Here's our summary of the key announcements.
Growth in 2014 has been revised upwards to 3%; then 2.4% next year, followed by 2.2% in 2016, 2.4% in 2017 and 2.3% in 2018 and 2019, according to the Office for Budget Responsibility (OBR). In the 2013 Autumn statement, those were 2.4% for 2014 and 2.2% for 2015. However, the 2016 figure was forecast to be 2.6% and 2.7% in 2017 so these have been revised downwards.
Unemployment was revised down in all years to 2018 and is expected to be 6.2% in 2014, 5.4% in 2015, 5.2% in 2016, falling to 5.3% in 2017 and 2018. The Chancellor added that 85% of the jobs that have been created in this parliament are full-time. Most have been created in Scotland and the North, and the gender pay gap has fallen to its lowest level in history.
The OBR forecasts inflation to be 1.5% this year, 1.2% in 2015 and 1.7% in 2016 before returning to the Bank of England's 2% target in 2017.
Government borrowing is forecast to be £91.3bn in 2014 (higher than previously forecasted back in the March Budget at £87 billion), then £75.9 billion in 2015. Osborne added that there could be a small surplus in 2017/18 of £23 billion by the 2019/20, at point at which the UK would be "out of the red and into the black for the first time in a generation".
The Chancellor has abolished the "residential slab system" for paying stamp duty on property that saw homebuyers charged at 1% for properties worth between £125,001 and £250,000, and then 3% on properties worth £250,001 to £500,000. That meant a stamp duty bill of £2,500 on a £250k home but £7,500 for one worth £250,001. However, from midnight on Wednesday 3 December, a 2% charge will be levied on the portion of a property value on anything exceeding £125,000 up to £250,000.
A 5% charge will then apply to the portion of value that exceeds £250,000 up to £925,000. Between £925,001 and £1.5 million, a 10% charge will apply. And for everything above £1.5 million, a 12% charge will be enforced.
The Chancellor said 98% of homes paying stamp duty will be better off under the new system, which will result in a tax cut of £4,500 when buying average family home costing £275,000.
The changes will also apply to Scotland from midnight until the introduction of its own system in April.
The rate at which higher-rate tax (the 40p rate) becomes payable will rise from £41,865 to £42,385 in April 2015.
From April 2015, new married tax allowance will allow married couples to transfer £1,000 of their unused allowance to their spouse as long as they are basic-rate taxpayers.
The amount that can be saved in cash Isas or invested in stocks and shares Isas will rise to £15,240 in April 2015, up from £15,000 in the current tax year.
A new student loan system will enable graduates wishing to study for a post-graduate masters degree to borrow up to £10,000. It is expected that the loans will be made available from 2016/17 and that some 40,000 students could benefit. The loans will be repaid alongside undergraduate loans and students will need to be 30 or younger to apply.
Air passenger duty
From May 2015 parents will no longer have to pay air passenger duty for children younger than 12 when they are flying in economy class. From 2016 it will be scrapped for all children younger than 16. According to the Treasury this will save a family four £26 on a flight to Europe and £142 on a flight to the US.
Fuel duty will remain frozen at its current rate until May 2015 – the end of the current parliamentary term. It currently stands at a rate of 57.95p per litre for petrol and diesel.