Chancellor George Osborne announced big changes in his Autumn Statement on Wednesday, the 3rd of December 2014. Perhaps the most surprising announcement was the reform of the stamp duty tax system, which is considered as the most damaging tax of all. Hereby home-buyers purchasing properties worth over £937,000 will face enormous tax costs, whilst at the other end of the spectrum, the remaining 98% of home-buyers will benefit of big savings due to the new reform. Allowing the market to become more fluid in general, Osborne’s proposals could essentially have a very positive impact not only on consumers but also the construction industry.
Moreover the chancellor talked about the general performance of the British economy, which grew by 3% in the third quarter of 2014 compared to the same quarter the previous year. Additionally the Autumn Statement revealed that the 73% employment rate is now in fact above its peak from before the recession, with a roaring 1million additional people now working. Both the expected continued rise in GDP and the further decreasing unemployment rate have led to the UK’s economy growing faster than any other economy of other G7 nations, including Germany.
However one aspect of the Autumn Statement stood out in particular – George Osborne’s focus on the Northwest. In his mission to create a Northern Powerhouse the Chancellor talks about improving, repairing and expanding roads, such as the M62 and Trans-Pennine A628, as well as plans for improved railway systems, to “boost productivity and help the local economy of the North West”. Whilst the Northern Powerhouse was clearly one of the focal points of the Autumn Statement, Greater Manchester came out as a major beneficiary of Osborne’s fight to even out the dividing gap between the North and South of the country.
It was revealed that not only will Manchester get The Factory, a new £78million theatre and arts venue in the heart of its city centre set to open in 2019, but there are further plans for the £235million institution for advanced materials at Manchester University, named after the co-founder of Rolls-Royce, Henry Royce – the Sir Henry Royce Materials Research Institute. This innovation centre will have close links to other universities in Liverpool, Leeds and Sheffield, contributing to the overall connectedness of northern cities.
The Scottish Referendum earlier on this year has definitely sparked a heavy discussion about the devolution of powers from the capital. It has been argued that a transfer of powers from the government in London to other British cities, especially in terms to the control of taxes, would lead to massive improvement for cities’ local economy and thus a greater contribution to the overall success of the UK economy. Osborne’s £1billion Manchester Devolution initiative, which will give Greater Manchester a mayor in 2017 along with complete control over decisions regarding transportation and housing, is an optimal example of what the future holds for other major UK cities. The chancellor notes that decentralisation of power and money to cities is going to play a key part in closing the gap between the North and South of the country.
As George Osborne pointed out in his Autumn Statement, the UK as a nation is continuing to recover from the financial crisis in 2008, whilst a large number of over developed countries struggle massively. In all its essence the Autumn Statement 2014 aims at rebalancing the British economy as well as creating a Northern Powerhouse through major investments into English roads and railway systems, along with investments into science, technology and culture, combined with various city- and local-growth deals, such as the Manchester Devolution.