Autumn Statement 2013 - Need to Know:

Key points

“Britain’s economic plan is working, but the job is not done,” the chancellor George Osborne said in one of the most leaked statements in history.

“Responsible” was the key word from the chancellor’s 50 minute speech.

£100m of Libor fines will be made available to military charities and to extend support in the police, fire and ambulance services.

April 2014 will see the state pension rise by £2.95 per week, meaning pensioners will be £800 better off every year.

Based on the latest life expectancy figures, it was announced that the government plans to increase the state pension age earlier than originally planned. It will be increased from 68 in the mid-2030s to 69 by the late-2040s.

The fall in GDP from peak to trough between 2008 and 2009 was not 6.3 per cent as previously thought. It was 7.2 per cent instead.

From April 2015, a new transferable tax allowance will be made available for married couples. Available to all basic rate taxpayers, it enables people to transfer £1,000 of their personal allowance to their wife, husband, or civil partner.

big numbers

0.4 per cent - The percentage the OBR predicts the eurozone will shrink by in 2014.

7.2 per cent - The revised decline in GDP in 2008-09, increased from the original 6.3 per cent originally predicted.

43 - The number months the coalition has been in charge of government.

400,000 - The number total new jobs is expected to rise by December 2014.

1.5m - The amount of jobs for young people under 21 that National Insurance contributions will be removed from.

£300m - The amount the housing revenue account borrowing limit will be increased by.

£111bn - The amount the government will borrow this year, falling in 2014-15 to £96bn, falling to £79bn in 2015-16, £51bn the year after and £23bn the year after that.

Need to know:

The statement in brief

•           From next year, the government will introduce   a new cap on total welfare spending.   However, state pension will be excluded. The   chancellor said this is “better controlled over a   longer period”.

•           In line with the move on Aim shares last year,   exchange-traded fund stamp duty will be   abolished. This is a drive to encourage funds to   locate in the UK.

•           From April 2014, the UK will be one of the   first countries to introduce a tax relief for   investment in social enterprises and new social   impact bonds.

•           The two Help to Buy schemes have already   helped many new home owners. It was   announced Aldermore and Virgin are   expected to join the scheme in December   2013.

•           The business rate relief scheme for small   businesses, which was due to end in April   2014, will be extended for a further year.   Additionally, inflation increase for all business   premises will be capped at 2 per cent from   2014.

•           KPMG’s report last week confirmed for the   second year running, Britain has the most   competitive business tax system.

•           Fuel duty will be frozen instead of going up by   2p a litre.

OBR figures

Figures from the Office of Budget Responsibility (OBR) shows:

•           It has “reassessed the depth of the great   recession”.

•           It has revised its UK growth forecast for 2013   from 0.6 per cent to 1.4 per cent. It has also   increased for 2014 from 1.8 per cent to 2.4 per   cent. For the next four years, it sees growth at   2.2 per cent, 2.6 per cent, 2.7 per cent and 2.7   per cent.

•           The OBR still forecasts the eurozone will

  shrink by 0.4 per cent this year.

...take your eye off the ball...

Sometimes we focus so hard on something we think is important, we become oblivious to significant events right under our noses. This is the idea behind The Invisible Gorilla, a book based on a series of experiments by Christopher Chabris and Daniel Simons.

The centrepiece of their work is a short film in which two teams of three people pass a basketball between them. Viewers are instructed to count the number of times the team in white passes the ball. About half the people who watch the film are concentrating so hard on the white team, they fail to notice a person in a gorilla suit enter the scene, stop to beat their chest in the middle of the screen, then stroll casually out of shot. Those who spot the gorilla are usually caught-out by more subtle experiments with similarly obvious tricks.

The experiments are among the many that begin to help us understand how investors behave and they suggest that people are easily seduced by glamorous investment stories that dominate the news. Right now, for example, all eyes are on the US and how people are reacting to public sector workers being sent home. That’s the ball-passing game people are fixed on and so pages of analysis suggest what impact it will have on the economy, the dollar, interest rates and Wall Street. Yet this focus on the ever-changing headlines is often at the expense of more important slow-burning truths – the biggest perhaps being that holding on to a well-balanced mix of investments is generally more successful than endlessly chasing the news. This is the gorilla that people miss.

Sometimes we are smart-witted creatures capable of great feats of intelligence. But other times, much of our behaviour is governed by instincts that were hard-wired into our brains tens of thousands of years ago. This means that, sometimes, we fail to spot the gorilla.

Queen's Speech: your quick guide

More consumer protection, a £144 flat-rate state pension and a cap on social care costs were among the measures outlined in today's Queen's Speech.

Under a new Consumer Rights Bill, ministers hope to give consumers greater confidence when buying products, switching suppliers or making purchases by telephone or internet.

Laws would also be updated to take account of purchases of online games, music and other content.

Also confirmed today was the introduction of the £144 flat-rate state pension.

The new Pensions Bill aims to create a simpler state pension by scrapping the two-tier system from 2016 and introducing a single tier pension scheme. The retirement age will be delayed to 67 from 2026 to fund the scheme.

The Government will also introduce a £72,000 cap on social care costs in a bid to reform the way long-term care is paid for, following recommendations outlined by the Dilnot Comissiion.

Legislation will be introduced "to ensure the elderly do not have to sell their homes to meet their care bills", the Queen said.

The is a complex piece of legislation that will involve setting up the assessment process which will decide what counts towards the total cost of a person's social care and which costs can be covered by the NHS.

The Queen's Speech sets out the government's legislative plans for the next session of Parliament.

Other measures include giving elderly and disabled relatives in England the right to receive support from their local councils, plans to continue tackling tax evasion and a Bill to provide the Government with the legal powers to compulsorily buy land needed to construct the High Speed 2 railway line.