Government message is that the plan is working, the economic outlook is better and the austerity measures will continue.
Opposition argument is that it is not actually helping people with a continued squeeze on standard of living and increases in the cost of living. The recovery is still based on an increase in personal debt and it is an unsustainable economic recovery.
My view for what its worth is that it is just small measures designed to appeal to specific groups but the growth figures are better than expected however the big question of whether this is a truly sustainable recovery remains and just based on another stimulation of the housing market.
Key Points
Growth
Better then expected projected GDP growth of 1.4% this year and 2.4% in 2014
Borrowing
2013/14 borrowing forecast is revised down to £111bn – £9bn less than expected.
Public sector net borrowing forecast to be 5.6% in 2014, then 4.4%, 2.7% and 1.2% in subsequent years, with a small surplus by 2018/19
Housing
From April 2015, non-UK residents will have to pay CGT ( Capital Gains Tax)on property in Britain, including selling of that property at the same rate as UK residents.
£1bn of loans to unlock large housing developments outside London
Pensions
The state pension age raised to 68 was brought forward from 2046 to mid 2030s and to 69 in the late 2040’, This means that if you are now in your 40’s you will have to wait until you are 68 to get your state pension and if you are in your thirties you will have to wiat until you are 68.
Business
Business rate increases in England and Wales capped to 2% next year, rather than the rate of inflation, in an effort to boost firms and High Streets.
£1,000 cut in business rates for smallest retailers, and a new “re-occupation relief”, that will halve the bill for firms moving into empty premises
Employer National Insurance contributions to be removed on 1.5 million jobs for young people.
Duties and Personal Taxation
Green levies on energy bills to be rolled back by average £50 per household.
Fuel duty frozen and will remain at 57.95 pence per litre .
The tax disc, which shows motorists have paid vehicle excise duty, is to be replaced by a new electronic system from October 2014.
The personal income tax allowance will rise to £10,000 from April 2014. It will then increase by the Consumer Prices Index (CPI) measure of inflation in future years, starting from 2015-16.
Individuals can transfer up to £1,000 of their personal tax allowance between married couples and civil partners from 2015. To benefit from this one person must earn under the personal allowance, currently at £9,440 but rising to £10,000 in April 2014, and the other must not earn more than the basic rate threshold
