One of George Osborne’s early decisions as Chancellor was that there would be no more Pre-Budget Reports. Instead the tradition of the Autumn Statement was to be reintroduced, allowing the Chancellor to give an interim view of the UK’s finances.
However, the Chancellor’s 2011 Autumn Statement looked very much like a Pre-Budget Report of old. Mr Osborne made a wide range of announcements (and re-announcements) on everything from nursery care for disadvantaged two-year-olds to 100% capital allowances for the Black Country enterprise zone. More details are likely to emerge when the draft Finance Bill 2012 legislation is published on 6 December.
The raft of measures were nearly all aimed at stimulating growth and limited the time that the Chancellor could spend on addressing budgetary matters. This may have suited Mr Osborne, as the news was not good. Updated projections from the Office for Budget Responsibility show that the Treasury budgetary target will not be met until 2016/17, two years later than predicted at the time of the March 2011 Budget.
The key announcements include:
- State pensions and working age and disability benefits to rise in line with consumer prices index (CPI) inflation of 5.2% from next April.
- An increase in the state pension age to 67, phased in over two years from April 2026.
- A deferral of the planned January 3p fuel price increase to August, with the August increase cancelled.
- A new Seed Enterprise Investment Scheme (SEIS) to be launched from April 2012, with 50% tax relief for investments of up to £100,000 and a capital gains tax (CGT) exemption for reinvestment.
- A freezing of the CGT annual exemption for 2012/13.
- A variety of measures to increase the availability of finance for small and medium-sized enterprises.
- The extension of the small business rate relief for a further six months from 1 October 2012.