Autumn statement: Key points of spending review

The Chancellor George Osborne took to the dispatch box today to deliver his Autumn Statement and Spending Review.

He set out his latest round of cuts aimed at eliminating Britain’s budget deficit.

Key points from the chancellor’s autumn statement.

• Debt forecast to be 82.5% of national income this year – down from 83.6% at time of July Budget.

George Osborne on tax credits read the full article here.
“I’ve had representations that these changes to tax credits should be phased in. I’ve listened to the concerns. I hear and understand them. And because I’ve been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether. Tax credits are being phased out anyway as we introduce universal credit. What that means is that the tax credit taper rate and thresholds remain unchanged.”

• OBR has certified that the Government’s economic plan delivers on the commitment to reach surplus by 2019/20 and reduce debt to GDP ratio every year of this Parliament
• OBR forecasts that the economy grows “robustly every year”, living standards rise every year and more than one million extra jobs will be created over five years, says the Chancellor.
• At this point in proceedings a farcical chuckle went up as the speaker rose to silence MP Clive Lewis. (See why here)
• Tax credit taper rate and thresholds to remain unchanged, with a disregard of £2,500, avoiding changes all together.
• Minimum income floor for Universal Credit to rise in line with the National Living Wage.
• The Government will breach its welfare cap in the first years of this Parliament, but meet it in the later part
• Housing benefit for new social tenants to be capped at same level as private sector and housing benefit and pension credit payments to be stopped for people who leave the country for more than one month.
• Deficit to be 3.9% of national income this year, then 2.5% in 2016/17 and 1.2% and 0.2% in subsequent years, before moving to surplus of 0.5% in 2019/20 and 0.6% the following year.
• Borrowing forecast for this year cut from £74.1 billion to £73.5 billion, falling to £49.9 billion, £24.8 billion and £4.6 billion in subsequent years, reaching a surplus of £10.1 billion in 2019/20 and £14.7 billion in 2020/21
• HM Revenue and Customs to make savings 18% in its own budget and invest an extra £800 million in the fight against tax evasion.
• Every individual and small business to have their own digital tax account by the end of the decade.
• Cabinet Office budget cut by 26%, Treasury budget by 24% and the cost of all Whitehall administration cut by £1.9 billion.
• Abolition of cap on student nurse numbers, to create up to 10,000 new training places.
• Chancellor says if Scotland had voted for independence then there would have been catastrophic cuts in a Scottish Autumn Statement owing to the oil price slump.
• Commitment to £10 billion real terms increase in the health service budget delivered in full, with the first £6 billion delivered up front next year. NHS budget to rise from £101 billion today to £120 billion by 2020/21.
• NHS funding to deliver £5 billion for health research, 800,000 more elective hospital admissions, 5 million more out patient appointments, 2 million more diagnostic tests, new hospitals in Cambridge, Sandwell and Brighton, and cancer testing within four weeks.
• Additional £600 million for mental health.
• Local authorities with responsibility for social care to be allowed to levy a new precept of up to 2% on council tax, bringing almost £2 billion more into the care system.
• Additional £1.5 billion for local authorities by 2019/20 through the Better Care Fund.
• Basic state pension to rise by £3.35 next year to £119.30 a week.
• Savings credit to be frozen at current level.
• Chancellor sets aside £12 billion for Local Growth Fund and announces 26 new or extended Enterprise Zones, including Carlisle, Dorset and Ipswich.
• Uniform business rate to be abolished and local government to keep revenue from business rates by the end of the Parliament.
• Councils to receive an additional £10 million to help homeless people.
• Councils to be allowed to spend 100% of receipts from sold assets to improve local services and encouraged to draw on reserves.
• By the end of this Parliament, local government to be spending the same in cash terms as it does now.
• Northern Ireland block grant to be more than £11 billion by 2019/20 and funding for capital investment in infrastructure to rise by more than £600 million over five years.
• New funding floor for Wales set at 115%, and legislation to allow the devolution of income tax to Wales without a referendum. Welsh block grant to reach almost £15 billion by 2019/20 and capital spending to rise by more than £900 million.
• Scottish block grant more than £30 billion by 2019/20 and capital spending to rise by £1.9 billion in the years to 2021.
• Department for Transport operational budget cut by 37%, but transport capital spending to increase by 50% to £61 billion.
• Transport spending to include electrification of TransPennine, Midland Mainline and Great Western, £11 billion for London infrastructure, and £250 million to relieve pressure from Operation Stack on Kent roads, as well as £300 million for cycling and £5 billion on road maintenance.
• Environment department day to day budget cut by 15%, but £2 billion committed to protect 300,000 homes from flooding.
• Spending on energy research to be doubled, and a new Shale Wealth Fund of up to £1 billion for communities affected by fracking industry. Support for low carbon electricity and renewables to more than double.
• Support for climate finance to increase by 50% over the next five years, but Department for Energy and Climate Change budget to be cut by 22%.
• Renewable Heat Incentive to be reduced by £700 million and energy intensive industries to be permanently exempted from environmental tariffs.
• New domestic energy scheme to replace ECO will save 24 million households an average of £30 a year.
• Reforms to compensation culture to cut more than £1 billion from cost of motor insurance, which could save motorists £40 to £50 a year.
• Extension of small business rate relief scheme for another year and support for aerospace and automotive industries confirmed for the next decade at current level.
• Business department budget cut by 17%, but science budget protected in real terms, rising to £4.7 billion.
• Nobel laureate Paul Nurse to conduct review of science research councils.
• Culture department core budget cut by 20% but cash increase for Arts Council, national museums and galleries. Free museum entry retained.
• UK Sport receives 29% increase in budget.
• New support worth £20 million for social impact bonds.
• The £15 million raised each year from VAT on tampons to be used to fund women’s health and support charities.
• Government to fund renovation of military museums and support Winston Churchill Memorial Trust fellowships and contribute to memorial for Tavistock Square bus bomb victims.
• Free 30 hours of childcare for three and four year olds to be available from 2017 only to parents working more than 16 hours and with incomes of less than £100,000.
• Nursery sector funding to increase by £300 million.
• Investment of £23 billion in school buildings and 600,000 new school places, with 500 new free schools and University Technical Colleges.
• National Citizens Service to be expanded to 300,000 places.
• Sixth form colleges to be allowed to become academies. (meaning they won’t have to pay VAT)
• Total financial support for education and childcare to increase by £10 billion, and new national funding formula to be introduced for schools from 2017.
• Part-time students to receive maintenance loans and tuition fee loans to be made available in further education, benefiting a total of 250,000 students.
• Apprenticeship levy set at 0.5% of employer’s pay bill from April 2017, with £15,000 allowance for each employer.
• Housing budget to double.
• Conditions for benefits to be extended to more than one million more claimants, with those signing on required to attend jobcentre every week for the first three months.
• Department for Work and Pensions resource budget cut by 14%.
• Underused courts to be closed, freeing up £700 million for new technology to speed up justice. Old prisons – including Holloway – to be sold, allowing £1 billion spending on nine new prisons.
• Tenants of five housing associations to be able to buy their own home from midnight tonight. (see more on the chancellor’s housing plans)
• Restrictions on shared ownership to be removed and planning system reformed to deliver more homes. London Help to Buy scheme to offer interest-free loan worth up to 40% of the value of a newly built home.
• New 3% surcharge on stamp duty for buy-to-let properties and second homes from April 2016, raising almost £1 billion.
• Spending on Single Intelligence Account to rise from £2.1 billion to £2.8 billion by 2020/21 and defence budget from £34 billion to £40 billion.
• Overseas aid budget to increase £16.3 billion by 2020.
• Foreign Office budget protected in real terms.
• There will be no cuts in the police budget at all, with funding protected in real terms.

The Chancellor concluded his statement at 1.38pm.