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Osbourne outlines credit for SMEs in Autumn Statement

George Osbourne has announced that growth to the UK economy will be lower, and borrowing higher than forecast in the March Budget.

Commending his Autumn Statement to the House of Commons, Mr Osbourne said that OBR expectations of growth are now 0.9% for this year, down from 1.7% originally predicted in March.

To combat the sluggish growth, Mr Osbourne proposes to introduce a £40bn national loan guarantee scheme, which will extend credit to SMEs using the Government’s low borrowing rates.

Firms with a turnover under £50m will be eligible for the scheme, which aims to reduce rates by 1%.

The regional growth regeneration fund is due to get £1bn in extra funding and small businesses will also be given a rate relief holiday until April 2012.

Elsewhere, public sector pay increases will be capped at 1% for the next three years, until 2015, and the rise in the state pension to 67 will be brought forward to 2026, in order to save an estimated £59bn.

Some measures such as credit easing, youth employment initiatives and infrastructure investment had been revealed ahead of today’s speech.

Government borrowing is forecast to be £127bn between 2011-2012, and is expected to fall to £53bn by 2016.

Economic growth is expected to reach 3% by 2015.

In his speech, Mr Osbourne criticised Labour’s “something for nothing economics” and told the house that the UK population was understanding of the difficult conditions faced, particularly given the Eurozone financial crisis.

This was posted in Bdaily's Members' News section by Tom Keighley .