Live blog of all the developments in today’s set piece announcement
13.30 INITIAL SUMMARY
Osborne’s Autumn Statement contained very little news for the construction industry right up to the last minute - when he unveiled a major reform of Stamp Duty Land Tax. The ramifications of this change will be picked over in the hours to come, but in general it will be seen as a boost to housebuilders if Osborne is correct in his claim that 98% will pay less tax. The eye-watering 12% Stamp Duty tax on home sales above £1.5m pound may hit some luxury London developers, but it’s hard to imagine a strong backlash to this.
Britain is “on course for prosperity”. Osborne sits down.
“My final measure”. Complete reform of Stamp Duty - this is big news. Distortions can be severe in current system. The burden have increased on lower and middle income families. “Badly designed tax on aspiration.” Abolishing the “slab “system. 2% between £125k and 250k, 5% up to £950k, 10% up to £1.5m, and 12% over that.
Stamp duty will be cut for 98% of those that pay it. Average home in London big reduction.
Tax cut of £800m. Only homes above £937k see an increase in Stamp Duty. Become effective from midnight tonight. Those exchanged contracts will be able to choose whether to pay under new system or old.
“In stark contrast to shambles of anti-aspirational homes tax the party opposite wants to impose.”
Plan to back businesses to employ more apprentices - jobs tax on employment of apprentices will be abolished altogether. “When people take a chance on young people we will back them, not tax them.”
Osborne now on to pensions. Pretty meagre gruel for the construction industry in this statement so far.
Now the expected “Northern Powerhouse” section. “Today confirm tender for new franchises for northern rail networks, to replace Pacer trains.” Sovereign wealth fund for the North. New arts space to be built in Manchester. But no approval for HS3 funding. “Northern Powerhouse at the heart of this statement,” he says - but it feels like there’s very little of significance in this.
“A major investment in nation’s infrastructure,” he says. More under this parliament as a share of GDP than under Labour. However, beyond expanding tax relief to flood defence projects, there seems to be nothing new in this section beyond the National INfrastructure Plan announced yesterday. “Britain is raising its ambition,” Osborne says.
Full review of the structure of business rates
Also made an announcement on Stamp Duty there - I think he said stamp duty on properties over £2m to be double the inflation rate.
Now makes a very childish quip about Miliband being a candidate to replace the voice for Wallace and Gromit. Not sure what relevance it has to the economy, but gets lots of cheers.
Going to consult on the operation of a number of tax structures - including umbrella companies - and whether they should be limited. These are used on a widespread basis in the construction sector, particularly since this year’s crackdown on so-called false self employment. It will be interesting to see what the reaction to this is.
25% tax on profits from multinationals who export profits to other countries outside of the UK. This will raise £1bn in the next five years. Banks also to contribute £4bn more in tax in next five years.
Commits to extend the £20m Cathedral Renovation Fund to extend repairs to churches across the country
Committs to delivering further £5bn next parliament from crackdowns on tax avoidance and evasion
Osborne announces £2bn extra each year for the NHS, as trailed at the weekend, and £1.2bn for GP services. “You cannot have a strong NHS without a strong economy.”
“Will not hide from the house there will have to be further substantial cuts in public spending.” “People are saying it will be impossible to produce these savings - this year we will spend £10bn less than set out in spending plans,” he adds.
“I prefer lower tax receipts offset by lower interest payments”
He admits tax receipts have not been rising as fast as predicted. Cuts to out of work benefits are saving £4bn, he says.
Borrowing falls every year - less than expected in the budget, however. Osborne clearly feels he has scored a major political point however because it hasn’t grown, as expected. Tory benches very pleased. Overall annual deficit is half what it was in 2010, though remember the continuing existence of any deficit means national debt is still rising.
Debt and deficit: The deficit is falling this year and will in every year. Final year borrowing will actually be lower than predicted in the budget. OBR has made revision to the way national accounts are created - but they are comparable to forecasts in the budget, he says.
OBR revising down inflation to 1.7% next year.
Earnings grew 4% in the last year for those in work. Wages to rise faster than inflation for the next five years.
1,000 new jobs created for every day govt in office, Osborne claims. Job growth fastest in Scotland and the North of England. “Progressive politics in action.”
Also revising up employment forecasts for this year - twofold, with half a million new jobs created
Revising up growth forecasts from 2.7% to 3% for this year. Growth seven times the rate of France. Next year it will fall to 2.4%, however. Manufacturing growing faster than any other sector - Osborne says this shows growth is more balanced.
Office of Budget Responsibility (OBR) revising down forecast for global growth. “Britain can’t be immune to global economy”
First mention of the “northern Powerhouse” phrase - but he hasn’t yet revealed what he’s going to do about it. First the borrowing and growth figures. Osborne says recent revisions to GDP reveal the economy has never actually been in recession since 2010. Some in the construciton industry may beg to differ.
Osborne says the measures announced today will actually tighten the public finances. They will include a boost to infrastructure, he said.
Osborne rises. Four years ago presented the “accounts of an economy in crisis”. Now fastest growing major economy in the world. “Our long-term economic plan is working”
Prime minister’s questions seem to be running over a bit - George Osborne is expected to rise for the Autumn Statement at any moment now.
In addition to further spending announcements, Osborne will also be updating parliament on the critical borrowing, spending and growth figures, and is thought likely to have to admit to having failed to meet deficit reduction targets because of lower than expected tax receipts. This will be important for the industry if it limits his hand in pledging further capital spending.
With the National Infrastructure Plan update published yesterday, much of the news that is of direct relevance to Building readers is already out in the public domain. The National Infrastructure Plan itself is available here.
But it is likely there is still further news for the construction industry. Osborne made heavy hints in his October Conservative Party conference speech that he will unveil a series of measures to boost the economy of the North – to create what he called a “Northern Powerhouse”. Those in the construction industry are hoping these measures will include approval for a £7bn trans-pennine link, dubbed HS3.
In addition there has been much speculation about serious reform to Stamp Duty Land Tax, which could have serious implications for housing developers, particularly – if we believe the speculation – those developing more expensive homes.
Good afternoon, and welcome to today’s live coverage of chancellor George Osborne’s fifth Autumn Statement, his last before next year’s general election.
As usual there has been a huge flurry of activity and announcements in advance of today’s statement, which will begin at 12.30AM. My colleagues on Building have already provided extensive coverage which you can see here: