View all newsletters
Have the short, sharp Spear's newsletter delivered to your inbox each week
  1. Wealth
December 5, 2012

Autumn Statement Liveblog

By Spear's

Watch this space from noon for our liveblog of George Osborne’s Autumn Statement, due to be delivered today at 12.30. We will also be bringing you expert reaction and analysis afterwards

Watch this space from noon for our liveblog of George Osborne’s Autumn Statement, due to be delivered today at 12.30. We will also be bringing you expert reaction and analysis afterwards


Now read our expert reaction and analysis

Ed Balls begin: contracting economy, borrowing revised up, deficit rising (tho’ slip of the tongue there).

And another: income tax allowance to go up to £9,440. A sop to the Lib Dems – but they won’t give the Tories the boundary review changes they really want. Extended to higher-rate taxpayers too.

And the surprise is… a fuel tax giveaway: 3p petrol tax increase gone.

Popular news coming…

Bank levy to go up to 0.13%.

Content from our partners
How Flygreen is ascending into the future of private aviation
Stoneweg, Icona, and CBH Strengthen Partnership with Cromwell Acquisition, Adding €4 Billion AUM to Stoneweg
Why investors should consider investing in nature

Cut again by another 1% – 40% in US, 29% in Germany but will be 21% in UK.

Sophie: ‘Great that we’re cutting corporation tax, not that Google, Amazon, Starbucks etc. will care.’

Sophie: ‘Christopher Groves, also at Withers, described a mansion tax as ‘insanity’, both terrible for the property market and difficult to implement on a practical level. It would be unrealistic to expect it to raise any revenue before 2016, he said — so he’ll be pleased a mansion tax will not be put in place. The Lib Dems will be less so.’

Now read our expert reaction and analysis

40% rate of tax will kick in a little higher. Inheritance tax exemption up by 1% from £325,000. These seem like measures aimed at the sort of London voter the Tories find quite hard to attract.

‘Richest will pay greater share of tax revenue in this Coalition government’ than ever under Labour.

No mansion tax: ‘intrusive, expensive to levy’, subsequent chancellors would want to lower the bar.

£1.5m to £1.25m lifetime tax-free contribution for pensions, £50,000 to £40,000 annual tax-free contribution. This isn’t as swingeing a cut as had been forecast: some were predicting it would fall to £25,000. It should raise £1bn.

And, of course, we’re still all in this together, says George: the top 1 per cent need to pay too.

‘Aggressive tax avoidance’ under aggressive tax: prosecutions for tax evasion up 80%, tax take from avoidance up by £7bn. General Anti-Avoidance Rule due next year. £5bn over six years from Swiss-UK tax treaty.

Sophie Dworetzsky of Withers says that new tax avoidance measures will be ‘pointless’ given that we have a General Anti-Abuse Rule on the cards. She argues that what tax payers need most now is greater clarity.

Boo! Benefit scroungers!

Osborne is looking rather optimistic in his 80-20 spending cuts-tax raises mix, says Sophie: ‘Osborne says by 2016 he will meet his target of 80% cuts to 20% tax rises. I’m sceptical — the left of centre think tank IPPR says that the ratio is currently running at 96% cuts for 4% tax rises.’

Tory backbenchers’ favourite target: 0.7% of spending on international development. Expect the Tory papers to attack that tomorrow.

Sophie: ‘The 0.7% aid budget is interesting. We do have a duty to contribute to international aid, but the UN’s 0.7% target is, as far as I can tell, completely random. We will also be cutting aid to India by 2015, and India is home to a third of the world’s poorest people.’

Now read our expert reaction and analysis

Austerity prolonged until 2017/18. George Osborne says no alternative to more cuts except higher taxes or borrowing. Given that he trumpeted how cheap our bonds were earlier…

Sophie: ‘The deficit is coming down every year, says Osborne, triumphantly, but while we’re doing better than predicted for the next few years, we will be borrowing more in 2015 onwards than previously predicted.’


Debt won’t fall until 2016/17 to 79.2%, a tiny fall and much delayed.

Sophie says: ‘In fact, the growth rates were worse than predicted — but we’re used to that now, aren’t we? And of course we’re blaming weak growth in Europe, again. We’re recovering faster than our neighbours though, Osborne says. So we win… in the smallest way possible.’


George Osborne predicts that public sector borrowing will be £99bn 2013; £88bn 2014; £73bn 2015; £49bn 2016; £31bn 2017. Compared with earlier this summer, this is quite significantly worse.

Earlier this year in the Budget, he predicted £126bn 2011-12, £120bn 2012-13 (ex-Royal Mail), £98bn 2013-14, £75bn 2014-15, £53bn 2015-16, £21bn 2016-17. The structural deficit would be eliminated by 2016-17, two years later than originally planned, but it’s now being pushed back further.

Post Office pension transfer helps with £28bn this year but adds to the deficit in future years. Bradford & Bingley huge hit. And the profits from quantatitive easing are being added in, even if the costs are coming


George Osborne reports the OBR’s growth figures: -0.1% 2012 (OBR: ‘over-optimism from net trade’, ie eurozone crisis); tighter bank lending because of the eurozone crisis keeping economy slow for years to come.
OBR predicts growth at 1.2% 2013; 2% 2014; 2.3% 2015; 2.7% 2016; 2.8% 2017 – these are much lower than this summer’s Budget and will be seen as a disaster (upon many previous downward revisions). Budget 2012 predictions: 0.8% 2012, 2% 2013, 2.7% 2014, 3% 2015 and 2016.

He’s talking up the independence of the OBR and its forecasts, which makes it seem like he has no good news from that quarter.

Deficit fallen by a quarter, forecasts to show continuing. 1.2 million new private sector jobs. Doubled exports to emerging nations. ‘Two years ago Britain was in the danger zone – now we are one of the safe havens’ because we can borrow at low rates – which may in fact be because we have such low growth…

The Speaker has had to intervene. 12.35 QED.

First laugh: ‘The British economy is healing.’ He’s already lost command.

More on tax avoidance. Dave says low corporation tax rates help, but companies should declare their profits – transfer practices, shipping profits offshore, are wrong.

Margaret Hodge asks David Cameron about companies like Starbucks avoiding tax. Dave says public and political pressures are appropriate, but not many private client professionals would agree: why should those operating within the law be named and shamed? If the law is wrong, goes the argument, change the law. Confidentiality should not be optional.

Sophie says: ‘Cameron says he’s committed to exploring all the options to clamp down on tax avoidance — so in short, he’s not actually committing to anything today. Interesting to see what will come out in the Autumn Statement.’

Spear’s Sophie McBain, my partner in liveblogging, says: ‘Cameron says that £7bn was lost when Labour raised the top tax rate to 50p, because the wealthy avoided the tax. Tax rates are about “raising money not punishing success” he says, but many will side with Miliband when he argues that tax cuts aren’t the way to reduce tax avoidance.’

Various surprises and hat-rabbits are being discussed for George Osborne to whip out as a small sweetener. Paul Mason of Newsnight thinks it will be ‘some kind of strategic investment fund or vehicle’, meaning more tax-free investment will be allowed. By contrast, Allegra Stratton (also of Newsnight) says, tentatively, it might be ‘upping tax free allowance?’. That would please the Lib Dems.

The Guardian has some excellent charts on GDP growth, employment, debt, the deficit, etc.

Welcome to Spear’s Autumn Statement 2012 liveblog. The news is not expected, from any quarter, to be good: borrowing will be up, the deficit will be up, punitive measures on the wealthy – reducing pension contribution relief, say – will increase. The papers have been trailing Osborne’s extension of austerity until 2018; turns out you can’t spell ‘austerity’ without ‘us’…

Now read our expert reaction and analysis

Read more on previous Budgets and Autumn Statements


Don’t miss out on the best of Spear’s articles – sign up to the Spear’s weekly newsletter


Select and enter your email address The short, sharp email newsletter from Spear’s
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network