Chancellor of the Exchequer, George Osborne, has announced that the UK should be out of deficit by 2018-19. The announcement came as part of the Treasury’s Autumn Statement, which Osborne delivered to the House of Commons.
The Office for Budget Responsibility (OBR) has revised down the UK’s underlying deficit to 6.8% for 2013, dropping to 5.6% next year. Predictions for the subsequent years see the deficit falling to 4.4%, 2.7% and 1.2%, before a small surplus is realised in 2018-19.
Elsewhere, the government predicts that its own borrowing will be around £111bn for 2013, dropping to £96bn in 2014-15. Predictions then point to government borrowing of £79bn in 2015-16, down to £51bn the following year, and to £23bn the year after that.
The UK growth forecast in the Autumn Statement contained some good news in the short term, but slightly less positive beyond that. For 2013, the forecast has gone up from 0.6% to 1.4%, while 2014 is also revised up from 1.8% to 2.4%. Previous growth forecasts beyond 2014 have been slightly revised down, however, to 2.2%, 2.6%, and 2.7% for 2015, 2016 and 2017 respectively.
The Autumn Statement also included some measures designed to boost British business. Osborne announced that export finance capacity is to be doubled to £50bn, on the back of government’s ambitious target to double UK exports by 2020. Business rates in England are to be capped at 2% rather than being linked to inflation. Shares purchased in exchange-traded funds (ETF) will no longer be liable for stamp duty. For smaller companies, business rate relief has been extended until April 2015, while some small high street shops will be eligible for a two-year plan to discount business rates. At a cost of £465m to the government, employer contributions to employee National Insurance contributions will now start from when the employee turns 21. Previously, employers were required to begin contributions with employees aged 16 and over. Finally, over 50,000 additional Start Up Loans are to be made available for people wanting to start their own business.
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