In the Budget the Chancellor revolutionised the pensions market by giving millions of pensioners who had carefully saved for their retirement the freedom to decide for themselves how to spend their pension savings. Now in the Autumn Statement the Chancellor has improved Stamp Duty by taking action that quite frankly should have been taken years ago, Until the Autumn Statement the system meant that the whole purchase price was taxed at a given rate if it exceeded a certain figure by even £1. This system distorted the market meaning people whose property was valued at around a changing point for Stamp Duty would do all they could do stop their property being charged the higher rate of duty. Now Stamp Duty operates like Income Tax with a nil rate band and each higher band being taxed at a set rate. This means that in the North West just 3 people in a thousand will pay more tax and 997 out of a thousand will pay the same or less tax.
This week’s Autumn Statement has confirmed that our economy is growing. In fact the independent Office for Budget Responsibility has upgraded its forecast for growth in the current year from 2.7% to 3%.The UK now has the fastest growing economy of any of the major advanced economies in the World. Unemployment is falling and inflation is low and expected to remain low.
Of course crystal ball gazing when it comes to the economy is always a tricky task. There are so many variables. The deficit is still too large that is to say the Government is still spending more each year than it collects . Each year the shortfall gets added to the nations debts. In essence we are spending money today that we are expecting our children and grandchildren to repay. that is why it is essential we finish the task we have begun.
The Autumn Statement covered many areas of great importance not least was the revolution in stamp duty the tax we pay when we buy a house. from midnight last night 98% of all homebuyers will pay less tax and in Bury it will be virtually every home buyer.
The simple message from the Chancellor’s Autumn Statement yesterday was that although the road to recovery is a long and difficult one we are making progress. I think the central choice facing the electorate at the next General election is already becoming clear. Continue along the road to recovery (despite it being long and difficult) or to turn back. A return to spending more and borrowing more would be a disaster. I think that once people consider this central question most will decide that it does not make sense to hand the reigns of power back to the Party which put us in this mess in the first place.
The Government has reduced the size of the budget deficit by a quarter in two years and the forecast is that the budget deficit will go on being reduced. Of course UK PLC will only be able to start paying off our debt once the deficit is cleared completely.
By making more savings from bureaucracy and from the benefits bill and by making the better of pay more the Chancellor has been able to do more to help hard working families and businesses.
Central to helping families with the cost of living the Chancellor has cancelled the 3p per litre increase in the price of fuel planned for next month. Next April the amount people can earn before paying tax will increase by £1,335, the largest ever cash rise. 24 million people in the Country will get a tax cut. The Government will have taken 2.2 million of the lowest paid workers out of tax altogether.
Billions of pounds more are to be spent on capital investment in science, education and new roads and to help British businesses compete a further 1p cut in the the Corporation Tax means that under this Government the headline rate of Corporation Tax will have fallen from 28% to 21%.
I know from my meetings with businesses in Bury that they will be particularly pleased with the ten fold increase in teh capital allowance available for small companies from £25,000 to £250,000. This will boost growth and be a real help to small companies wanting to invest in new plant and machinery.
Of course Labour will claim it could all be so much easier and the difficult decisions could all be avoided, well the electorate will be able to decide in 2015. Simple choice: continue on the road to recovery or turn back to the road to ruin