Autumn Statement 2023: Key announcements from chancellor at a glance

By John Mercury November 22, 2023

Here are the main announcements from Chancellor Jeremy Hunt’s autumn statement to MPs:

Chapter head from GFX

The Office for Budget Responsibility (OBR) predicts an average inflation rate of 2.8% by the end of next year and 2% by 2025.

The OBR sees “overall” UK growth in 2023 of 0.6%. Economic growth of 0.7% is expected in 2024, doubling to 1.4% in 2025.

The independent forecaster expects debt will increase as a percentage of gross domestic product (GDP), the measure of everything produced in the economy.

Borrowing will be 91.6% of GDP next year then 92.7% in the 2024 to 2025 financial year.

The minimum wage – which the government sometimes refers to as the national living wage – will rise to £11.44 per hour from April.

That’s an increase of £1.02 from the current rate of £10.42.

This rate will now apply to Britons over 21, bringing the eligible age down from 23. For anyone under 21, the minimum wage is lower – but this is also increasing, as is the lowest legal pay for apprentices.

Those aged 18 to 20 will get at least £8.60 an hour from April, which is an increase of £1.11. For those 16 and 17, and apprentices, the minimum pay will be £6.40 – a rise of £1.12 on last year.

Benefits will increase by 6.7%, the September rate of inflation, as is customary, with the increase coming into effect in April.

The chancellor announced he will increase the local housing allowance rate to the 30th percentile of local market rents, which he says will give 1.6 million households an average of £800 support next year.

Mr Hunt reaffirmed government plans to remove benefits and step up monitoring of welfare recipients in an effort to bring more people into work.

Jobseekers will have benefits such as free medicines and legal aid removed if they’re found not to be looking for work under the Back to Work Plan which aims to bring 1.1 million people back into work.

Chapter head from GFX

The headline rates of national insurance for employees are being cut by 2 percentage points, impacting about 27 million workers.

Employees earning more than £12,570 a year currently pay 12% national insurance on pay up to £50,270. That will fall to 10%.

The cut will be in effect from 6 January.

For the self-employed, the chancellor said he is making reforms to the way national insurance is paid to save around 2 million people an average of £350 per year.

He said he is abolishing Class 2 national insurance – which he says saves £192 a year – for the self-employed.

Meanwhile, Class 4 national insurance will be cut from 9% to 8% on earnings between £12,570 and £50,270.

pensions

State pension payments are to rise by 8.5% to £221.20 a week, worth almost an extra £900 a year. The triple lock will be “honoured in full”.

Work to establish a pension pot for life scheme will be begin, giving workers the option to nominate the fund their employer pays into, which can follow them as they move throughout their working life.

A further £500m will be invested over the next two years to fund further “innovation centres to help make us an AI powerhouse”, Mr Hunt said.

Moreover, a “new, simplified” tax relief for research and development will combine the existing R&D Expenditure Credit and SME schemes.

Through that merged scheme, Mr Hunt said he will also cut the rate at which loss-making companies are taxed from 25% to 19%.

The full expensing scheme – currently due to expire in 2026 – will be made permanent.

This allows firms to write off the entire cost of spending on new machinery and equipment, while also saving 25p from every pound spent on other types of investment.

The 75% discount on business rates – the tax paid on non-domestic properties – of up to £110,000 for firms in retail, hospitality and leisure will be extended for another year.

Mr Hunt claims this will save the average independent pub more than £12,800 next year.

All alcohol duty will be frozen until August. That means no increase in duty on beer, cider, wine or spirits.

other

Mr Hunt pledged to provide £7m to tackle antisemitism in schools and universities. To be repeated is a £3m uplift to Jewish organisation Community Security Trust.

In an attempt to cut the time it takes for planning applications to be granted for businesses, the chancellor said he will allow local authorities to recover the full costs of major business planning applications if they meet guaranteed faster timelines.

But if they fail, businesses will be refunded in full and have their planning application processed free of charge in what the chancellor described as a “prompt service or your money back” promise.

People living closest to new pylons and electricity substations will receive up to £10,000 off their bills over 10 years.

defence

The government will meet its NATO commitment of spending 2% of gross domestic product (GDP), the measure of everything produced in the economy, on defence.

The chancellor also said he will also extend national insurance relief for employers of eligible veterans for another year. This will provide £10m to support the Veterans’ Places, Pathways and People programme, he added.

Investment zones

Freeports and investment zones will be given 10 years of “financial incentives”, rather than five as currently planned.

There will also be a further three investment zones, Mr Hunt said, in the West Midlands, East Midlands and in Greater Manchester, while a second investment zone will also be set up in Wales.

source

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