Autumn Statement 2015

UK Chancellor George Osborne has delivered the combined comprehensive spending review and Autumn Statement, and the major story is the climbdown on tax credits.

The FT's Janan Ganesh describes the tax credit reversal as sending a message of weakness to those who opposes Tory cuts. "It will encourage every sectional public-sector interest group to try its luck". Meanwhile, Robert Shrimsley points out that Mr Osborne's "full-throated bellow of surrender" was followed by the shadow chancellor quoting Mao. He "must have been wondering what else he could have got away with".

See below for the FT's full coverage.

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Spending | Comment | Video | Tax | Politics | Personal Finance | Business | Run-up |

Key points

  • Tax credits: Controversial changes ditched altogether. Extra borrowing will make up the shortfall in the first few years of the parliament
  • Housing: Stamp duty increased 3% for buy-to-let and second home buyers; 400,000 new affordable homes in England by 2020; new Help to Buy scheme just for London
  • Police: no cuts to budget
  • New tax to pay for social care, to be levied by local authorities as a 2% council tax precept
  • Departmental spending cuts: Transport -37%, Business -17%, Defra -15%, Energy -22%, Culture, Media and Sport -22% (but free museum entry will stay)
  • Budget surplus: target of £10bn by 2020 maintained
  • Local governments will be allowed to keep all cash generated from asset sales
  • Apprenticeship levy set at 0.5% of payroll, with £15,000 allowance to exempt small businesses
  • OBR forecasts: UK growth outlook remains broadly unchanged from July
  • Small business rate relief extended for 12 months to April 2017
  • Science funding protected in real terms for rest of Parliament

©Jonathan McHugh

Osborne swaps axe for tax to seize centre

Hit to tax credits scrapped and spending cuts reined in

British Chancellor of the Exchequer, George Osborne, leaves the treasury to deliver his autumn statement in the House of Commons.
©Charlie Bibby/FT

‘Lucky’ Osborne sidesteps political threat

Chancellor again shows ability to be flexible

How do Osborne’s sums add up?

Higher forecasts and taxes spare many departments

Public sector austerity gathers pace

Civil service to shrink to smallest since second world war

Buy-to-let homes face higher stamp duty

Estate agents say surcharge will lead to higher rents

©Ben Pruchnie/Getty Images

Plan to cut support for opposition groups

Proposals provoke chorus of criticism in Westminster

London, England - May 25, 2011: Two Police Women walking down the street
Two Police Women walking down the street wearing fluorescent jackets

Police relieved as Osborne dispels fear of cuts

Officers ‘grateful’ as amount given stays at current levels

Devolution distances Westminster from cuts

No big shrinkage in state but power shifts to cities

Spending

More cash for Northern Powerhouse

Budget allocated to Transport For The North is extended

WEALTH MAGAZINE West Hall Care home Surrey, part of a trend for care catering to wealthy pensioners. Pictured Residents taking part in Tai Chi. Credit: David Parry/ FT
©David Parry

Fears rise for care homes

Chancellor fails to deliver substantial rise in funding

Big budget cut for transport department

Capital spending up by 50% to a total of £61bn

Arts world spared from cuts

Free entry protected for national museums and galleries

Sports funding escapes cuts

29% increase in spending for gold

Government cuts green schemes

Osborne prioritises affordability over cutting emissions

Comment

A great escape and Mao’s Little Red Book

The Tories are lucky in their enemy as the chancellor got away with his humiliating climbdown

Osborne takes gentler route to same end

Chancellor’s starting points remain unchanged and questionable

Osborne’s signal of weakness

Britons will no longer believe the Tories when they say cuts are inevitable

Bronwyn Curtis

An economist’s view from Bronwyn Curtis

The OBR’s new model of tax revenues has bailed out George Osborne

Paul Johnson

An economist’s view from Paul Johnson

Tight review but cuts to unprotected departments less than thought

Andrew Haldenby

An economist’s view from Andrew Haldenby

Osborne’s enthusiasm for public productivity fight is waning

Business pays price for loyalty to Tories

Tales of apprentices’ floor-sweeping diplomas inspire little confidence, writes Jonathan Guthrie

Artful chancellor eyes long-term target

Osborne used good fortune and dexterity to jettison unpopular cargo while remaining on course

Osborne’s Britain is no country for young men

The overall direction is to skew the state further towards older people, writes Matt Whittaker

Osborne must translate numbers into change

The chancellor made his spending task easier but difficult decisions lie ahead, writes Jill Rutter

Tax

Osborne accused of taxation by stealth

‘Word-smithing’ chancellor brings in list of levies

Tougher penalties revealed for tax evaders

Stiffer punishments for those who fall foul of tighter rules

Advertising hoardings outside real estate housing development in London. Large group of Estate agents boards in United Kingdom.
©iStock

Buy-to-let down damps landlord dreams

From next April, an extra 3% stamp duty will apply to purchases

Business rate relief boost for minnows

About 600,000 companies to benefit from decision

How did Osborne pull off tax U-turn?

Backtrack means welfare spend will be much higher

Osborne’s stealthy moves to raise revenue

Chancellor targets fuel duty and company cars

British Chancellor of the Exchequer, George Osborne, leaves the treasury to deliver his autumn statement in the House of Commons.
©Charlie Bibby/FT

Tax credits U-turn hits welfare cap vow

Self-imposed limit on benefits leaves Osborne in a bind

Rachel Neale - Tax Credit case study ...Picture by Jon Super for The Financial Times newspaper. Pic fao Marcus Cotton for story by Andy Bounds. Picture shows Rachel Neale - Tax Credit case study - Barnsley, England, Monday Nov. 23, 2015. (Photo/Jon Super 07974 356-333)
©Jon Super/FT

Part-time workers’ tax credit relief

One single mother is pleased the government ‘listened’

Politics

Mao, McDonnell and mystified MPs

Appearance of ‘Little Red Book’ leaves Labour MPs dumbstruck

Tory MPs welcome tax credits climbdown

Backbenchers relieved Osborne backs away

School
©iStock

Schools to be freed from local authorities

Education burdget protected and more loans extended to students

British Chancellor of the Exchequer, George Osborne, leaves the treasury to deliver his autumn statement in the House of Commons.
©Charlie Bibby/FT

‘Lucky’ Osborne sidesteps political threat

Chancellor again shows ability to be flexible

UK Ministry of Defence

Whitehall to sell £4.5bn of surplus land

Wider disposal of state assets to raise tens of billions

London, England - May 25, 2011: Two Police Women walking down the street
Two Police Women walking down the street wearing fluorescent jackets

Police relieved as Osborne dispels fear of cuts

Officers ‘grateful’ as amount given stays at current levels

Personal Finance

Autumn Statement: What it means for you

Stamp duty surcharge on buy-to-let homes heads chancellor’s measures

Childcare support to exclude high earners

Parents earning more than £100,000 lose out

Pension contributions delay saves £840m

Six-month wait for increase for 5.4m in workplace schemes

Autumn Statement: What the analysts say

What the measures mean for your finances and shares

Whiplash curb may cut car insurance cost

New focus on potentially fraudulent claims

Business People Handshake Agreement Cityscape Concept
©iStock

Entrepreneurs off the hook on CGT relief

Equity-based crowdfunders miss out on 2016 Isa

Business and industry

Business relief as research spared

CBI expresses concern over size of )apprenticeship levy

Business rate relief boost for minnows

About 600,000 companies to benefit from decision

Developers eye prime Holloway jail site

North London property sale could fetch about £200m

Business attacks cut in innovation support

Innovate UK’s £165m a year of grants to become loans

Workers manufacture bicycles at the Brompton bike factory in West London.
©Charlie Bibby/FT

Employers wary of apprenticeships vow

Bike maker Brompton sanguine over levy

©Mark Pinder/FT

BT rivals cheered by investment fund plan

‘Transformation plan’ will set out digital ambitions

Run-up

Osborne’s slick operation ensures support

UK chancellor has Westminster’s biggest fan club

Spending review is choreographed sham

Ministers and officials say they will get it right this time, as if such a thing is in their control

Senior Tory warns over devolving powers

LGA chief says national politicians must accept less control

NHS secures extra £3.8bn for patient care

Sum found, in part, by raiding wider health department budget

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The FT’s one-stop overview of key British economic data, including GDP, inflation, unemployment, business surveys, the public finances and house prices

  • Real-terms spending. The impact of inflation means the value of money changes over time. For example, in 1980 £100 would have bought more goods and services than it would today. Reporting values in ”real-terms“ means the numbers have been adjusted to take account of inflation so they can be fairly compared over time.
  • The deficit. The gap between the government’s revenue and expenditure that needs to be bridged by borrowing has narrowed from £153bn, or around 10 per cent of GDP, in 2009/10 to £70bn, or around 3.5 per cent of GDP this year. The recently-adopted fiscal mandate obliges the chancellor to achieve a budget surplus (where the government raises more money than it spends each year) by 2019/20.
  • Debt. Debt is the cumulative total that the UK government owes from all the years when it ran a deficit. It is slated to begin falling as a percentage of GDP this year.

The FT’s one-stop overview of key British economic data, including GDP, inflation, unemployment, business surveys, the public finances and house prices

  • Real-terms spending. The impact of inflation means the value of money changes over time. For example, in 1980 £100 would have bought more goods and services than it would today. Reporting values in ”real-terms“ means the numbers have been adjusted to take account of inflation so they can be fairly compared over time.
  • The deficit. The gap between the government’s revenue and expenditure that needs to be bridged by borrowing has narrowed from £153bn, or around 10 per cent of GDP, in 2009/10 to £70bn, or around 3.5 per cent of GDP this year. The recently-adopted fiscal mandate obliges the chancellor to achieve a budget surplus (where the government raises more money than it spends each year) by 2019/20.
  • Debt. Debt is the cumulative total that the UK government owes from all the years when it ran a deficit. It is slated to begin falling as a percentage of GDP this year.

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