Autumn Statement 2010
Our Autumn Statement for 2011 is now live here.
The coalition government has unveiled its replacement for the previous administration's Pre-Budget Report by presenting its Autumn Statement.
Small businesses looking for reassurances over the economic future of the UK will be among those interested in the presentation of the coalition's Autumn Statement.
The plans outline the government's replacement for the previous administration's Pre-Budget Report and provide small business owners with a chance to assess where the United Kingdom currently stands.
Announcing the Statement, Chancellor of the Exchequer George Osborne revealed that the economic growth forecast for this year has been increased, as many economic experts had predicted. The Chancellor said that growth for 2010 is now estimated to reach 1.8 per cent - having earlier been forecast at 1.2 per cent.
However, this rise will be followed by slower-than-expected growth in 2011 and 2012, with economic increase estimates falling from 2.3 per cent to 2.1 per cent and 2.8 per cent to 2.6 per cent respectively. The reduced estimates can be attributed to the forthcoming increase in VAT, which will see the rate rise from 17.5 per cent to 20 per cent on January 4th next year and reduced consumer confidence following the £80 billion spending cuts announced by the government.
Job security could also play a part in falling consumer confidence, although the Chancellor highlighted the Office for Budget Responsibility's (OBR) prediction that public sector job losses will total 330,000. The figure was originally feared to be 490,000. Another piece of good news to stem from the Autumn Statement was the fact that the UK's borrowing forecast for the current financial year has been revised downwards by £1 billion. Total borrowing is now expected to fall from £148.5 billion to just £18 billion by 2015-16. This prompted Mr Osborne to emphasise the OBR's view that Britain will not experience a double-dip recession.
The British Retail Consortium (BRC) welcomed the figures but urged the Chancellor to be cautious. Stephen Robertson, the organisation's Director General, said Mr Osborne should use his "better-than-expected position" as a platform for easing tax burdens on businesses and householders in order to deliver on his promise of getting back to an 80:20 balance between cuts and taxation.
"Using any extra money he finds himself with to hold back next April's business rates increases and to remove the £1 billion carbon reduction stealth tax he's slapped on businesses would support retails' dual role in growing jobs and the economy while holding down household bills," he added.
It would appear that these calls have not fallen on deaf ears, as business secretary Vince Cable yesterday (November 29th) outlined the coalition's Growth Review, saying that the private sector will be put first with regard to changes to taxation, regulation and spending. Under the terms of the review, government departments will be required to present action plans on how they will contribute to reform structural barriers across the economy and remove barriers in sectors where there are "clear opportunities for growth".
Dr Cable said: "We cannot lay out plans for how the economy will grow - growth is delivered by the private sector.
"What we can do is provide the conditions to promote a new economic dynamism, harnessing our strengths, removing the barriers and putting the private sector first when it comes to decisions on tax, regulation and spending."
The government has also published a new paper outlining details of its corporate tax reform programme. Essential reforms included in the paper are designed to increase the tax competitiveness of the UK. As well as reducing rates, which the Chancellor announced in the June Budget, the government plans to introduce new Controlled Foreign Company rules and commit to creating a new Patent Box. David Gauke, the Exchequer Secretary to the Treasury, said that the changes will give the UK a chance to reverse the recent trend which has seen businesses leave the UK amid concerns over tax competitiveness.
"Our tax system was once viewed as an asset. And it needs to be an asset again," he commented.
"That is why the government is prioritising corporate tax reform. Responding to the concerns of business, the UK is headed for a more competitive, simpler and more stable tax system in the future, creating the right conditions for investment."
Posted by Jacob Williams
