LONDON Dec 5 British finance minister George
Osborne presented his half-yearly budget statement to parliament
Following are the highlights from his speech:
BRITISH ECONOMY IS HEALING
"It's taking time, but the British economy is healing. After
the biggest financial crash of our lifetimes, people know that
we face deep seated problems at home and abroad.
"The deficit has fallen by a quarter in just two years. And
today's figures show it is forecast to continue to fall."
"We reaffirm our commitment to reducing the deficit, setting
out the details of our spending plans for 2015-16 and rolling
forward an outline framework into 2017-18."
"If, for instance, lower growth was the result of the
Government's fiscal policy, they (OBR)would say so. But they do
not. They say the economy has "performed less strongly" than
they had expected.
"As a result the OBR forecast the economy will grow by 1.2
percent next year. Then 2.0 percent in 2014. 2.3 percent in
2015. 2.7 percent in 2016 and 2.8 percent in 2017. So the
economy is recovering. It's recovering more quickly than many of
"Instead of peaking at 8.7 percent, the OBR now expect
unemployment to peak at 8.3 percent. More jobs means that the
impact of the weaker than forecast GDP on the public finances
has been less than some might have expected."
"When the transfer is excluded, as we show in the document,
the deficit also falls from 7.9 percent last year to 7.7 percent
this year, then 6.9 percent next year and falls in every single
"This is the commitment that we will balance the
cyclically-adjusted current budget over the coming five years. I
can tell the House that the OBR have assessed that we are, in
their words, 'on course' to meet our fiscal mandate.
"But the OBR assess in their central forecast that we do not
meet the supplementary objective that aims to have debt falling
by 2015-16. The point at which debt starts to fall has been
delayed by one year, to 2016-17.
"In short, the tougher economic conditions mean that while
our deficit is forecast to go on falling, instead of taking
three years to get our debt falling, it's going to take four."
"This lower deficit is delivered by our public spending
plans and we are going to stick with those plans. Overall, we
are not going faster or slower with those plans; the measures I
will announce in this Autumn Statement are fiscally neutral
across this Parliament.
"The detail of departmental spending plans for 2015-16 will
be set at a spending review, which will be announced during the
first half of next year. We extend the consolidation for one
further year, into 2017-18."
"We have in this Parliament already reduced the amount of
tax relief we give to the very largest pension pots. From
2014-15, I will further reduce the lifetime allowance from 1.5
million pounds to 1.25 million pounds and reduce the annual
allowance from 50,000 pounds to 40,000 pounds.
"Most working age benefits including Job Seekers Allowance,
Employment and Support Allowance and Income Support - will be
uprated by 1 percent for the next three years."
"The higher rate threshold will be increased by 1 percent in
the tax years 2014-15 and 2015-16.
"From next April, the personal allowance will rise by a
further 235 pounds - that means a total increase next year of
1,335 pounds - the highest cash increase ever. I propose to
extend the benefits of this further increase to higher rate
"We are consulting on new tax incentives for shale gas and
announcing the creation of a single Office for Unconventional
Gas so that regulation is safe but simple."
"We are launching a new 1.5 billion-pound export finance
facility to support the purchase of British exports."
"I am today cutting the main corporation tax rate again by a
further 1 percent. From April 2014, the corporation tax rate in
Britain will stand at 21 percent."
"We will not pass the benefit of this reduced rate onto
banks, and to ensure that we meet our revenue commitments, the
Bank Levy rate will be increased to 0.130 percent next year."
"There is a 3 pence per litre rise planned for this January.
Some have suggested we delay it until April. I disagree. I
suggest we cancel it altogether. There will be no 3 pence fuel
tax rise this January."