Website of the UK government

The Autumn Statement provides an update on the government's plans for the economy, based on the latest forecasts from the Office for Budget Responsibility.

Due to the ongoing impact of the financial crisis, the euro area crisis and high global commodity prices, the Office for Budget Responsibility is forecasting slower growth in the UK economy.

Benefits and pensions

The basic State Pension will rise next April by £5.30 to £107.45.

The Pension Credit will rise next year by £5.35.

Working age benefits, such as Jobseeker's Allowance and Income Support, will rise by 5.2 per cent next April.

Full details of all the new benefits rates for 2012-13 will be published shortly.

Tax credits

Disability elements of tax credits and the child element of Child Tax Credit will all increase in line with inflation.

The other elements of Working Tax Credit will not be uprated next year. And the additional £110 rise in the child element, over and above the inflation increase, will no longer happen.

State Pension age

Starting in the year 2026, the State Pension age will begin to increase from 66 to 67. This will not affect anyone within 14 years of receiving their State Pension today.

• Changes to the planned increase in State Pension age

Fuel duty increase postponed

January's planned 3p per litre increase in fuel duty will be postponed until August 2012.

The second increase that was planned for next August will now not take place.

An average family will save around £144 on filling the average family car by the end of next year.

Public transport fares

Regulated rail fares across the country and fares for the buses and the tube in London will be controlled for one year from 2012. Fare rises will be limited to inflation - using the retail price index - plus one per cent.

Housing

Right to buy

Families in social housing will be able to buy their own homes at a discount of up to 50 per cent.

The receipts will be used to build a new, affordable home for every home purchased.

• Home buying schemes (home and community section)

The Youth Contract

The Chancellor announced that every young person unemployed for three months would be offered private sector work experience. This measure is expected to help some 200,000 people.

After nine months, the government will help pay for a job or apprenticeship in a private business.

Young people who don’t engage with this offer, said the Chancellor, will be considered for mandatory work activity, while those who drop out without good reason would lose their benefits.

• £1 billion package to tackle youth unemployment

Schools and nursery care

The provision of free nursery care to the most disadvantaged children would be expanded, said the Chancellor.

Children from the poorest fifth of families currently have a right to 15 hours of free nursery care a week at the age of two years old. The Chancellor announced that this number would be doubled, to 40 per cent of two-year-olds, from the most disadvantaged families.

Schools will be provided with an extra £1.2 billion in funding.

Half of this, the Chancellor said, would go to the local authorities with the greatest need for school places. The other £600 million will be used to fund 100 additional free schools, including Maths Free Schools for 16-18 year-olds.

Public sector pay

Pay awards

For some workforces, the two-year pay freeze on public sector pay will be coming to an end next spring, for most during 2013.

The government will set public sector pay awards at an average of 1 per cent for each of the two years after the pay freeze ends.

Local pay

The Chancellor also announced that he would ask the independent Pay Review Bodies to consider to consider how public sector pay can be made more responsive to local labour markets. They would report by July 2012. This will apply to all Pay Review Body workforces, with the exception of doctors, dentists, the armed forces and the judiciary.

The Minister for the Cabinet Office will review how more local, market-facing pay could be introduced in civil service departments. Secretaries of State may then choose to take forward recommendations for their departments.

The National Infrastructure Plan

Digital infrastructure

The government is funding plans to bring superfast broadband to 90 per cent of homes and businesses across the country. And mobile coverage will be extended to cover 99 per cent of families.

Physical infrastructure

The Chancellor announced that the government had identified more than 500 infrastructure projects for investment which would receive £5 billion of additional public spending over the next three years.

These include:

• 35 new road and rail schemes across England - these include electrifying the transpennine express between Manchester and Leeds
• extending the Northern Line of the London Underground to Battersea
• bringing superfast broadband to 90% of homes and businesses across the country
• a further two Enterprise Zones, in Humber and Lancashire, in addition to the 22 already announced

The Chancellor also said the government would make it easier for UK-based firms to compete for government procurement contracts, and make new applications out of government data.

For further information on the National Infrastructure Plan, see the HM Treasury website.

• National Infrastructure Plan Opens new window

Business

The package of help for business announced by the Chancellor includes:

• Corporation Tax will fall to 25 per cent in April 2012
• a business rate relief holiday for small firms until April 2013

For full details of the effect of the Autumn Statement on businesses, see the Business Link website.

• Autumn Statement 2011 - Business Link Opens new window

Technical content

• Full Autumn Statement (PDF, 3MB) Opens new window

• Download the Autumn Statement speech (PDF, 104K)

• Office for Budget Responsibility Opens new window

Further information

• Autumn Statement on Business Link Opens new window

• Autumn Statement - Treasury website Opens new window