A statement for the people
Tony Jadzevics, Director at Evans Weir gives his thoughts on the 2014 Autumn Statement.
This year you will notice that our autumn statement round up has come out a little later than others. The reason for this is because we wanted to spend some time going through the fine detail so we could provide you with a personal take on the chancellor’s announcement. The problem is in hindsight it appears to have been a bit short on detail!
Did someone mention an election?
Now, the cynic in me might surmise that we have an election around the corner and that this was reflected heavily in the provisions and pledges announced – and whilst I try to avoid cynicism, on this occasion I think it is the right position. Businesses don’t vote, people do and so having reflected on the statement now, I think it is fair to say there was very little in it for you if we think about your businesses.
Personally however, there were some concessions for individuals and I would summarise the benefits by saying the statement is great if you are this person:
An individual who is looking at buying or selling a house at the £250k mark, within the A27 or A303 corridors that employs carers and is planning a trip to the US with children under 12 on a plane!
- Personal allowance increased by a further £100 over previous announcements – will be £10,600 from April 2015
- The 40% higher rate threshold increases to £42,385 in April 2015
- Spouses can inherit their partners ISA and pension tax free
- ISA threshold up to £15,240 from April 2015
- Stamp duty to be calculated in a similar format to income tax with marginal rates – effective immediately
George Osborne hid in plain view the lack of progress the coalition has made in bringing down the deficit but this again was based on the fact that he was appealing to the man in the street with this statement. My point being, how many of us actually lose sleep over the deficit? I would guess the answer is very few, if any. We all know that tough times will continue for at least another parliament and we are somewhat resigned to it, so do we mind that another politician has reneged on a promise…?
Some sugar with the medicine?
Anecdotally you have been telling us that 2014 seems to be on the up and the growth forecasts presented by Mr Osborne seem to echo this. The OBR and World Bank responses to the statement further echo your individual reports that any growth at this stage is still extremely fragile and I think this may explain why there was very little either way for businesses as we all aim for stability.
- GDP growth moving towards 3%, originally forecast to be 2.4%
- UK Deficit halved since 2010
- UK Debt forecast will peak in 2015 at over 80% of GDP
- Government borrowing planned at £91.3bn dropping to £75.9bn next year
- Unemployment continues to fall, expected to level out around 5.3%
There was of course some more in depth analysis and announcements in the bits of the statement that did not make it to the media headlines and our normal annual statement reports are available to view here if you would like to know more.
With the election in May 2015 and a very uncertain outcome predicted, we can probably expect two budgets in quick succession in spring 2015 so what this statement lacked, we will make up for by having two budgets in 6 months!