What to take from Chancellor Osborne's Statement

This morning Chancellor Osborne delivered his Spring Budget Statement emphasising the improvements being made in the economy whilst also highlighting the need for more work to be done to support exports, investment, manufacturing and savers. The key points are below:

UK Growth

• OBR has now revised growth higher to 2.7% in 2014 from 2.4% in the Autumn statement, and 2.3% next year, 2.6% in 2016 and 2017 
• The OBR estimates the economy will be larger this year than it was in 2008. 
• 24% fall in claimant count in one year 
• OBR predicts earnings will grow faster than inflation this year 

Public Finances

• The deficit will be 6.6% next year, 5.5% and 4.4% in the following years to reach 0.8% by 2018/19 
• Borrowing will be £95bn, £75bn, £44bn and £17bn in the next few years then followed by a surplus - this year’s borrowing will be £108bn 
• Reduced interest payments as a result of lower borrowing costs will save every family £2000 a year 
• Debt will peak at 78% in 2015/2016 before easing to 76.5% in 2017/2018 
• Welfare cap will be £119bn in 2015-16 and will be voted on in parliament. Any breach will need approval from the parliament - state pensions exempt 

Tax

• HMRC’s budget will be raised to tackle tax avoidance 
• 15% stamp duty on corporates buying houses worth £500k - down from £2m 
• Basic tax allowance will rise to £10,500 and higher rate threshold will rise to £41,865 and then another 1% next year 

Exports

• Double lending to £3bn and interest cut for export financing 
• The taxes on private flights will be increased whilst all long haul flight tax rates will be capped 

Investment

• £200m available to repair roads and local authorities will have to bid for this funding 
• £270m for Mersey Gateway Bridge 
• Extend grants to smaller business to widen apprentices programme 
• Annual business investment allowance of £250k to be doubled and extended to 2015 

Manufacturing

• £7bn package to cut British business’ energy costs 
• Compensation worth £1bn to protect manufacturers from green levies 
• Fuel duty rise due in September cancelled 

Savers

• Cash ISAs and stock ISAs combined into one product and transfers from shares into cash will be allowed 
• ISA limit will rise to £15k 
• Issuance of pensioner bonds and a maximum of £10k can be saved in each bond 
• 10% savings tax rate will be removed 
• Compulsory annuity purchases will be abolished

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