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2015 Autumn Statement: Osborne pledges to ‘rebuild Britain’

Chancellor George Osborne pledged to ‘rebuild Britain’ as he presented his combined Autumn Statement and Spending Review to the House of Commons.

Placing the theme of security – both economic and national – at the heart of his speech, the Chancellor set out his aim of making Britain ‘the most prosperous and secure of all the major nations of the world’, drawing on the latest economic forecasts to suggest that the Government’s four-year spending plans remain on target to deliver a budget surplus. The Office for Budget Responsibility has forecast a £27bn improvement in the public finances since the July Budget, with economic growth predictions set at 2.4% for 2015 and borrowing expected to fall to £73.5bn.

Ever keen to strike a positive economic note, the Chancellor asserted that Britain was moving ‘out of the red and into the black’. However, in delivering his speech the Chancellor faced a number of challenges. Having confirmed that the planned £12bn of welfare cuts would be delivered in full, together with the announcement of deep cuts to many Whitehall budgets, the Chancellor found himself somewhat snookered in respect of his controversial planned cuts to Tax Credits.

While many experts were predicting some transitional measures to soften the impact of the cuts, the Chancellor unexpectedly doubled back and announced a U-turn on the £4.4bn plans. The measure will be offset in part by higher than expected tax receipts and new restrictions on housing benefit and pension credit payments. The Chancellor also sought to rebuff recent concerns that the budget for policing would be cut.

Other personal tax measures included confirmation that the new single tier state pension will be set at £155.65 a week from next April. In addition, the Chancellor announced that local councils will be able to increase council tax by up to 2% in order to fund social care.

The statement included a number of headline measures for business, including the news that small businesses will enjoy an extension of Small Business Rate Relief for a further year. The Chancellor confirmed plans to abolish uniform business rates, granting new rate-setting powers to local councils, with further details to be reported in the Spring Budget. In addition, it was revealed that the new business apprenticeship levy will be set at a rate of 0.5% of an employer’s wage bill.

Other key announcements included a commitment to investing in transport and infrastructure, together with new plans to increase Britain’s housing stock. Declaring that ‘we are the builders’, the Chancellor pledged to double the housing budget to £2bn a year, leading to the building of 400,000 new affordable homes by the end of the decade. For buy-to-let owners, though, the news was perhaps less welcome, with the announcement of a new 3% stamp duty surcharge for buy-to-let properties and second homes, to take effect from next April.