George Osborne will deliver the final Autumn Statement of this Parliament on Wednesday. The press has been working overtime to discern what might appear in it – aided at times by the PM and Chancellor. Here are five key announcements I expect to appear:
1. A £2 billion funding boost for the NHS. In a briefing published last week, The King’s Fund proposed that additional funding of around £2 billion will be required for 2015-16. The report provides a stark warning that “unless this money is found, patients will bear the cost as staff numbers are cut, waiting times rise and quality of care deteriorates”.
On Sunday, the Chancellor announced that the King’s Fund was to get its wish. This extra £2 billion downpayment has been widely welcomed by health experts, and is politically significant as it reflects an eagerness among the Conservatives to challenge Labour on the NHS – their supposed trump card for the General Election.
Yet do a bit of digging, and the announcement starts to look less impressive. The Guardian reports today that £750 million of the total will be drawn from internal health departmental savings – effectively reassigning money away from administration and onto the much-championed “NHS front line”.
2. £15 billion for road transport infrastructure. Okay, the Prime Minister did trail the information earlier this month. But it remains worth emphasising the Government’s planned “road revolution”, which will upgrade over 80 of the country’s major routes before the end of the decade. The Coalition’s decision is a response to calls from the Confederation of British Industry (CBI), and as announced today will include ambitious plans to build a tunnel underneath Stonehenge. The CBI have suggested that the plans for a tunnel, intended to help ease congestion on the busy A303, would cost about £1 billion.
Labour have dismissed the announcement as another pre-election con – “a re-announcement of long-promised, but never delivered, road improvements”, said shadow Transport Minister Michael Dugher. Significantly, it has been found that of the 65 schemes cleared to start, two-thirds are located in Conservative or Lib Dem areas, including many marginal seats. Re-launch or not, this reveals the highly political nature of announcing a road infrastructure programme less than six months before the country goes to the polls.
3. A tax break for Oil & Gas. According to reports in the BBC and The Journal, a number of business leaders have renewed calls for a North Sea tax break, in an attempt to reinvigorate an industry concerned about the effects of low oil prices on exploration and production. The move, which I expect to get ahead, has been heavily criticised by environmental campaigners, who argue that any remaining hard-to-reach hydrocarbons must stay in the sea bed.
4. Reform to pensions. In a wide range of announcements aimed at reconnecting with older voters, we can expect the Chancellor to unveil the final details of plans for National Savings & Investments, the state-owned savings bank, to sell market-beating bonds to over-65s.
The Telegraph reports that the pensioner bonds are being introduced as a concession to older savers who have seen their returns plummet as a result of low interest rates. Not all are chuffed to bits with the plans; Nationwide building society have warned the new bonds are likely to affect savings flows, and may have a knock-on effect on mortgage lending.
5. A boost to small businesses. After extensive lobbying from the British Retail Consortium (BRC), I expect the Autumn Statement to include an announcement on business rates reform. This will likely include an extension of reliefs put in place in last year’s Autumn Statement, with an additional commitment to overhaul the tax after the election.
Further still, there has been some speculation that Osborne is considering including a National Insurance Contribution (NIC) exemption for apprentices, in a bid to encourage SMEs to take on more employees aged under-21. Grant Thornton’s Autumn Statement Survey indicated there was high support amongst businesses for the move.
However, the Treasury has remained tight-lipped on any changes to NIC, bar the widely-anticipated alterations to reflect the arrival of the single tier state pension in 2016. We will have to wait till Wednesday to know for certain.