Autumn Statement reflects Government confidence in the reviving economy

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Autumn Statement reflects Government confidence in the reviving economy

After three years of announcing Budgets on the back foot, George Osborne was able deliver the Autumn Statement today in a buoyant and confident mood as he announced the biggest upgrade to official growth forecasts since the millennium. The Office for Budget Responsibility has raised its growth forecast for this year from 0.6 per cent to 1.4 per cent, and for next year from 1.8 per cent to 2.4 per cent. Like the last three years, the Chancellor told the packed Commons that the Government’s deficit reduction plan was ‘working’ but he now has a reviving economy to support his rhetoric. This was not an

Autumn Statement full of surprises, as most of the key announcements were pushed out in Tuesday’s and Wednesday’s press. Yesterday, Chief Secretary to the Treasury Danny Alexander unveiled a New Infrastructure Plan, including projects such as the Northern Line extension, a new railway station at Gatwick and a new nuclear power station at Wylfa, North Wales, that would be supported by £25bn from six major insurers and Government funds generated through selling off their 40% stake in the Eurostar. Today the Chancellor announced that the Government will also invest £1bn in infrastructure to unlock approximately 250,000 new homes over the next six years. The Government has finally also addressed business rates reform. The Chancellor confirmed that business rates will be capped at 2 per cent in England and Wales from April 2014 rather than the RPI-linked 3 per cent rise. These reforms will cost the Government approximately £300m next year. John Rogers, chief financial officer at J Sainsbury, said the cap was ‘a welcome first step towards much needed business rate reform.’ It is exactly that, a step in the right direction, but even more encouraging was George Osborne’s announcement that the Government would begin ‘options for longer-term administrative reform of business rates post-2017 when the next revaluation is scheduled.’ There still needs to be a major rethink on how to make business rates a fairer and more flexible tax. When the Shadow Chancellor, Ed Balls delivered his respond to the Statement, the Conservative backbenchers jeered and cheered in a clearly pre-planned effort to distract and disturb their adversary. But today George Osborne delivered a confident and sensible Autumn Statement on the backdrop of a growing economy. The opposition will already be concerned. To download the Autumn Statement, please click here. Andrew Todd, Senior Account Executive

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