Autumn Statement & Spending Review – Initial Reaction

George Osborne has just delivered his 2015 spending review and Autumn Statement. His speech, which lasted 1 hour and 4 minutes but felt considerably longer, was as expected full of statistics regarding the improvements to the economy.

There were some bold headlines such as:

  • 1m extra jobs in the next five years
  • £27bn improvement in public finances due to higher tax receipts and lower debt repayments
  • £22bn efficiency savings to be found in the NHS
  • No cut in the police budget

The government is still predicting a surplus from 2019/20 and the GDP growth forecast is around the 2.3% to 2.5% mark for the next five years. Once again, the reference to “northern powerhouse” was made very early in his speech as it was announced that the economic recovery has been better in the north than the south - a comment slightly tarnished by an immediate reference to Birmingham which is not very northern from my perspective!

The actual detailed tax announcements were few and far between.

As always, there were the usual references to anti-avoidance measures including a penalty regime which will be another nail in the coffin for some of the more provocative tax schemes still being touted.

There was no acceleration of the new dividend tax or an abolition of the 10% rate of CGT as predicted by some.

The changes to tax credits that were recently blocked by the House of Lords have been shelved. This previous announcement had received a lot of criticism and it was interesting to see the Chancellor make a full u-turn.

One interesting tax announcement was a 3% increase in Stamp Duty land Tax for additional properties, such as buy-to-lets.

Of course, it was fantastic news to hear that Carlisle’s Kingmoor Park has been granted Enterprise Zone status; hopefully this will bring many new businesses and jobs to the city.

My final comment has to be on the speaker, John Bercow. It was a lively speech and his recommendation to one Labour MP to take up yoga to help him relax has to be the tip of the day. Now, where’s my floor mat?

Nigel Holmes, Tax Partner  

 

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