Autumn statement reaction

Chancellor George Osborne responded to that forecast in a statement to the House of Commons later on that day (Tuesday November 29).

Here Spofforths, the local firm of chartered accountants and tax advisers, provides an overview of his statement.

In the period since the Budget in March a number of consultation papers and discussion documents have been published by HMRC. Draft legislation relating to many of these areas will be published on 6 December 2011. Some of these proposals are summarised here, along with a reminder of other key developments which are to take place from April 2012.

The Chancellor’s statement

The Chancellor emphasised that the OBR does not predict a recession in Britain but they have revised down their short term growth prospects for the country. He also made clear that the OBR central forecast assumes ‘the euro finds a way through the current crisis’.

General measures

The Autumn Statement sets out the actions the Government will take in two main areas:

• protecting the economy and

• building a stronger economy for the future.

In order to maintain economic stability and meet its fiscal rules, the Government will, for example:

• set plans for public spending in 2015/16 and 2016/17 in line with the spending reductions over the Spending Review 2010 period

• raise the State Pension age to 67 between April 2026 and April 2028

• set public sector pay awards at an average of 1% for each of the two years after the current pay freeze comes to an end.

The growth plans include the publication of a National Infrastructure Plan 2011. The plan sets out a pipeline of over 500 infrastructure projects including:

• introducing a new approach to financing infrastructure, by obtaining £20 billion of private investment from pension funds

• investing over £1 billion to tackle areas of congestion and improve the national road network

• investing more than £1.4 billion in railway infrastructure and commuter links

• investing £100 million to create up to ten ‘super-connected cities’ across the UK, with 80-100 megabits per second broadband and city-wide high-speed mobile coverage.