Autumn Statement 2012: The key points

George Osborne announced benefits for drivers and UK firms in his 2012 Autumn Statement

George Osborne announced his economic forecast to the Commons today his economic forecast. Drivers and UK firms will benefit hugely, with a complete cancellation of the fuel duty increase and a cut of corporation rate by 1% to 21%.  

Full coverage of chancellor George Osborne's Autumn Statement 2012

Here are the key points from the Autumn Statement:

ECONOMY

Growth forecast for 2012 downgraded by Office for Budget Responsibility (OBR) to -0.1%.

GDP growth has been downgraded for every year of the forecast period to 1.2% in 2013, 2% in 2014, 2.3% in 2015, 2.7% in 2016, and 2.8% in 2017.

Unemployment predicted by OBR to peak at 8.3%, with employment rising every year.

The deficit is forecast to fall from 7.9% last year to 6.9% this year, then 6.1%, 5.2%, 4.2%, and 2.6%, reaching 1.6% in 2017/18, which breaches the Conservative's manifesto promise.

Borrowing is forecast to fall from £108 billion this year, to £99 billion, £88 billion, £73 billion and £49 billion in later years, reaching £31 billion in 2017/18.

Target of debt falling by 2015/16 is to be missed - this will now happen in 2016/17. The period of austerity has been extended by one year to 2017/18.

SPENDING


Civil service budgets to be cut by 1% next year and 2% in 2014, with NHS and schools exempted. Local government budgets will be exempt from next year's cut but will be cut by 2% in 2014.

Capital investment in infrastructure is to total £5 billion over two years, including £1 billion for roads, upgrading the A1, A30, and M25.

0.7% of income will be spent on foreign aid next year but the Dfid budget will be adjusted so not a penny more will be spent.

The High Speed 2 rail link is to be extended to the North West and to West Yorkshire. In London, the Northern Line of the Underground is to be extended to Battersea and a similar development will be applied to the Olympic Park.

£600 million will be invested in science, £270 million in further education colleges, and £1 billion will open free schools and academies. Osborne signaled an end national wage for teachers with the introduction of pay in proportion with performance - Michael Gove will outline the details in the coming future.

20,000 new homes will be built, stronger flood defences, broadband expansion and ultra fast broadband in 12 smaller cities have also been promised.

TAX


Additional spending of £77 million for HM Revenue and Customs to fight tax avoidance expected to increase money collected by £2 billion a year.

Osborne talked tough on tax evasion. £5 billion will be collected from the undisclosed swiss bank accounts from UK residents. Tax loopholes are to be closed with immediate effect. 2,500 more tax inspectors will be going after tax evaders and avoiders. The HMRC will be immune from departmental cuts.

There will be no new tax on property. Meaning no mansion tax, which was a key part of the Lib Dem's 2010 manifesto.

Capital gains tax annual exempt amount is to increase by 1% over the same period, reaching £11,100 and inheritance tax nil-band rate to rise from £325,000 now to £329,000 in 2015/16.

There will be consultation on tax incentives for shale gas.

The main rate of corporation tax is to be cut by 1% to 21% in April 2014.

The bank levy rate will be increased to 0.13% next year.

Income tax personal allowance is to increase by £1,335 - £235 more than previously announced - so no tax will be paid on earnings under £9,440.

The threshold for 40% rate of income tax is to rise by 1% in 2014 and 2015 from £41,450 to £41,865 and then £42,285.

No net rise in taxes in the Autumn Statement.

WELFARE


Most working age benefits to rise by 1% for the next three years.

Child benefit is to rise by 1% for two years from April 2014.

PENSIONS


The basic state pension is to rise by 2.5% next year to £110.15 a week.

The lifetime tax-free allowance for pension funds is to be cut from 2014/15 from £1.5 million to £1.25 million. Annual allowance is to be cut from £50,000 to £40,000, saving £1 billion.

FUEL


The planned 3p-per-litre planned rise in fuel duty has been cancelled.