1W

DP-E01-S3Business

AUTUMN STATEMENT SPECIAL EDITION

Keep calmand carry on

WESTERN DAILY PRESS THURSDAY DECEMBER 4 2014 AUTUMN STATEMENT 3WDP-E01-S32 AUTUMN STATEMENT THURSDAY DECEMBER 4 2014 WESTERN DAILY PRESS WDP-E01-S3

Chancellor:‘End whatwe started’BY JAMES TAPSFIELDnews@westerndailypress.co.uk

George Osborne appealed forvoters to let him “finish thejob” of overhauling the eco-nomyyesterday as he admittedthe deficit was not falling asfast as hoped.Delivering his last Autumn

Statement before the generalelection, the Chancellor saidforecasts showed Britain wasthe fastest growing advancedeconomy in theworld and hun-dreds of thousands of jobswerebeing generated.But he confirmed that bor-

rowing was estimated to be£91.3 billion this year – ratherthan the £86.4 billion theOfficefor Budget Responsibility pre-viously expected.The chancellor revealed he

would miss his annual bor-rowing target by £5 billion butsaid the public finances wouldbe less badly hit than expectedby disappointing income taxreceipts.Mr Osborne also said fore-

casts for future years had beenrevised up, meaning thatpublic financeswere “in amar-ginally stronger position”than expected at the Budget inMarch.“Now Britain faces a

choice,” Mr Osborne told theCommons. “Do we squanderthe economic security we havegained, go back to the dis-astrous decisions on spendingand borrowing and welfarethat got us into this mess?“Ordowe finish the job – and

go on building the secure eco-nomy that works for everyone.I say: we stay the course. Westay on course to prosperity.”Mr Osborne said the OBR

growth estimates for this year -revised upwards from 2.7 percent to 3 per cent – showed thecoalition’s pace of fiscal con-solidation was right.“Now there are those who

say we should cut even faster,and those who say we shouldcut more slowly.“But we’ve got the pace right

– as clearly demonstrated bythe fact that our economy isgrowing faster than almostany other.“Andbecause of carefulman-

agement, we can afford to putpart of that underspendmoneyinto our National Health Ser-vice to cope with the pressuresit faces.” He said 500,000 jobs

firms that shift profits over-seas, and £1.2 billion revenuefrom bank foreign exchangetrading fines to go to GP prac-tices.Here is an snapshot of other

key areas discussed in yester-day’s statement:MOTORISTSDrivers’ hopes that the cur-

rent freeze on fuel duty is set tolast appear to have beendashed. Mr Osborne con-firmed yesterday that thealready-announced freeze forApril 2015 would go ahead. Butyesterday’s report by theOffice for Budget Responsib-ility (OBR) spoke of a duty risein September 2015 and Aprilrises in line with RPI inflationin each of the years from 2016to 2019.BUSINESS RATESThe Chancellor cheered

British industry by announ-cing a review of business ratesunder moves to boost the eco-nomy and create jobs. He saidthe terms of reference of thereview will be published nextweek, reporting back by thetime of the Budget in 2016.CHARITIESHospice charities have long

been subject to “unfair” rulesthat force them to pay VATwhen theNHSdoes not, so theywill be in line for a refund, theChancellor said. From Aprilnext year, UK search andrescue and air ambulancecharities will be able to claimrefunds on VAT on goods andservices for their non-businessactivities, under the plans an-nounced yesterday.WAGESAn extra £3 million is to be

spent enforcing the nationalminimum wage, the Chancel-lor announced. HM Revenueand Customs will have abudget of £12.2 million in 2015/16 to make sure firms pay thestatutory rate.GOOGLE TAXFrom April, the Treasury

will introduce a 25 per cent taxon profits generated by mul-tinationals from economicactivity in the UK which theythen artificially shift out of thecountry. The tax avoidanceloophole has been nicknamedthe ”Google tax” because thearrangement – involving pay-ments between different partsof a company to shift profitsfrom higher-tax countries tothose with lower taxes – iswidely used by technologyfirms.TRANSPORTFamilies flying off on hol-

iday will benefit from theChancellor’s decision to scrapthe Air Passenger Duty (APD)airport departure tax for chil-drenunder 12 years of age fromMay 1 2015.And theChancellorhas gone further by also an-nouncing that APD will be ab-olished for children under 16from 2016. Mr Osborne alsoannounced that airlines weregoing to be required to list ontickets just how much of thecost had gone on fuel sur-charges.

had been created over the pastyear, and inflation and the de-ficit was falling. Mr Osbornedismissed suggestions thatmany of the posts created werepart time, insisting 85 per centwere full time. They are alsobeing generated fastest in Scot-land and the North of England.Mr Osborne insisted the UK’sbudget deficit had been halvedsince 2010 and was still fore-cast to fall in every year. By2018-19 the government is dueto record a surplus of £4 bil-lion. The OBR also anticipatesabove-inflation wage rises forthe next four years – althoughMr Osborne said the 1 per centcap on public sector riseswould be maintained.Mr Osborne said the fiscal

position was helped becausethe welfare bill and debt in-terest repayments had been re-duced. But he conceded that“substantial savings” in publicspending will still be requiredin the next parliament.The Chancellor also un-

veiled: Inheritance tax exemp-tions for aid workers who go tohelp with the Ebola crisis, acrackdown on tax avoidanceincluding a 25 per cent levy on

How much the annual borrowingtarget has been missed by

£5bn

The OBR growth estimates for thisyear

3%

The 1 per cent cap on publicsector rises will be maintained

1%

The amount of business rate relieffrom small businesses

100%

Businesses cheer forrates system overhaulThe outdated business ratestax system will finally be over-hauled after a pledge from theChancellor in the AutumnStatement.Business rates is a tax paid

by the occupier of a buildingsuch as a shop, office or ware-house based on its value backin 2008, before the recession,but rising with inflation.Yesterday George Osborne

said the government recog-nised the impact of businessrates on many businesses andannounced a full review of thefuture structure of businessrates to report by theBudget in

2016. The Chancellor alsopledged an extension of thedoubling of Small BusinessRate Relief to April 2016; a twoper cent cap on the inflationincrease in the rates multipli-er; and raising the £1,000 busi-ness rates discount for shops,pubs, cafes and restaurantswith a rateable value of £50,000or below to £1,500 in 2015-16.The review has been wel-

comed by the business com-munity. James Durie, execut-ive director of the BristolChamber, said it was a “majorcoup”. “This iniquitous tax issapping good companies'

strength year after year, longbefore they make a singlepenny in profits,” he said.“In the last week we have

seen this evident in the ex-tremes of Black Friday andCyber Monday, illustrating thecompetition we see betweenthe high street and online re-tailers.“The business rates system

hasmeant that this hasn’t beena fair fight, with one arm ofhigh street retailers held backby this vindictive tax.“This is a step in the right

direction and this reviewmustdeliver fundamental changeand not get bogged down byshort-term political thinking.”Paul Matthews, head of theBristol office of commercialproperty experts BrutonKnowles, said: “This is a vic-tory for common sense.

Reform of the archaic businessrates system is long overdueand it’s good to see the Gov-ernment finally acknow-ledging and responding to theneed for change in order tomake the system fairer forbusiness.” Perran Jervis, part-ner and head of retail and con-sumer goods at Bristol lawfirm TLT, based in VictoriaStreet, said: “Many retailersregard business rates as acharge that has little to dowiththeir own profitability andmore to do with the financialneeds of the local authority.“It's good to see the Gov-

ernment making some effortsto tackle this longstanding bugbear for retailers.” MarkOwen, regional chairman ofthe Federation of Small Busi-nesses in Gloucestershire andWest of England said the

review should be sooner“We are disappointed with

the timing,” he said. “Wewould have preferred this tohave happened sooner ratherthan later because it feels asthough we have been treadingwater on this issue for fiveyears now. We needed a firmercommitment now to reform asthis could have been a realboost to help revive our highstreets for example.”And Mark Rigby, chief ex-

ecutive at rates appeals spe-cialist CVS, added a note ofcaution.“We need to understand the

scope and boundaries of thisreview.For as longas theChan-cellor remains wedded to fisc-ally neutral reform and a ‘zerosum game’ in business rates,there are a limited range ofoptions for change.”

Prime Minister David Cameronahead of the Autumn Statementbeing given to MPs

Top: Chancellor of the ExchequerGeorge Osborne and Treasury ChiefSecretary Danny Alexander leavingthe Treasury; Below: James Duriefrom the Bristol Chamber

Stamp dutyreform givesbuyers reliefGeorge Osborne unveiled adramatic root and branchreform of stamp duty yester-day, promising to save home-buyers thousands of pounds.Delivering a nakedly polit-

ical pre-election AutumnStatement, the Chancellorbranded the existing levy a“tax on aspiration” and said hewould scrap the ‘cliff edges’which distort the propertymarket.The surprise shake-up

emerged afterMrOsbornewasforced to admit that weak taxrevenues mean the deficit isnot falling as fast as hoped andwill be over £90 billion thisyear.He pointed to forecasts of

surging 3 per cent growth andappealed for voters to let him“finish the job” of overhaulingthe economy.Labour seized on the missed

deficit targets. But the attackwas blunted by the surprisefinal flourish of Mr Osborne’spackage, which effectivelyditched the long-standingstamp duty structure.The Chancellor declared

that the ‘slab’ system – whichsees buyers charged a percent-age of the full purchase priceas soon as the value hitsthresholds – was being aban-doned.Instead, from midnight to-

night different percentagerates will be charged to eachportion of the price.Mr Osborne said the reform

represented a tax cut of £800million per year.Only homes that cost over

£937,000 will see their bill goup. A £5 million pound housewill see its stamp duty risefrom £350,000 to £514,000.Outlining the shift, which

will be seen as an effort tooutflank Labour’s policy of in-troducing a ‘mansion tax’, MrOsborne told the Commons:“There has been a debate inthis country about taxinghouses.“The system I introduce

today replaces a badly de-signed system that has distor-ted ourhousingmarket for dec-ades. It reduces the stamptaxes for 98 per cent of peoplewho pay them in this country.It increases the taxes on themost expensive 2 per cent ofhomes, but only asks people topay that tax when they buy thehouse and they have themoney. And it does not involvea revaluation of hundreds of

thousands of homes in thiscountry.”The Chancellor said Office

for Budget Responsibility(OBR) forecasts showed Bri-tain would be the fastest grow-ing advanced economy in theworld this year and hundredsof thousands of jobswere beinggenerated.But growth is expected to

slip back below 2.5 per cent insubsequent years. And he con-firmed that borrowing was es-timated be £91.3 billion thisyear – rather than the £86.4billion previously expected.“Now Britain faces a

choice,” Mr Osborne told MPs.“Dowe squander the economicsecurity we have gained, goback to the disastrous de-cisions on spending and bor-rowing and welfare that got usinto this mess?“Ordowe finish the job – and

go on building the secure eco-nomy that works for every-one.“I say:we stay the course.We

stay on course to prosperity.”The Chancellor insisted the

UK’s budget deficit had beenhalved since 2010 and was stillforecast to fall in every year. By2018-19 the government is dueto record a surplus of £4 bil-lion.The OBR also anticipates

above inflation wage rises forthe next four years.Mr Osborne said the fiscal

position was helped becausethe welfare bill and debt in-terest repayments had been re-duced, meaning extra cashcould be diverted to the NHS.But he conceded that “sub-

stantial savings” in publicspending will still be requiredin the next parliament.On personal taxation, he

said the higher rate thresholdwould go up in line with in-flation to just under £42,385.Declaring that the case for

’English Votes for EnglishLaws’ was “unanswerable”, hesignalled that powers over cor-poration taxwould be devolvedto Northern Ireland.However, shadow chancellor

Ed Balls said Mr Osborne hadquestions to answer aboutliving standards, wages andtax receipts, adding: “There isa cost of living crisis.”And taunting the Chancel-

lor’s missed target on the de-ficit, Mr Balls told MPs: “He isgoing to carry on missing hisdeficit targets for year afteryear.”

WESTERN DAILY PRESS THURSDAY DECEMBER 4 2014 AUTUMN STATEMENT 3WDP-E01-S32 AUTUMN STATEMENT THURSDAY DECEMBER 4 2014 WESTERN DAILY PRESS WDP-E01-S3

Chancellor:‘End whatwe started’BY JAMES TAPSFIELDnews@westerndailypress.co.uk

George Osborne appealed forvoters to let him “finish thejob” of overhauling the eco-nomyyesterday as he admittedthe deficit was not falling asfast as hoped.Delivering his last Autumn

Statement before the generalelection, the Chancellor saidforecasts showed Britain wasthe fastest growing advancedeconomy in theworld and hun-dreds of thousands of jobswerebeing generated.But he confirmed that bor-

rowing was estimated to be£91.3 billion this year – ratherthan the £86.4 billion theOfficefor Budget Responsibility pre-viously expected.The chancellor revealed he

would miss his annual bor-rowing target by £5 billion butsaid the public finances wouldbe less badly hit than expectedby disappointing income taxreceipts.Mr Osborne also said fore-

casts for future years had beenrevised up, meaning thatpublic financeswere “in amar-ginally stronger position”than expected at the Budget inMarch.“Now Britain faces a

choice,” Mr Osborne told theCommons. “Do we squanderthe economic security we havegained, go back to the dis-astrous decisions on spendingand borrowing and welfarethat got us into this mess?“Ordowe finish the job – and

go on building the secure eco-nomy that works for everyone.I say: we stay the course. Westay on course to prosperity.”Mr Osborne said the OBR

growth estimates for this year -revised upwards from 2.7 percent to 3 per cent – showed thecoalition’s pace of fiscal con-solidation was right.“Now there are those who

say we should cut even faster,and those who say we shouldcut more slowly.“But we’ve got the pace right

– as clearly demonstrated bythe fact that our economy isgrowing faster than almostany other.“Andbecause of carefulman-

agement, we can afford to putpart of that underspendmoneyinto our National Health Ser-vice to cope with the pressuresit faces.” He said 500,000 jobs

firms that shift profits over-seas, and £1.2 billion revenuefrom bank foreign exchangetrading fines to go to GP prac-tices.Here is an snapshot of other

key areas discussed in yester-day’s statement:MOTORISTSDrivers’ hopes that the cur-

rent freeze on fuel duty is set tolast appear to have beendashed. Mr Osborne con-firmed yesterday that thealready-announced freeze forApril 2015 would go ahead. Butyesterday’s report by theOffice for Budget Responsib-ility (OBR) spoke of a duty risein September 2015 and Aprilrises in line with RPI inflationin each of the years from 2016to 2019.BUSINESS RATESThe Chancellor cheered

British industry by announ-cing a review of business ratesunder moves to boost the eco-nomy and create jobs. He saidthe terms of reference of thereview will be published nextweek, reporting back by thetime of the Budget in 2016.CHARITIESHospice charities have long

been subject to “unfair” rulesthat force them to pay VATwhen theNHSdoes not, so theywill be in line for a refund, theChancellor said. From Aprilnext year, UK search andrescue and air ambulancecharities will be able to claimrefunds on VAT on goods andservices for their non-businessactivities, under the plans an-nounced yesterday.WAGESAn extra £3 million is to be

spent enforcing the nationalminimum wage, the Chancel-lor announced. HM Revenueand Customs will have abudget of £12.2 million in 2015/16 to make sure firms pay thestatutory rate.GOOGLE TAXFrom April, the Treasury

will introduce a 25 per cent taxon profits generated by mul-tinationals from economicactivity in the UK which theythen artificially shift out of thecountry. The tax avoidanceloophole has been nicknamedthe ”Google tax” because thearrangement – involving pay-ments between different partsof a company to shift profitsfrom higher-tax countries tothose with lower taxes – iswidely used by technologyfirms.TRANSPORTFamilies flying off on hol-

iday will benefit from theChancellor’s decision to scrapthe Air Passenger Duty (APD)airport departure tax for chil-drenunder 12 years of age fromMay 1 2015.And theChancellorhas gone further by also an-nouncing that APD will be ab-olished for children under 16from 2016. Mr Osborne alsoannounced that airlines weregoing to be required to list ontickets just how much of thecost had gone on fuel sur-charges.

had been created over the pastyear, and inflation and the de-ficit was falling. Mr Osbornedismissed suggestions thatmany of the posts created werepart time, insisting 85 per centwere full time. They are alsobeing generated fastest in Scot-land and the North of England.Mr Osborne insisted the UK’sbudget deficit had been halvedsince 2010 and was still fore-cast to fall in every year. By2018-19 the government is dueto record a surplus of £4 bil-lion. The OBR also anticipatesabove-inflation wage rises forthe next four years – althoughMr Osborne said the 1 per centcap on public sector riseswould be maintained.Mr Osborne said the fiscal

position was helped becausethe welfare bill and debt in-terest repayments had been re-duced. But he conceded that“substantial savings” in publicspending will still be requiredin the next parliament.The Chancellor also un-

veiled: Inheritance tax exemp-tions for aid workers who go tohelp with the Ebola crisis, acrackdown on tax avoidanceincluding a 25 per cent levy on

How much the annual borrowingtarget has been missed by

£5bn

The OBR growth estimates for thisyear

3%

The 1 per cent cap on publicsector rises will be maintained

1%

The amount of business rate relieffrom small businesses

100%

Businesses cheer forrates system overhaulThe outdated business ratestax system will finally be over-hauled after a pledge from theChancellor in the AutumnStatement.Business rates is a tax paid

by the occupier of a buildingsuch as a shop, office or ware-house based on its value backin 2008, before the recession,but rising with inflation.Yesterday George Osborne

said the government recog-nised the impact of businessrates on many businesses andannounced a full review of thefuture structure of businessrates to report by theBudget in

2016. The Chancellor alsopledged an extension of thedoubling of Small BusinessRate Relief to April 2016; a twoper cent cap on the inflationincrease in the rates multipli-er; and raising the £1,000 busi-ness rates discount for shops,pubs, cafes and restaurantswith a rateable value of £50,000or below to £1,500 in 2015-16.The review has been wel-

comed by the business com-munity. James Durie, execut-ive director of the BristolChamber, said it was a “majorcoup”. “This iniquitous tax issapping good companies'

strength year after year, longbefore they make a singlepenny in profits,” he said.“In the last week we have

seen this evident in the ex-tremes of Black Friday andCyber Monday, illustrating thecompetition we see betweenthe high street and online re-tailers.“The business rates system

hasmeant that this hasn’t beena fair fight, with one arm ofhigh street retailers held backby this vindictive tax.“This is a step in the right

direction and this reviewmustdeliver fundamental changeand not get bogged down byshort-term political thinking.”Paul Matthews, head of theBristol office of commercialproperty experts BrutonKnowles, said: “This is a vic-tory for common sense.

Reform of the archaic businessrates system is long overdueand it’s good to see the Gov-ernment finally acknow-ledging and responding to theneed for change in order tomake the system fairer forbusiness.” Perran Jervis, part-ner and head of retail and con-sumer goods at Bristol lawfirm TLT, based in VictoriaStreet, said: “Many retailersregard business rates as acharge that has little to dowiththeir own profitability andmore to do with the financialneeds of the local authority.“It's good to see the Gov-

ernment making some effortsto tackle this longstanding bugbear for retailers.” MarkOwen, regional chairman ofthe Federation of Small Busi-nesses in Gloucestershire andWest of England said the

review should be sooner“We are disappointed with

the timing,” he said. “Wewould have preferred this tohave happened sooner ratherthan later because it feels asthough we have been treadingwater on this issue for fiveyears now. We needed a firmercommitment now to reform asthis could have been a realboost to help revive our highstreets for example.”And Mark Rigby, chief ex-

ecutive at rates appeals spe-cialist CVS, added a note ofcaution.“We need to understand the

scope and boundaries of thisreview.For as longas theChan-cellor remains wedded to fisc-ally neutral reform and a ‘zerosum game’ in business rates,there are a limited range ofoptions for change.”

Prime Minister David Cameronahead of the Autumn Statementbeing given to MPs

Top: Chancellor of the ExchequerGeorge Osborne and Treasury ChiefSecretary Danny Alexander leavingthe Treasury; Below: James Duriefrom the Bristol Chamber

Stamp dutyreform givesbuyers reliefGeorge Osborne unveiled adramatic root and branchreform of stamp duty yester-day, promising to save home-buyers thousands of pounds.Delivering a nakedly polit-

ical pre-election AutumnStatement, the Chancellorbranded the existing levy a“tax on aspiration” and said hewould scrap the ‘cliff edges’which distort the propertymarket.The surprise shake-up

emerged afterMrOsbornewasforced to admit that weak taxrevenues mean the deficit isnot falling as fast as hoped andwill be over £90 billion thisyear.He pointed to forecasts of

surging 3 per cent growth andappealed for voters to let him“finish the job” of overhaulingthe economy.Labour seized on the missed

deficit targets. But the attackwas blunted by the surprisefinal flourish of Mr Osborne’spackage, which effectivelyditched the long-standingstamp duty structure.The Chancellor declared

that the ‘slab’ system – whichsees buyers charged a percent-age of the full purchase priceas soon as the value hitsthresholds – was being aban-doned.Instead, from midnight to-

night different percentagerates will be charged to eachportion of the price.Mr Osborne said the reform

represented a tax cut of £800million per year.Only homes that cost over

£937,000 will see their bill goup. A £5 million pound housewill see its stamp duty risefrom £350,000 to £514,000.Outlining the shift, which

will be seen as an effort tooutflank Labour’s policy of in-troducing a ‘mansion tax’, MrOsborne told the Commons:“There has been a debate inthis country about taxinghouses.“The system I introduce

today replaces a badly de-signed system that has distor-ted ourhousingmarket for dec-ades. It reduces the stamptaxes for 98 per cent of peoplewho pay them in this country.It increases the taxes on themost expensive 2 per cent ofhomes, but only asks people topay that tax when they buy thehouse and they have themoney. And it does not involvea revaluation of hundreds of

thousands of homes in thiscountry.”The Chancellor said Office

for Budget Responsibility(OBR) forecasts showed Bri-tain would be the fastest grow-ing advanced economy in theworld this year and hundredsof thousands of jobswere beinggenerated.But growth is expected to

slip back below 2.5 per cent insubsequent years. And he con-firmed that borrowing was es-timated be £91.3 billion thisyear – rather than the £86.4billion previously expected.“Now Britain faces a

choice,” Mr Osborne told MPs.“Dowe squander the economicsecurity we have gained, goback to the disastrous de-cisions on spending and bor-rowing and welfare that got usinto this mess?“Ordowe finish the job – and

go on building the secure eco-nomy that works for every-one.“I say:we stay the course.We

stay on course to prosperity.”The Chancellor insisted the

UK’s budget deficit had beenhalved since 2010 and was stillforecast to fall in every year. By2018-19 the government is dueto record a surplus of £4 bil-lion.The OBR also anticipates

above inflation wage rises forthe next four years.Mr Osborne said the fiscal

position was helped becausethe welfare bill and debt in-terest repayments had been re-duced, meaning extra cashcould be diverted to the NHS.But he conceded that “sub-

stantial savings” in publicspending will still be requiredin the next parliament.On personal taxation, he

said the higher rate thresholdwould go up in line with in-flation to just under £42,385.Declaring that the case for

’English Votes for EnglishLaws’ was “unanswerable”, hesignalled that powers over cor-poration taxwould be devolvedto Northern Ireland.However, shadow chancellor

Ed Balls said Mr Osborne hadquestions to answer aboutliving standards, wages andtax receipts, adding: “There isa cost of living crisis.”And taunting the Chancel-

lor’s missed target on the de-ficit, Mr Balls told MPs: “He isgoing to carry on missing hisdeficit targets for year afteryear.”

WESTERN DAILY PRESS THURSDAY DECEMBER 4 2014 AUTUMN STATEMENT 5WDP-E01-S34 AUTUMN STATEMENT THURSDAY DECEMBER 4 2014 WESTERN DAILY PRESS WDP-E01-S3

Here are a few insights intowhat happened yesterday asthe statement was announcedand what it means.

Minister told off forbudget questionSpeaker John Bercow hasticked off a ToryMP for being a“cheeky little boy”. Formershadow minister Bill Wigginasked a question to ChancellorGeorge Osborne despite leav-ing the Commons for a periodof time during the AutumnStatement, an approach not inkeeping with parliamentaryconvention. Mr Bercow ini-tially denied the North Here-fordshire MP a reply from MrOsborne. But the Chancellorvolunteered to answer, insist-ing Mr Wiggin had asked agood question about stampduty. Following the reply fromMr Osborne, the Speaker toldMr Wiggin: “I’m glad you havegot your answer but to toddleout of the chamber and thenbeetle back in and expect totake part in defiance of conven-tions of the House renders youa cheeky little boy.” MrWigginreplied: “There’s nothing littleabout me, Mr Speaker.” MrBercow added: “I use the termwith some poetic licence, it hasto be admitted.”

Liberal Democratsspeak on out cutsLiberal Democrat Cabinetminister Vince Cable has toldhis officials not to engage withTreasury work on cuts for thenext parliament. The BusinessSecretary has also asked theindependent Office for BudgetResponsibility to set out thedifference between Tory andLib Dem economic plans afterthe general election. Mr Cablesaid the Autumn Statement de-livered by George Osbornetoday was a coalition effort,but there are major divisionsbetween the two governingparties about how to proceedwith the deficit reductioneffort after 2015/16. Lib Demleader and Deputy Prime Min-ister Nick Clegg, who wasabsent from the Commons forthe Autumn Statement as hewas on a regional visit to Corn-wall, has described Tory plansto balance the books by cuttingspending, including on wel-fare, without raising taxes onthe wealthy as “complete andutter nonsense”.

Spending set forminimum wageAn extra £3 million is to bespent enforcing the nationalminimum wage, the Chancel-lor announced. HM Revenueand Customs will have abudget of £12.2 million in 2015/16 to make sure firms pay thestatutory rate. Ministers said

the extra funding will increaseHMRC’s capacity to take en-forcement action against em-ployers found to be paying lessthan the minimum. Last yearrevenue inspectors found £4.65million inwages owed to 22,500workers, while 55 companieshave been named and shamed.Business minister Jo Swinsonsaid: “Paying less than theminimum wage is wrong andillegal. Employers need toknow that they will face toughconsequences if they break thelaw.”

Relief for children’sTV tax welcomedTax relief for live-action chil-dren’s TV programmes hasbeen welcomed as a boost forboth audiences and broad-casters. The measure, an-nounced by theChancellor anddue to come into force in April,comes in addition to similarbreaks for high-quality pro-grammes, animation andvideo games as well as ascheme for the film industry. Ina further boost for the creativesector, the Government is alsoto launch a formal consulta-tion next year about tax relieffor orchestras – beginning in2016 – to recognise their “cul-tural value and artistic im-portance”. Anna Home, whochairs the Children’s MediaFoundation, said the relief forchildren’s showswould bring a“much-needed boost”.

New science researchis a vision spearheadA new £200 million researchfacility in Manchester willspearhead Chancellor GeorgeOsborne’s vision for Britishscience which he declared tobe a “personal priority”. In hisAutumn Statement Mr Os-borne also pledged to “revolu-

tionise” support for futuregenerations of scientists by of-fering the first Government-backed student loans – worthup to £10,000 each – to post-graduates seeking masters de-grees. And he announced thatthe UK had been awarded the“lead role” in the next majormission to explore the planetMars. The £235 million SirHenry Royce Institute for Ad-vanced Materials Researchand Innovation in Manchesteris central toGovernment plansfor a “northern powerhouse”to fuel the economy.

Benefit freeze is aconcern for charitiesCharities expressed concernthat the Chancellor has de-cided to freeze UniversalCredit work allowances as partof a raft of welfare announce-ments. George Osborne saidthe allowance will be main-tained at its current rate for ayear from April 17 in additionto the three years already an-nounced, to offset increasedchildcare support for those onthe benefit. In addition, if aclaimant leaves UniversalCredit and returns within sixmonths, they will be able tokeep their existing assessmentperiod. Barnardo’s chief exec-utive Javed Khan said: “Barn-ardo’s is deeply concerned thatGovernment plans to furtherfreeze working benefits leavepoor children out in the cold.Struggling families arealready telling us they arehaving to choose between heat-ing and eating, as cuts have leftthem unable to pay electricitybills. The harsh reality is thatthe downturn isn’t yet over forthousands of parents. For the3.7million poor children livingin households that struggledaily with income cuts andsoaring living costs, the wel-fare system is a vital safety netprotecting themselves andtheir families from destitu-tion.”

“Non-doms” to facehigher chargesSo-called “non-doms” whohave lived in Britain for 12years or more will face highercharges, Chancellor GeorgeOsborne has announced.Individuals who are “non-

domiciled” in theUK – becausethey have their permanenthome elsewhere – can opt onlyto pay tax on income that isbrought into the country.However, they currently

have to pay a £30,000 annuallevy after they have lived inBritain for seven of the pastnine years, and £50,000 whenthey have been here for 12 ofthe past 14 years. Under thechanges unveiled in theAutumn Statement, the latterfee will increase to £60,000.

The UK budgetrevealed for thenext few monthsBY MARCUS DENBYbusiness@westerndailypress.co.uk

The main points of the Chan-cellor’s Autumn Statement aredetailed here:TAXReform of residential prop-

erty stamp duty so that ratesfall only to that part of theproperty price that fallswithineach band – 0 per cent in first£125,000 then 2 per cent on theportion up to £250,000 then 5per cent up to £925,000, then 10per centup to £1.5million, then12 per cent on anything abovethat, saving £4,500 on averagepriced home. UK’s net pay-ments to European Union tofall by about £1 billion thisyear and next year and declinein real terms over the next fiveyears. Inheritance tax exemp-tion extended to cover aidworkers who die dealing withhumanitarian emergencies.Hospice charities, search

and rescue and air ambulanceto be granted VAT refunds.New 25 per cent diverted

profits tax on multi-nationalprofits generated in the UKand “artificially” moved out ofthe country. Changes to ruleson bank profit offsets to raisealmost £4 billion. Clampdownon aggressive tax avoidance toraise £2.8 billion. Charge fornon-dom tax status to rise to£60,000 a year for those res-ident for 12 of the last 14 yearsand £90,000 for those in thecountry for 17 of 20 years.Annual charge on properties

“enveloped” to avoid stampduty to rise by 50 per centabove inflation on propertiesover £2 million. Immediate re-duction in oil industry sup-plementary charge from 32 percent to 30 per cent.Air passenger duty for chil-

dren under 12 abolished inMay 2015 and for under 16s in2016. Government to legislateto devolve corporation tax toNorthern Ireland if the North-ern Ireland executive shows itcan manage the financial im-plications. People who dieunder 75 to be enabled to passon annuities tax free.Limit on saving in New Isas

to rise to £15,240 and Isas to beinherited tax free.National Insurance on

young apprentices to be ab-olished. Income tax free per-sonal allowance to rise to£10,600 rather than theplanned £10,500 next year,giving wage boost of £825 a

year. Higher rate income taxthreshold to rise to £42,385 nextyear.EMPLOYMENT, BUSINESS ANDEDUCATIONHalf a million new jobs cre-

ated over the last year, withnumbers claiming unemploy-ment benefit falling by 23 percent and young people on long-term jobless benefit almosthalving.Unemployment fore-cast at 5.4 per cent next yearbefore settling at 5.3 per cent.Regular earnings growth is

now faster than inflation, at 4per cent for those in full-timework for over a year. OBR pre-dicts wage growth above in-flation for the next five years.Expansion of British Busi-

ness Bank, extension for a fur-ther year in the Funding forLending scheme for smallerfirms and new tax break fororchestras and children’s tele-vision tax credit. R&D taxcredit increased for small andmedium companies to 230 percent and for large firms to 11per cent, while small businessrate relief is doubled for an-other year. Inflation-linked in-crease in business ratescapped at 2 per cent and dis-count for shops, pubs and cafesincreased by 50 per cent to£1,500. Government-backedloans of up to £10,000 madeavailable for all students un-dertaking post-graduate mas-ters degrees.INVESTMENTMr Osborne confirmed ad-

ditional £2 billion every yearfor the frontline of the NHSand a £1.2 billion investment inGP services paid for from for-eign exchange fines. Employ-ment Allowance of £2,000 to beextended to carers. Tenderingfor new franchises for North-ern Rail and Trans-PennineExpress to replace pacer car-riages with modern trains. In-vestment of £250 million innew advanced material sci-ence institute in Manchesterwith branches in Leeds, Shef-field and Liverpool. New sov-ereign wealth fund to investproceeds from shale gas re-sources in the north, in thenorth of England.PENSIONS AND EFFICIENCIESPublic sector pay restraint

in the next Parliament to de-liver savings “commensurate”with the £12 billion achievedover the past four years.Commitment to complete

public service pension re-forms, saving £1.3 billion ayear. Plan published for a fur-ther £10 billion of efficienciesin Whitehall, and Chancellorcommits to raising at least £5billion by cracking down ontax avoidance and evasion.Universal Credit work allow-

ances to be frozen for a furtheryear, tax credits to be cut whenoverpayments are certain andunemployment benefit to beended for migrants with noprospect of work. Total welfarespending set to be £1 billionlower thanBudget forecast andto continue falling as share ofGDP.

Top: Chancellor George Osborne outside 11Downing Street; Below: Mr Osborne (left) andTreasury Chief Secretary Danny Alexander

The extra amount to be spent onenforcing the minimum wage

£3mFurther cuts are announced in theAutumn Statement

STAMP DUTY CHANGES: EXAMPLES

AUTUMN STATEMENT DIGESTAUTUMN STATEMENT: HIGHLIGHTS

WESTERN DAILY PRESS THURSDAY DECEMBER 4 2014 AUTUMN STATEMENT 5WDP-E01-S34 AUTUMN STATEMENT THURSDAY DECEMBER 4 2014 WESTERN DAILY PRESS WDP-E01-S3

Here are a few insights intowhat happened yesterday asthe statement was announcedand what it means.

Minister told off forbudget questionSpeaker John Bercow hasticked off a ToryMP for being a“cheeky little boy”. Formershadow minister Bill Wigginasked a question to ChancellorGeorge Osborne despite leav-ing the Commons for a periodof time during the AutumnStatement, an approach not inkeeping with parliamentaryconvention. Mr Bercow ini-tially denied the North Here-fordshire MP a reply from MrOsborne. But the Chancellorvolunteered to answer, insist-ing Mr Wiggin had asked agood question about stampduty. Following the reply fromMr Osborne, the Speaker toldMr Wiggin: “I’m glad you havegot your answer but to toddleout of the chamber and thenbeetle back in and expect totake part in defiance of conven-tions of the House renders youa cheeky little boy.” MrWigginreplied: “There’s nothing littleabout me, Mr Speaker.” MrBercow added: “I use the termwith some poetic licence, it hasto be admitted.”

Liberal Democratsspeak on out cutsLiberal Democrat Cabinetminister Vince Cable has toldhis officials not to engage withTreasury work on cuts for thenext parliament. The BusinessSecretary has also asked theindependent Office for BudgetResponsibility to set out thedifference between Tory andLib Dem economic plans afterthe general election. Mr Cablesaid the Autumn Statement de-livered by George Osbornetoday was a coalition effort,but there are major divisionsbetween the two governingparties about how to proceedwith the deficit reductioneffort after 2015/16. Lib Demleader and Deputy Prime Min-ister Nick Clegg, who wasabsent from the Commons forthe Autumn Statement as hewas on a regional visit to Corn-wall, has described Tory plansto balance the books by cuttingspending, including on wel-fare, without raising taxes onthe wealthy as “complete andutter nonsense”.

Spending set forminimum wageAn extra £3 million is to bespent enforcing the nationalminimum wage, the Chancel-lor announced. HM Revenueand Customs will have abudget of £12.2 million in 2015/16 to make sure firms pay thestatutory rate. Ministers said

the extra funding will increaseHMRC’s capacity to take en-forcement action against em-ployers found to be paying lessthan the minimum. Last yearrevenue inspectors found £4.65million inwages owed to 22,500workers, while 55 companieshave been named and shamed.Business minister Jo Swinsonsaid: “Paying less than theminimum wage is wrong andillegal. Employers need toknow that they will face toughconsequences if they break thelaw.”

Relief for children’sTV tax welcomedTax relief for live-action chil-dren’s TV programmes hasbeen welcomed as a boost forboth audiences and broad-casters. The measure, an-nounced by theChancellor anddue to come into force in April,comes in addition to similarbreaks for high-quality pro-grammes, animation andvideo games as well as ascheme for the film industry. Ina further boost for the creativesector, the Government is alsoto launch a formal consulta-tion next year about tax relieffor orchestras – beginning in2016 – to recognise their “cul-tural value and artistic im-portance”. Anna Home, whochairs the Children’s MediaFoundation, said the relief forchildren’s showswould bring a“much-needed boost”.

New science researchis a vision spearheadA new £200 million researchfacility in Manchester willspearhead Chancellor GeorgeOsborne’s vision for Britishscience which he declared tobe a “personal priority”. In hisAutumn Statement Mr Os-borne also pledged to “revolu-

tionise” support for futuregenerations of scientists by of-fering the first Government-backed student loans – worthup to £10,000 each – to post-graduates seeking masters de-grees. And he announced thatthe UK had been awarded the“lead role” in the next majormission to explore the planetMars. The £235 million SirHenry Royce Institute for Ad-vanced Materials Researchand Innovation in Manchesteris central toGovernment plansfor a “northern powerhouse”to fuel the economy.

Benefit freeze is aconcern for charitiesCharities expressed concernthat the Chancellor has de-cided to freeze UniversalCredit work allowances as partof a raft of welfare announce-ments. George Osborne saidthe allowance will be main-tained at its current rate for ayear from April 17 in additionto the three years already an-nounced, to offset increasedchildcare support for those onthe benefit. In addition, if aclaimant leaves UniversalCredit and returns within sixmonths, they will be able tokeep their existing assessmentperiod. Barnardo’s chief exec-utive Javed Khan said: “Barn-ardo’s is deeply concerned thatGovernment plans to furtherfreeze working benefits leavepoor children out in the cold.Struggling families arealready telling us they arehaving to choose between heat-ing and eating, as cuts have leftthem unable to pay electricitybills. The harsh reality is thatthe downturn isn’t yet over forthousands of parents. For the3.7million poor children livingin households that struggledaily with income cuts andsoaring living costs, the wel-fare system is a vital safety netprotecting themselves andtheir families from destitu-tion.”

“Non-doms” to facehigher chargesSo-called “non-doms” whohave lived in Britain for 12years or more will face highercharges, Chancellor GeorgeOsborne has announced.Individuals who are “non-

domiciled” in theUK – becausethey have their permanenthome elsewhere – can opt onlyto pay tax on income that isbrought into the country.However, they currently

have to pay a £30,000 annuallevy after they have lived inBritain for seven of the pastnine years, and £50,000 whenthey have been here for 12 ofthe past 14 years. Under thechanges unveiled in theAutumn Statement, the latterfee will increase to £60,000.

The UK budgetrevealed for thenext few monthsBY MARCUS DENBYbusiness@westerndailypress.co.uk

The main points of the Chan-cellor’s Autumn Statement aredetailed here:TAXReform of residential prop-

erty stamp duty so that ratesfall only to that part of theproperty price that fallswithineach band – 0 per cent in first£125,000 then 2 per cent on theportion up to £250,000 then 5per cent up to £925,000, then 10per centup to £1.5million, then12 per cent on anything abovethat, saving £4,500 on averagepriced home. UK’s net pay-ments to European Union tofall by about £1 billion thisyear and next year and declinein real terms over the next fiveyears. Inheritance tax exemp-tion extended to cover aidworkers who die dealing withhumanitarian emergencies.Hospice charities, search

and rescue and air ambulanceto be granted VAT refunds.New 25 per cent diverted

profits tax on multi-nationalprofits generated in the UKand “artificially” moved out ofthe country. Changes to ruleson bank profit offsets to raisealmost £4 billion. Clampdownon aggressive tax avoidance toraise £2.8 billion. Charge fornon-dom tax status to rise to£60,000 a year for those res-ident for 12 of the last 14 yearsand £90,000 for those in thecountry for 17 of 20 years.Annual charge on properties

“enveloped” to avoid stampduty to rise by 50 per centabove inflation on propertiesover £2 million. Immediate re-duction in oil industry sup-plementary charge from 32 percent to 30 per cent.Air passenger duty for chil-

dren under 12 abolished inMay 2015 and for under 16s in2016. Government to legislateto devolve corporation tax toNorthern Ireland if the North-ern Ireland executive shows itcan manage the financial im-plications. People who dieunder 75 to be enabled to passon annuities tax free.Limit on saving in New Isas

to rise to £15,240 and Isas to beinherited tax free.National Insurance on

young apprentices to be ab-olished. Income tax free per-sonal allowance to rise to£10,600 rather than theplanned £10,500 next year,giving wage boost of £825 a

year. Higher rate income taxthreshold to rise to £42,385 nextyear.EMPLOYMENT, BUSINESS ANDEDUCATIONHalf a million new jobs cre-

ated over the last year, withnumbers claiming unemploy-ment benefit falling by 23 percent and young people on long-term jobless benefit almosthalving.Unemployment fore-cast at 5.4 per cent next yearbefore settling at 5.3 per cent.Regular earnings growth is

now faster than inflation, at 4per cent for those in full-timework for over a year. OBR pre-dicts wage growth above in-flation for the next five years.Expansion of British Busi-

ness Bank, extension for a fur-ther year in the Funding forLending scheme for smallerfirms and new tax break fororchestras and children’s tele-vision tax credit. R&D taxcredit increased for small andmedium companies to 230 percent and for large firms to 11per cent, while small businessrate relief is doubled for an-other year. Inflation-linked in-crease in business ratescapped at 2 per cent and dis-count for shops, pubs and cafesincreased by 50 per cent to£1,500. Government-backedloans of up to £10,000 madeavailable for all students un-dertaking post-graduate mas-ters degrees.INVESTMENTMr Osborne confirmed ad-

ditional £2 billion every yearfor the frontline of the NHSand a £1.2 billion investment inGP services paid for from for-eign exchange fines. Employ-ment Allowance of £2,000 to beextended to carers. Tenderingfor new franchises for North-ern Rail and Trans-PennineExpress to replace pacer car-riages with modern trains. In-vestment of £250 million innew advanced material sci-ence institute in Manchesterwith branches in Leeds, Shef-field and Liverpool. New sov-ereign wealth fund to investproceeds from shale gas re-sources in the north, in thenorth of England.PENSIONS AND EFFICIENCIESPublic sector pay restraint

in the next Parliament to de-liver savings “commensurate”with the £12 billion achievedover the past four years.Commitment to complete

public service pension re-forms, saving £1.3 billion ayear. Plan published for a fur-ther £10 billion of efficienciesin Whitehall, and Chancellorcommits to raising at least £5billion by cracking down ontax avoidance and evasion.Universal Credit work allow-

ances to be frozen for a furtheryear, tax credits to be cut whenoverpayments are certain andunemployment benefit to beended for migrants with noprospect of work. Total welfarespending set to be £1 billionlower thanBudget forecast andto continue falling as share ofGDP.

Top: Chancellor George Osborne outside 11Downing Street; Below: Mr Osborne (left) andTreasury Chief Secretary Danny Alexander

The extra amount to be spent onenforcing the minimum wage

£3mFurther cuts are announced in theAutumn Statement

STAMP DUTY CHANGES: EXAMPLES

AUTUMN STATEMENT DIGESTAUTUMN STATEMENT: HIGHLIGHTS

WESTERN DAILY PRESS THURSDAY DECEMBER 4 2014 AUTUMN STATEMENT 7WDP-E01-S36 AUTUMN STATEMENT THURSDAY DECEMBER 4 2014 WESTERN DAILY PRESS WDP-E01-S3

Balls ragesat ‘brokenpromises’BY JEFF WELLSnews@westerndailypress.co.uk

Working people are still facinga cost-of-living crisis despitethe economic news andpolicies announced in Chan-cellor George Osborne’sAutumn Statement yesterday,Ed Balls has said.The shadow chancellor said

the Office for Budget Respons-ibility’s new figures an-nounced yesterday show againthat wage growth is weakerthan expected,which is in turnhitting tax revenues. Mr Ballssaid wages have not kept upwith prices in everymonth butone over the last four and ahalfyears, leading to a squeeze onliving standards.In his response to the Chan-

cellor’s statement, the Labourfrontbencher said: “On livingstandards,wages have not keptpace with prices for 52 of thelast 53 months. Today’s fore-cast from the OBR confirmsthatwage growth is once againweaker than expected. Work-ing people are now £1,600 ayear worse off than they werein 2010. Someone in full-timework is now £2,000 a yearworse off. For working peoplethere is a cost-of-living crisisand that squeeze on livingstandards is not only hittingfamily budgets – it has also ledto a shortfall in tax reven-ues.”Mr Balls said the Chancellor

hadmissed his targets on erad-icating the deficit by 2015 andto bring the national debtdown, but had not told MPs byhow much.The shadow chancellor also

asked “how much worse”things had got for Governmentborrowing since March’sBudget.He said: “The result of that

shortfall in tax revenues isthat, once again, I believe theChancellor has had to reviseup his forecasts for Govern-ment borrowing. You have toldtheHouse today that the deficitfor this fiscal year is now ex-pected to be £91.3 billion. Butyou did not set out in detailhow much worse things aresince the Budget.“So, in your answer can you

tell the House how much hasborrowing this year been re-vised up compared to yourBudget forecast? Back in 2010the Chancellor and the PrimeMinister pledged to balancethe budget by the end of thisParliament and see the nation-al debt falling this year.“The Prime Minister said in

2010 that in five years’ time wewill have balanced the books.Today the Chancellor has, Ibelieve, announced the deficitnext year is forecast to be £75.9billion.“Can you confirm that

number and the fact that na-tional debt next year is fore-

billion lower in the next parlia-ment. Don’t you see thosedown grades to growth are badnews? Without decisive actionto sustain growth, get livingstandards rising, a recoveryfor the many, not the few, youare going to carry on missingyour deficit targets year afteryear after year.”On net migration, Mr Balls

asked: “Can you tell the Housewhat is the OBR estimate fornet migration over the next 12months that underpins thegrowth and public financeforecast? It seems highly un-likely it is going to be any-where near the Prime Minis-ter’s forecast for the tens ofthousands. Is it going to beover 100,000 next year, over150,000, over 200,000? And thistime could the Chancellor re-member to tell the Prime Min-ister what the facts were?”Mr Balls said welfare spend-

ing in the current Parliamentwould be more than £20 billionhigher than forecast, castingdoubt on the Chancellor’sclaim to make further cuts of£10 billion in the next Parlia-ment. He said a £3 billion real-terms cut on tax credits wouldhit three million workingpeople on middle and lowerincomes, adding: “Once again(MrOsborne is) hittingwomenharder than men.”Mr Balls went on: “I have got

to say the Prime Minister letthe cat out of the bag earlierwhen he referred to masosad-ism. As I understand it,masosadism is someone whoenjoys having pain inflictedupon and enjoys inflictingpain on other people.“We know the Chancellor’s

views on the first – it ratherseems from the way he smiledwhen he announced the taxcredits cuts he’s rather enjoy-ing the secondaswell.Howcanit be fair to hit working peoplewith a £3 billion cut to their taxcredits when he’s spent £3 bil-lion giving a tax cut to peopleearning over £150,000? Howcan it be fair?”“I’ve got to say, for all his

strutting, for all his preening,for all his claims to have fixedthe economy, he promised tomake people better off, work-ing people are worse off.“He promised we were all in

this together and he cut taxesfor millionaires.“He promised to balance the

books in this Parliament andthat commitment is now in tat-ters. Every target missed,every test failed, every prom-ise broken.”In reply to Mr Balls, Mr Os-

borne said: ‘‘With that per-formance we have seen whyhe’s totally unfit in six monthsto be put in charge of thenation’s finances.”He said Mr Balls had re-

peatedly predicted the deficitwould increase but insisted in-dependent forecasts show it isfalling and debt is lower inevery future year.MrOsborne said toMrBalls:

“It’s hardly surprising yourparty has such low economiccredibility when you re-peatedly make predictionsabout theBritish economy thatturn out to be completelywrong.”He added: “People say there

is a split in the leadership ofLabour Party – they are quiteright. It’s between people whoget the deficit figures com-pletely wrong and people whoforget about the deficit all to-gether.”

cast not to fall but to rise? Andlet me ask you – because, whileyou have clearly missed yourtargets, you didn’t give us thescale of how much you’vemissed them by – how muchmore will you have borrowedin this Parliament than youplanned back in 2010?”Mr Balls said he shared the

Chancellor’s concerns aboutthe eurozone and said a planwas needed for strongergrowth inGermany and acrossthe continent. But he insistedthe weakness of the eurozonecouldnot explainwhy –despitethe notable successes of anumber of British companies –the UK’s export performancehad been so poor and so muchworse than other eurozonecountries.He told MPs that since 2010

the UK’s export performancehad been 16th in the G20 and22nd out of 28 countries in theEU. The shadow chancelloralso criticised the fallingnumber of apprenticeships foryoung people this year and thefact that house building was atits lowest level since the 1920s.And he branded Mr Osborne’sinfrastructure plans “pre-heated re-announcements”.Barely a fifth of projects

Proportion of the public who arefeeling ‘no recovery whatsoever’according to a survey

72%The devil (and the likely benefits) are deep in the detailJosephine Bush tax partner atEY in the South West providedthis analysis of the AutumnStatement for the Daily Press

Extension of the FLSschemeThe combination of GDPgrowth and low interest ratesmeans that the appetite for in-vestment and lending is pick-ing up. The Government guar-antee for bank lending,extending the FLS and focus-ing it on SMEs, is a positivestep in the right direction.The announcement will see

banks being able to draw £5 ofcheap credit for every £1 thatthey lend to smaller firms inthe coming year, which shouldgo some way in realigning thedynamic between risk andprofitability for banks as theylook to lend to smaller SMEs.

One step forward but howmany steps back on R&Dtax reliefWhilst the Chancellor focusedon the good news story of the£40 million increase in the

headline rates for both theSME and Large business R&Dtax credit, the changes to whatqualifies for the credit repres-ents a significant turnaround.The industry has worked

hard with the UK governmentto ensure that the regime de-livers a real incentive andtoday’s change threatens to un-dermine confidence in the pro-cess.However, it is very disap-

pointing that the Governmenthas decided to do a U-turn inrelation to consumable itemsincorporated in products thatare sold.Many claimants will recall

that the government widenedthe ‘production guidelines’ inAugust 2011 to include con-sumables as qualifying even ifthey were incorporated in aproduct that was subsequentlysold.Although the net effect of

this reversal and the increasein rate is a £20 million netincrease in the incentive, theimpact of the U-turn may wellhave the biggest impact.

Draining the well of taxavoidanceThe Chancellor’s AutumnStatement will raise almost £9billion from tackling the socalled “tax avoidance, tax plan-ning and fairness,” but over athird of this will come fromrestricting the ability of thebanks to utilise the lossessuffered during the financialcrisis. This will be a concernfor many businesses as itbreaches a long held principlethat companies should getrelief for the costs they incuras they accrue.

Foot on the accelerator forUK infrastructure but willfinancing and the supplychain catch up?Infrastructure is key to theUK’s economic competitive-ness and so the raft of projectsannounced today is long over-due. It is now essential theseprojects receive long-term sup-port across the political spec-trum through the National In-frastructure Plan and theArmitt Review, which calls for

an independent National In-frastructure Commission.However, there are two majorissues that may prove to bestumbling blocks for the gov-ernment in making this am-bition a reality. Firstly, theissue of funding still needs tobe addressed and the othermajor issue is with supplychain. The Government needsto consider how to maximisethe economic benefit for theUK. It could end up shootingitself in the foot if these pro-jects are awarded to foreigncontractors because the Gov-ernment perceives that thereis insufficient capacity orskills in the UK constructionindustry to deliver on the scaledemanded. There needs to be arenewed focus on supportingall industries in the infrastruc-ture supply chain, from con-struction to engineering, toensure the benefits are reapedfor the UK plc.

A tax manifesto formanufacturing?The Chancellor’s smorgasbord

of taxmeasureswas difficult tocategorise, combining anti-avoidancewith incentives, andsmall reductions with funda-mental reform. With the EYAttractiveness survey show-ing that the UK only attracted12 per cent of Europe’s foreigndirect investment (FDI) frommanufacturing, compared to20 per cent for the wider eco-nomy, there was clearly a needfor action. From a manufac-turers’ perspective, the reduc-tion in business rates and thepromised structural reformmay help encourage invest-ment, while the removal of na-tional insurance for appren-tices will help the payroll.However, the positive messagefrom the increases in the rateof the research and develop-ment tax credit was temperedby the restrictions as to whatqualifies. With the continuedlack of any real relief for in-vestment in industrialpremises, yesterday’s an-nouncements may help some-what but the need for reformremains if we are to raiseFDI.

Shadow chancellor Ed Balls said hiscounterpart George Osborne had‘failed every test’. He told MPs thatsince 2010 the UK’s exportperformance had been 16th in theG20 and 22nd out of 28 countriesin the EU

Rejuvenationor deception?Nation’s split

tions to boost small busi-nesses. Over 99 per cent of the87,000 plus registered busi-nesses in our region are SMEsand further packages of sup-port, such as the expansion offinancial support for first-timeexporters, increased rate reliefand access to finance underthe British Business Bank givethese firms cause for celeb-ration. Access to credit stillremains stubbornly difficultfor many small firms, despiteseveral interventions an-nounced since the creditcrunch, so it is too early to saywhether the latest steps to en-courage further bank lendingwill succeed.“Amajor coup for business is

that the Chancellor has com-mitted the government to afundamental review of busi-ness rates and doubled smallbusiness rates relief for a fur-ther year. This iniquitous taxis sapping good companies’strength year after year, longbefore they make a singlepenny in profits. In the lastweekwe have seen this evidentin the extremes of BlackFriday and Cyber Monday, il-lustrating the competition wesee between thehigh street andonline retailers. The businessrates system has meant thatthis hasn’t been a fair fight,with one arm of high streetretailers held back by this vin-dictive tax. Today is a step inthe right direction.“Although the business com-

munity is applauding meas-ures announced today, as wehead towards the general elec-tion there are still fundament-al barriers to growth that needto be addressed. With a verydifficult fiscal position for UKplc over the next five years, allparties will need to remainfocused on making sure eco-nomic growth is central totheir New Year manifestos.”Union leaderMrKenny, said:

“The so-called prudent Mr Os-borne will borrowmore in fiveyears at the Treasury thanLabour chancellors he labelsas profligate did in 13.“The welcome increase in

economic activity is partlylinked to population growth asGDP per head is still three percent below 2007 levels. The realvalue of take-home pay forworkers is 13 per cent belowpre-recession levels whilemany of the new jobs are pre-carious and badly paid. If thisis success, I would not like tothink what failure looks like.”John Longworth, director

general of the British Cham-bers of Commerce, said: “TheChancellor has used the lastAutumn Statement before theelection to demonstrate that heis listening to and supportingBritish businesses across theentire country. By focusing onkey business priorities, suchas Britain’s broken businessrates system and the difficultyof accessing finance forgrowth, the Chancellor hasdemonstrated that he is com-mitted to solving problemsthat hinder the growth aspir-ations of many firms.”Len McCluskey, Unite gen-

eral secretary said: ‘‘The vastmajority of people listening toGeorge Osborne talking aboutan economic recovery willthink it’s a figment of his ima-gination. This is a phoney re-covery.”John Allan, chairman of the

Federation of Small Busi-nesses, said: “The Chancellorhas listened to the needs ofbusiness.”

BY JEFF WELLSnews@westerndailypress.co.uk

Reaction to the Autumn State-ment from across the indus-trial spectrumhas beenmixed,with business leaders praisingannouncements on rates andtrade unions pointing out thatlittle was being done to tacklelow wages.Phil Smith, managing dir-

ector of Business West said:“The Chancellor has delivereda crowd pleasing AutumnStatement for business. By fo-cusing on key barriers togrowth, such as Britain’sbroken business rates systemand the difficulty of accessingfinance for growth, he hasshown a commitment to solv-ing problems that hinder thegrowth aspirations of manyfirms.”But Paul Kenny, general sec-

retary of the GMB union, said:“The so-called prudent Mr Os-borne will borrowmore in fiveyears at the Treasury thanLabour chancellors he labelsas profligate did in 13.Mr Smith said: “Prior to

today, businesses asked forhelp to deal with businessrates, infrastructure and ap-prentices, all of which wereaddressed in a positiveAutumn Statement to close outa year which saw the countryfinally emerge from a dam-aging recession.”He added: “This Autumn

Statement included many ac-

were in construction, Mr Ballstold the House, and since 2010,infrastructure output wasdown over 11 per cent.He said Labour would sup-

port what the Chancellor wasproposing on air passengerduty, but asked – following theSmithCommission proposal todevolve APD to Scotland –whether he would urgentlylead work on a mechanism toensure English airports par-ticularly in the north of Eng-land are not disadvantaged.He alsowelcomed the review

of business rates, but askedwhy the Chancellor could nottake immediate action to adoptLabour’s plan to cut the levyfor small companies and in-crease free childcare for work-ing people. And he urged himto “properly capitalise” thebusiness investment bank andraise as a proportion of earn-ings the national minimumwage.Mr Balls also claimed that

growth had been revised downin 2016, 2017 and 2018.He said: “The OBR figures...

if our economy grew by justhalf a per cent a year fasterthan forecast, government bor-rowing would come in over £32

WESTERN DAILY PRESS THURSDAY DECEMBER 4 2014 AUTUMN STATEMENT 7WDP-E01-S36 AUTUMN STATEMENT THURSDAY DECEMBER 4 2014 WESTERN DAILY PRESS WDP-E01-S3

Balls ragesat ‘brokenpromises’BY JEFF WELLSnews@westerndailypress.co.uk

Working people are still facinga cost-of-living crisis despitethe economic news andpolicies announced in Chan-cellor George Osborne’sAutumn Statement yesterday,Ed Balls has said.The shadow chancellor said

the Office for Budget Respons-ibility’s new figures an-nounced yesterday show againthat wage growth is weakerthan expected,which is in turnhitting tax revenues. Mr Ballssaid wages have not kept upwith prices in everymonth butone over the last four and ahalfyears, leading to a squeeze onliving standards.In his response to the Chan-

cellor’s statement, the Labourfrontbencher said: “On livingstandards,wages have not keptpace with prices for 52 of thelast 53 months. Today’s fore-cast from the OBR confirmsthatwage growth is once againweaker than expected. Work-ing people are now £1,600 ayear worse off than they werein 2010. Someone in full-timework is now £2,000 a yearworse off. For working peoplethere is a cost-of-living crisisand that squeeze on livingstandards is not only hittingfamily budgets – it has also ledto a shortfall in tax reven-ues.”Mr Balls said the Chancellor

hadmissed his targets on erad-icating the deficit by 2015 andto bring the national debtdown, but had not told MPs byhow much.The shadow chancellor also

asked “how much worse”things had got for Governmentborrowing since March’sBudget.He said: “The result of that

shortfall in tax revenues isthat, once again, I believe theChancellor has had to reviseup his forecasts for Govern-ment borrowing. You have toldtheHouse today that the deficitfor this fiscal year is now ex-pected to be £91.3 billion. Butyou did not set out in detailhow much worse things aresince the Budget.“So, in your answer can you

tell the House how much hasborrowing this year been re-vised up compared to yourBudget forecast? Back in 2010the Chancellor and the PrimeMinister pledged to balancethe budget by the end of thisParliament and see the nation-al debt falling this year.“The Prime Minister said in

2010 that in five years’ time wewill have balanced the books.Today the Chancellor has, Ibelieve, announced the deficitnext year is forecast to be £75.9billion.“Can you confirm that

number and the fact that na-tional debt next year is fore-

billion lower in the next parlia-ment. Don’t you see thosedown grades to growth are badnews? Without decisive actionto sustain growth, get livingstandards rising, a recoveryfor the many, not the few, youare going to carry on missingyour deficit targets year afteryear after year.”On net migration, Mr Balls

asked: “Can you tell the Housewhat is the OBR estimate fornet migration over the next 12months that underpins thegrowth and public financeforecast? It seems highly un-likely it is going to be any-where near the Prime Minis-ter’s forecast for the tens ofthousands. Is it going to beover 100,000 next year, over150,000, over 200,000? And thistime could the Chancellor re-member to tell the Prime Min-ister what the facts were?”Mr Balls said welfare spend-

ing in the current Parliamentwould be more than £20 billionhigher than forecast, castingdoubt on the Chancellor’sclaim to make further cuts of£10 billion in the next Parlia-ment. He said a £3 billion real-terms cut on tax credits wouldhit three million workingpeople on middle and lowerincomes, adding: “Once again(MrOsborne is) hittingwomenharder than men.”Mr Balls went on: “I have got

to say the Prime Minister letthe cat out of the bag earlierwhen he referred to masosad-ism. As I understand it,masosadism is someone whoenjoys having pain inflictedupon and enjoys inflictingpain on other people.“We know the Chancellor’s

views on the first – it ratherseems from the way he smiledwhen he announced the taxcredits cuts he’s rather enjoy-ing the secondaswell.Howcanit be fair to hit working peoplewith a £3 billion cut to their taxcredits when he’s spent £3 bil-lion giving a tax cut to peopleearning over £150,000? Howcan it be fair?”“I’ve got to say, for all his

strutting, for all his preening,for all his claims to have fixedthe economy, he promised tomake people better off, work-ing people are worse off.“He promised we were all in

this together and he cut taxesfor millionaires.“He promised to balance the

books in this Parliament andthat commitment is now in tat-ters. Every target missed,every test failed, every prom-ise broken.”In reply to Mr Balls, Mr Os-

borne said: ‘‘With that per-formance we have seen whyhe’s totally unfit in six monthsto be put in charge of thenation’s finances.”He said Mr Balls had re-

peatedly predicted the deficitwould increase but insisted in-dependent forecasts show it isfalling and debt is lower inevery future year.MrOsborne said toMrBalls:

“It’s hardly surprising yourparty has such low economiccredibility when you re-peatedly make predictionsabout theBritish economy thatturn out to be completelywrong.”He added: “People say there

is a split in the leadership ofLabour Party – they are quiteright. It’s between people whoget the deficit figures com-pletely wrong and people whoforget about the deficit all to-gether.”

cast not to fall but to rise? Andlet me ask you – because, whileyou have clearly missed yourtargets, you didn’t give us thescale of how much you’vemissed them by – how muchmore will you have borrowedin this Parliament than youplanned back in 2010?”Mr Balls said he shared the

Chancellor’s concerns aboutthe eurozone and said a planwas needed for strongergrowth inGermany and acrossthe continent. But he insistedthe weakness of the eurozonecouldnot explainwhy –despitethe notable successes of anumber of British companies –the UK’s export performancehad been so poor and so muchworse than other eurozonecountries.He told MPs that since 2010

the UK’s export performancehad been 16th in the G20 and22nd out of 28 countries in theEU. The shadow chancelloralso criticised the fallingnumber of apprenticeships foryoung people this year and thefact that house building was atits lowest level since the 1920s.And he branded Mr Osborne’sinfrastructure plans “pre-heated re-announcements”.Barely a fifth of projects

Proportion of the public who arefeeling ‘no recovery whatsoever’according to a survey

72%The devil (and the likely benefits) are deep in the detailJosephine Bush tax partner atEY in the South West providedthis analysis of the AutumnStatement for the Daily Press

Extension of the FLSschemeThe combination of GDPgrowth and low interest ratesmeans that the appetite for in-vestment and lending is pick-ing up. The Government guar-antee for bank lending,extending the FLS and focus-ing it on SMEs, is a positivestep in the right direction.The announcement will see

banks being able to draw £5 ofcheap credit for every £1 thatthey lend to smaller firms inthe coming year, which shouldgo some way in realigning thedynamic between risk andprofitability for banks as theylook to lend to smaller SMEs.

One step forward but howmany steps back on R&Dtax reliefWhilst the Chancellor focusedon the good news story of the£40 million increase in the

headline rates for both theSME and Large business R&Dtax credit, the changes to whatqualifies for the credit repres-ents a significant turnaround.The industry has worked

hard with the UK governmentto ensure that the regime de-livers a real incentive andtoday’s change threatens to un-dermine confidence in the pro-cess.However, it is very disap-

pointing that the Governmenthas decided to do a U-turn inrelation to consumable itemsincorporated in products thatare sold.Many claimants will recall

that the government widenedthe ‘production guidelines’ inAugust 2011 to include con-sumables as qualifying even ifthey were incorporated in aproduct that was subsequentlysold.Although the net effect of

this reversal and the increasein rate is a £20 million netincrease in the incentive, theimpact of the U-turn may wellhave the biggest impact.

Draining the well of taxavoidanceThe Chancellor’s AutumnStatement will raise almost £9billion from tackling the socalled “tax avoidance, tax plan-ning and fairness,” but over athird of this will come fromrestricting the ability of thebanks to utilise the lossessuffered during the financialcrisis. This will be a concernfor many businesses as itbreaches a long held principlethat companies should getrelief for the costs they incuras they accrue.

Foot on the accelerator forUK infrastructure but willfinancing and the supplychain catch up?Infrastructure is key to theUK’s economic competitive-ness and so the raft of projectsannounced today is long over-due. It is now essential theseprojects receive long-term sup-port across the political spec-trum through the National In-frastructure Plan and theArmitt Review, which calls for

an independent National In-frastructure Commission.However, there are two majorissues that may prove to bestumbling blocks for the gov-ernment in making this am-bition a reality. Firstly, theissue of funding still needs tobe addressed and the othermajor issue is with supplychain. The Government needsto consider how to maximisethe economic benefit for theUK. It could end up shootingitself in the foot if these pro-jects are awarded to foreigncontractors because the Gov-ernment perceives that thereis insufficient capacity orskills in the UK constructionindustry to deliver on the scaledemanded. There needs to be arenewed focus on supportingall industries in the infrastruc-ture supply chain, from con-struction to engineering, toensure the benefits are reapedfor the UK plc.

A tax manifesto formanufacturing?The Chancellor’s smorgasbord

of taxmeasureswas difficult tocategorise, combining anti-avoidancewith incentives, andsmall reductions with funda-mental reform. With the EYAttractiveness survey show-ing that the UK only attracted12 per cent of Europe’s foreigndirect investment (FDI) frommanufacturing, compared to20 per cent for the wider eco-nomy, there was clearly a needfor action. From a manufac-turers’ perspective, the reduc-tion in business rates and thepromised structural reformmay help encourage invest-ment, while the removal of na-tional insurance for appren-tices will help the payroll.However, the positive messagefrom the increases in the rateof the research and develop-ment tax credit was temperedby the restrictions as to whatqualifies. With the continuedlack of any real relief for in-vestment in industrialpremises, yesterday’s an-nouncements may help some-what but the need for reformremains if we are to raiseFDI.

Shadow chancellor Ed Balls said hiscounterpart George Osborne had‘failed every test’. He told MPs thatsince 2010 the UK’s exportperformance had been 16th in theG20 and 22nd out of 28 countriesin the EU

Rejuvenationor deception?Nation’s split

tions to boost small busi-nesses. Over 99 per cent of the87,000 plus registered busi-nesses in our region are SMEsand further packages of sup-port, such as the expansion offinancial support for first-timeexporters, increased rate reliefand access to finance underthe British Business Bank givethese firms cause for celeb-ration. Access to credit stillremains stubbornly difficultfor many small firms, despiteseveral interventions an-nounced since the creditcrunch, so it is too early to saywhether the latest steps to en-courage further bank lendingwill succeed.“Amajor coup for business is

that the Chancellor has com-mitted the government to afundamental review of busi-ness rates and doubled smallbusiness rates relief for a fur-ther year. This iniquitous taxis sapping good companies’strength year after year, longbefore they make a singlepenny in profits. In the lastweekwe have seen this evidentin the extremes of BlackFriday and Cyber Monday, il-lustrating the competition wesee between thehigh street andonline retailers. The businessrates system has meant thatthis hasn’t been a fair fight,with one arm of high streetretailers held back by this vin-dictive tax. Today is a step inthe right direction.“Although the business com-

munity is applauding meas-ures announced today, as wehead towards the general elec-tion there are still fundament-al barriers to growth that needto be addressed. With a verydifficult fiscal position for UKplc over the next five years, allparties will need to remainfocused on making sure eco-nomic growth is central totheir New Year manifestos.”Union leaderMrKenny, said:

“The so-called prudent Mr Os-borne will borrowmore in fiveyears at the Treasury thanLabour chancellors he labelsas profligate did in 13.“The welcome increase in

economic activity is partlylinked to population growth asGDP per head is still three percent below 2007 levels. The realvalue of take-home pay forworkers is 13 per cent belowpre-recession levels whilemany of the new jobs are pre-carious and badly paid. If thisis success, I would not like tothink what failure looks like.”John Longworth, director

general of the British Cham-bers of Commerce, said: “TheChancellor has used the lastAutumn Statement before theelection to demonstrate that heis listening to and supportingBritish businesses across theentire country. By focusing onkey business priorities, suchas Britain’s broken businessrates system and the difficultyof accessing finance forgrowth, the Chancellor hasdemonstrated that he is com-mitted to solving problemsthat hinder the growth aspir-ations of many firms.”Len McCluskey, Unite gen-

eral secretary said: ‘‘The vastmajority of people listening toGeorge Osborne talking aboutan economic recovery willthink it’s a figment of his ima-gination. This is a phoney re-covery.”John Allan, chairman of the

Federation of Small Busi-nesses, said: “The Chancellorhas listened to the needs ofbusiness.”

BY JEFF WELLSnews@westerndailypress.co.uk

Reaction to the Autumn State-ment from across the indus-trial spectrumhas beenmixed,with business leaders praisingannouncements on rates andtrade unions pointing out thatlittle was being done to tacklelow wages.Phil Smith, managing dir-

ector of Business West said:“The Chancellor has delivereda crowd pleasing AutumnStatement for business. By fo-cusing on key barriers togrowth, such as Britain’sbroken business rates systemand the difficulty of accessingfinance for growth, he hasshown a commitment to solv-ing problems that hinder thegrowth aspirations of manyfirms.”But Paul Kenny, general sec-

retary of the GMB union, said:“The so-called prudent Mr Os-borne will borrowmore in fiveyears at the Treasury thanLabour chancellors he labelsas profligate did in 13.Mr Smith said: “Prior to

today, businesses asked forhelp to deal with businessrates, infrastructure and ap-prentices, all of which wereaddressed in a positiveAutumn Statement to close outa year which saw the countryfinally emerge from a dam-aging recession.”He added: “This Autumn

Statement included many ac-

were in construction, Mr Ballstold the House, and since 2010,infrastructure output wasdown over 11 per cent.He said Labour would sup-

port what the Chancellor wasproposing on air passengerduty, but asked – following theSmithCommission proposal todevolve APD to Scotland –whether he would urgentlylead work on a mechanism toensure English airports par-ticularly in the north of Eng-land are not disadvantaged.He alsowelcomed the review

of business rates, but askedwhy the Chancellor could nottake immediate action to adoptLabour’s plan to cut the levyfor small companies and in-crease free childcare for work-ing people. And he urged himto “properly capitalise” thebusiness investment bank andraise as a proportion of earn-ings the national minimumwage.Mr Balls also claimed that

growth had been revised downin 2016, 2017 and 2018.He said: “The OBR figures...

if our economy grew by justhalf a per cent a year fasterthan forecast, government bor-rowing would come in over £32