Chancellor delivers good news for savers and first-time buyers as he turns up heat on banks in play for votes ahead of election.
UK ECONOMIC OUTLOOK
● The UK was the fastest growing economy in the G7 last year. However, the economy grew by just 0.5 per cent in the final three months of 2014, slightly weaker than the Office for Budget Responsibility (OBR) expected in December.
● Growth is expected to be 2.5 per cent this year, up from 2.4 per cent in the December forecast. 2016 growth predictions have also been upgraded from 2.1 per cent to 2.3 per cent.
● Unemployment has fallen rapidly and the OBR expects the decline to continue, but at a slower rate. It has significantly improved its outlook for unemployment.
● The OBR revised down its forecast for the unemployment rate in 2015 to 5.3 per cent from 5.4 per cent. It now forecasts unemployment of 5.2 per cent in 2016.
● Latest Office for National Statistics (ONS) data shows 1.86m people out of work and 30.94m in work, up 617,000 compared to last year.
● Chancellor claimed that 1.9m new jobs have been created under the coalition, 1000 jobs a day since 2010
BANKS£1bnBanks face paying up to £1bn more in PPI compensation
● Debt as a proportion of national income will start falling, Osborne said. OBR figures forecast that debt as a share of GDP will fall from 80.4 per cent in 2014-15 to 80.2 per cent in 2015-16.
● The deficit has fallen from £153bn in 2009-10, when Osborne took office to £97.5bn in 2013-14, according to the OBR.
● The OBR forecasts that by 2014-15, the deficit would have reduced by 41 per cent in cash terms and by 51 per cent as a proportion of Gross Domestic Produce (GDP).
● The deficit is projected to continue falling and turn into a small surplus by 2018-19.
● The projected surplus for 2018-19 is £5.2bn, rising to £7bn in 2019-20.
● The personal tax-free allowance, the amount you can earn before having to pay tax, will rise to £10,800 next year, and then rise again to £11,000 in 2017.
● The higher tax rate threshold will rise from £42,385 this year to £43,300 by 2017-18.
● New personal savings allowance to be introduced. First £1,000 of interest earned on savings will be completely tax-free. Allowance for higher rate taxpayers to be set at £500.
● The rate of the new transferable tax allowance for married couples rises from £1,060 to £1,100
● ISAs are to be made more flexible, giving savers complete freedom to take money out, and put it back in later in the year, without losing any of their tax-free entitlement
● Implementation of the “Google Tax” on multinationals is set to come into force with a raft of anti tax-avoidance measures aimed at raising £3.1bn for the treasury.
● A new “last chance” disclosure mechanism will be introduced next year, meaning tougher sanctions on those evading tax with penalties of at least 30 per cent on top of tax owed and interest.
● The chancellor confirmed “wide-ranging” review of the business rates system.
● The government is to launch a consultation on implementing business rate relief for local newspapers, which have faced a tough time economically.
ALCOHOL1POsborne said that 1p would come off the cost of a pint
● Government to provide finance for Twenty new Housing Zones outside London, including in Stoke, Derby and Manchester, with the potential to deliver 34,000 homes. Finance will be provided to enable the regeneration of brownfield sites into new homes.
PENSIONS AND SAVINGS
● A new Help to Buy ISA scheme for people saving for a first home to be introduced. For every £200 saved the government will contribute £50, with an upper limit of £3,000 on savings of £12,000.
● Confirmation that five million pensioners will be allowed to sell their annuities. From April 2016, people who are already receiving income from an annuity can sell that income to a third party.
● The lifetime allowance for pensions tax relief is to be reduced from £1.25m to £1m and from 2018 will rise in line with inflation.
● Abolition of Class 2 national insurance contributions for the self employed in the next parliament, saving workers £143 a year.
● Promise to reform Class 4 national insurance contributions, paid at a rate of nine per cent on profits over £7,956, and roll out a new contributory benefit test.
● Introduction of digital tax returns for five million small businesses and 10m individuals in the next parliament, removing need for annual tax returns
● Fuel duty has been frozen once again, and the duty hike slated for this autumn will no longer go ahead. Marks longest freeze in two decades and saves consumers £10 per person at pumps each trip.
● Treasury estimates the cost to the exchequer from scrapping the planned increase will be £140m in 2014-16, rising to £240m in 2016-17.
● A £25m compensation scheme to help energy-intensive firms cope with cost of green subsidies will be brought forward from April 2016 to October.
● Government entering formal negotiations over the £1bn Swansea Bay tidal lagoon scheme to determine whether the project is affordable and value for money for tax-payers.
PETROL£10Fuel duty frozen again, saving consumers £10 per fill-up
BANKING AND FINANCE
● The bank levy is increasing from 0.156 per cent to 0.21 per cent of banks’ global assets, which will rake in an extra £4.4bn by 2020.
● Banks face paying almost £1bn more for PPI mis-selling as they can no longer count costs against profits in their corporation tax payments. The tax change should raise £965m.
● Another £9bn of shares in bailed-out bank Lloyds will be sold off over the next year, potentially cutting the government’s stake in the lender to below 10 per cent.
● Northern Rock and Bradford and Bingley loan portfolios worth £13bn have been put up for sale.
● Prospect of an RBS sale was raised by the chancellor, potentially selling the stock at a loss. Government concerned that state-ownership of the bank is bad for RBS and for competition.
ALCOHOL AND GAMBLING
● A cut to UK alcohol duties across a range of products, with 1p coming off the cost of a pint and a 2 per cut to duty on Scotch whisky. Cider also saw a two per cent cut to duty.
● The cost to the treasury from the scheme is estimated to be £1.5bn over the next five years.
● Bank customers will be able to plug their current account data into a price comparison website from next week, letting them see which accounts match their needs most. The move is part of changes aimed at boosting competition.
● The Post Office is close to a deal with the banking sector on basic standards for the use of Post Office banking facilities, helping new banks gain a national reach through its high street sites.
● The government is in talks with LINK to see if a new generation of cashpoints can be rolled out nationwide to allow customers to pay in cash as well as make withdrawals.
NORTH SEA OIL
● Petroleum revenue tax, the tax on profits from oil and gas production, will be cut from 50 per cent to 35 per cent, amounting to £1.3bn in support.
● New investment allowance to stimulate investment and simplify existing system. Aims to provide investors with greater certainty.
● The government will provide £20m of funding for seismic surveys to boost offshore exploration in the UK Continental Shelf.
TELECOMS, MEDIA AND TECHNOLOGY
● Up to £600m pledged to clear new spectrum bands in anticipation of further auctions. Aim is to improve nationwide mobile phone coverage, particularly in remote communities.
● Funding promised for wifi in public libraries and new national plan for ultra-fast broadband to nearly all homes in the country.
● The government announced £10m funding for research into the “opportunities and challenges” of digital currencies such as bitcoin. Digital currencies will soon have anti-money laundering regulations applied to them.
CULTURE AND CHARITY
● Creative industries set for a boost with film, television, video games and even orchestras set to benefit from tax relief or investment.
● International films being shot in the UK will now only be required to spend a minimum of 10 per cent of their budgets, as opposed to 25 per cent previously, to qualify for a 20 per cent tax break.
● The £15m church roof repair fund announced in the Autumn Statement is being trebled to £40m after it was heavily over-subscribed.
● £75m to be allocated to charities for British servicemen and women, funded by Libor fines.
● The London Land Commission (LLC) was granted £1m funding to put together a comprehensive database of public sector and brownfield land.
● An extra £7m will be handed to the Greater London Authority to support development of the Croydon Growth Zone, which could unlock over 4,000 homes and 10,000 jobs in the area.
● Greater Manchester is to keep 100 per cent of the additional growth in local business rates in a step towards further fiscal devolution.
HELP TO BUY£50Government to pay £50 for every £200 saved in new ISA
● Government departments will have to soon pay market-level rents in their own buildings as part of a shake-up of how it manages land and property assets it owns. The chancellor said the government will take a more “commercially-driven approach” to land and property asset management across its entire estate.