Chancellor George Osborne’s Autumn Statement and Spending Review contained a number of surprises and at least one major policy U-turn.
There was good news for motorists in the form of a new clampdown on false injury claims and increased spending on road maintenance.
Would-be first-time homebuyers could benefit from yet another scheme aimed at helping them onto the property ladder.
But the biggest shock of Osborne’s speech came when he announced that the planned cuts to tax credits, originally revealed in the Conservatives’ July Budget, would be cancelled.
Elsewhere, there were details about the new State pension as well as measures aimed at cutting energy bills and reducing incentives to make buy-to-let investments.
Motorists set to gain from new accident rules
Osborne said that the government would consult in the New Year on proposals to end the practice of making cash settlements for whiplash claims.
The cost of dealing with inflated personal-injury claims is one of the main reasons motor insurance premiums have risen over the last decade and the ease with which people can get payouts for whiplash has been widely criticised.
The government wants to remove the right to claim “general” damages for soft-tissue injuries such as whiplash and ministers say more cases should be dealt with by the small-claims court.
Together these measures could save drivers between £40 and £50 a year, Osborne claimed.
£250m pothole fund
The Chancellor also heralded a new “pothole fund” which will see £250 million spent between now and 2020 on road maintenance and repair.
The state of the nation’s roads was named in a recent RAC study as the number one complaint of Britain’s drivers.
Cheaper energy bills
A reduction in the levies imposed by the government on gas and electricity companies to cover the cost of the UK’s environmental obligations could see annual fuel bills fall from 2017 by around £30 per household.
New homes and first-time buyers
Osborne said the government’s housing budget would be doubled to £2 billion a year, allowing for the construction of 400,000 new homes by 2020.
Half of these will be starter homes for first-time buyers while 135,000 will be available through a state-backed shared ownership scheme.
In London, a new variant of the Help To Buy programme will mean that buyers who can afford a 5% deposit on their property of choice may be eligible for a state-backed, interest-free loan of up to 40% of the purchase price.
Osborne said that the growth of the buy-to-let sector was a significant factor in making homes unaffordable: as such, he is raising stamp duty for buy-to-let and second-home purchases from next April.
The Chancellor confirmed that the State pension for existing pensioners – and those who reach State pension age before 6 April next year – will rise to £119.30 a week.
The new flat-rate State pension, which comes into effect on 6 April, will start at £155.65 a week.
Following months of criticism, Osborne announced that the changes to the tax-credit system unveiled in the summer Budget would no longer be going ahead.
The plans would have left hundreds of thousands of families significantly worse off.
The Chancellor said that improvements in the public finances meant the changes were no longer necessary.
But the relief is likely only to be temporary: tax credits are being gradually replaced by the new universal credit, and payments under this regime are still due to be squeezed.
Osborne also revealed increases in the health and education budgets.
Local councils will be allowed to increase council tax by up to 2% to cover the cost of spending on care for older people.
There will be extra spending to tackle homelessness, poor mental health and youth unemployment.
And the Chancellor also said there would in fact be no cuts to the police budget, as had widely been expected.