· 2010/11: total public spending will increase by 2.2% in real terms.
· 2011 onward: 0.8% annual spending growth – means real cuts to a number of budgets.
· Protected: frontline services education, health and policing; international aid.
· Capital investment will fall from £49.5bn in 2009/10 to £22bn in 2013/14.
· Previously-announced work on Crossrail, Thameslink, M1, Great Western Mainline to continue. Manchester-Liverpool-Preston rail lines to be electrified. Midland Mainline electrification to receive further consideration.
· Government announcements on High Speed Rail expected during 2010.
· 4.75% contraction in UK economy during 2009. Return to growth in Q4 2009. 2010 forecast growth 1.0%-1.5%. 2011: 3.5% growth forecast. BCC: 2011 number overly optimistic.
· Inflation forecast to rise from 1.5% to 3% before falling back in 2011
· Borrowing to be ‘more than halved’ by 2013/14 – Gov’t argues earlier cuts would put recovery at risk.
· Asset sales to be used to fund investment.
· Gov’t borrowing: £178bn in 2009/10; £176bn in 2010/11; £140bn 2011/12; £117bn 2012/13; £96bn 2013/14
· Forecast net debt as a percentage of GDP will peak at 78%
· One-off bank payroll tax on bonuses – 50% on any individual discretionary bonus above £25,000 with immediate effect.
· £10bn loss for bank interventions forecast
· Young people: move up job/training guarantee for 18-24s from 12 months to 6 months
· Government guarantee that people will be better off in work than on benefits
· Short-term business internship scheme – details to be announced.
|Public Sector Pay|
· 2011/12 and 2012/13: 1% cap on all public sector pay settlements.
· Public sector pensions contributions will be capped by 2012/13; greater contributions from high-earning public-sector workers.
· BCC view: needs to happen earlier
|Enterprise Finance Guarantee||· Extended for another 12 months, with an additional £500m in bank loans guaranteed. BCC POLICY WIN.|
· Enhanced capital allowances will end in April 2010, as originally planned.
· No increase to Annual Investment Allowance, which remains at £50,000
· BCC SAYS: MISSED OPPORTUNITY TO PROMOTE INVESTMENT
|HMRC ‘Time to Pay’||· Extended ‘for as long as it is needed’|
|SME Equity Finance||· Growth Capital Fund for equity investments in SMEs requiring £2m to £10m – details to be available soon. BCC POLICY WIN.|
|Trade Credit Insurance|
· Domestic trade credit insurance scheme closing to new customers from December 2009
· No announcement on export credit insurance
|Capital for Enterprise Fund||· Will close to new applicants as planned in March 2010|
|Manufacturing||· £30m to help industry on Teesside following Corus closure announcements|
|Income Tax||· No substantive changes for 2010.|
|VAT||· Returns to 17.5% from 1st January 2010. No other changes.|
|National Insurance Contributions||· Additional 0.5% increase in all NIC rates (employee, employer and self-employed) from April 2011 – meaning 1% overall increase for employers in April 2011. MAJOR ISSUE FOR BUSINESS.|
|Corporation Tax||· 1p rise in small business rate has been deferred. SME rate remains at 21%. BCC POLICY WIN.|
|Business Rates||· Exemption for small businesses with rateable values extended to April 2011. Threshold rises from £15,000 to £18,000 to take 2010 revaluation into account. BCC POLICY WIN.|
· UK Innovation Investment Fund increased to £325m. Hermes Private Equity to manage.
· From April 2013, a new 10p corporation tax on income stemming from patents obtained in the UK – so-called “Patent Box”
· Strategic Investment Fund – to grow by £200m
· Expansion of the R+D tax credit – removal of IP restrictions
|Mortgage interest support scheme||· Extended for a further six months|
|Stamp Duty||· Holiday for properties under £1750,000 ends 31st December 2009.|
|Inheritance Tax||· Freeze individual allowance at £325,000 for 2010|
· Personal accounts roll-out to be phased in – beginning in October 2012, but only 1% employer payment until 2015, going up to 2% in 2016 and 3% in 2017. Similar arrangements will apply for employees.
· New businesses starting up between 2012 and 2015 will not have to pay until after 2015.
· State pension – 2.5% increase in 2010
· Tax reliefs reduced for people with incomes over £150,000
· Electric vehicles to be exempt from vehicle excise duty
· 100% first-year capital allowances for electric vans
· Policy Through Procurement Actin Plan due later in December 2009
· Commitment to publish Government spend with SMEs in Summer 2010
|Taxes to support Broadband||· 50p landline tax for universal broadband service to go ahead in 2010 Finance Bill|
|Regeneration / Tax Increment Financing|
· Further consideration – but no concrete measures.
· Further consultation expected on implementation of Community Infrastructure Levy for local infrastructure