With the latest report from the Office for Budget Responsibility painting a gloomy outlook for the UK economy, Chancellor George Osborne has vowed that the Government will do whatever it takes to protect against 'the sovereign debt storm'.
In line with recent predictions, the Chancellor announced a reduction in the economic growth forecasts for the UK, revising the forecast for 2011 down from 1.7% to 0.9%. This was accompanied by an increase in Government borrowing, with the forecast for 2011/12 rising to £127bn. However, the Chancellor rebuffed recent reports that the UK is set to slip back into recession in the coming months.
Key announcements for business include the introduction of further credit easing, with up to £20bn being made available to small and medium-sized businesses through the National Loan Guarantee Scheme. The business rate relief 'holiday' for small firms will be extended to April 2013, and a new Seed Enterprise Investment Scheme for small businesses will offer 50% income tax relief for those investing up to £100,000 in start-up businesses, together with a one year freeze on capital gains tax. A £940m 'Youth Contract' will also aim to boost employment by means of subsidised work placements for young workers.
Also central to the announcements was confirmation of a National Infrastructure Plan to boost the UK's road, rail and broadband facilities, to be funded by £5bn of Government spending, with a further £20bn investment expected from British pension funds.
Other significant announcements include a mortgage indemnity scheme aimed at helping 100,000 people to buy homes, a doubling of the number of childcare places for disadvantaged two year olds in England, a new cap on regulated rail fare increases, a cancellation of the rise in fuel duty scheduled for January, and a further increase in the bank levy.
For a detailed overview of the Autumn Statement, visit our summary here.
'After 18 months in office the verdict is in: Plan A has failed and it has failed colossally… cutting too far and too fast has backfired and every one of the Chancellor's claims of a year ago has completely unravelled'
Ed Balls, Shadow Chancellor
'This Autumn Statement works with the realities of today and provides an imaginative framework for UK businesses as it strives to secure growth and jobs. This is "Plan A Plus" in all but name'
John Cridland, Confederation of British Industry
'The biggest challenges to UK businesses remain global demand and economic uncertainty. Firms will give the Chancellor credit for pulling the levers under his control, but will remain concerned about the wider economic environment'
David Kern, British Chambers of Commerce
'Taken as a package, the announcements in the Autumn Statement address many of the concerns raised by small businesses… the key now is for the Government to be consistent, and set to the task of translating the policy intentions into tangible actions on the ground'
John Walker, Federation of Small Businesses
On 6 December the Government will publish draft clauses planned for inclusion in Finance Bill 2012.
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