Nov 2023
The Chancellor Jeremy Hunt has delivered his highly anticipated Autumn Statement speech, setting out spending plans for the year ahead. As the cost of living crisis continues to take hold, many households were wondering how their budgets would be affected by the Chancellor’s measures.
Here is a summary of what the Autumn Statement contained.
Economy and public finances
The independent Office for Budget Responsibility (OBR) expects the economy to grow by 0.6% this year. Next year, it is expected to grow 0.7% and then rise to 1.4% in 2025; then 1.9% in 2026; 2% in 2027 and 1.7% in 2028.
It forecasts that headline inflation - the rate prices are rising - will fall to 2.8% by the end of 2024 and to the Bank of England's 2% target rate in 2025.
Underlying debt forecast to be 91.6% of GDP next year; 92.7% in 2024-25; 93.2% in 2026-27; before declining to 92.8% in 2028-29.
Borrowing forecast to fall from 4.5% of GDP in 2023-24; to 3% in 2024-25; 2.7% in 2025-26; 2.3% in 2026-27; 1.6% in 2027-28 and 1.1% in 2028-29.
Taxation and wages:
Minimum wage will rise to £11.44 per hour and the main rate of National Insurance will be cut from 12% to 10% from 6th January 2024.
For the self-employed, Class 2 National Insurance will be abolished from April 2024 and Class 4 National Insurance – paid on profits between £12,750 and £50,270 will be cut from 9% to 8% in April.
Benefits and pensions
Universal Credit and other working-age benefits will increase by 6.7% from April, in line with September's inflation rate.
There will be funding of £1.3bn over the next five years to help people with health conditions find jobs and a further £1.3bn to help people who have been unemployed for over a year.
Claimants deemed able to work but refuse to seek employment to lose access to their benefits and extras like free prescriptions.
State pension payments to increase by 8.5% from April, in line with average earnings.
Business and infrastructure
A tax break called the “full expensing” tax break that allows businesses to deduct spending on new machinery and equipment from profits, has been made permanent from its previously temporary measure.
The 75% business rates discount for retail, hospitality and leisure firms has been extended for a further 12 months.
Households living close to new pylons and transmission infrastructure to get up to £1,000 a year off energy bills for a decade.
Funding of £4.5bn to attract investment to strategic manufacturing sectors, including green energy, aerospace, life sciences and zero-emission vehicles.
Other measures
- All alcohol duty frozen until 1 August next year
- Duty rate on tobacco products increases by 2% above RPI inflation; hand-rolling tobacco rise 12% above RPI
- Up to £7m over next three years for organisations like the Holocaust Educational Trust to tackle antisemitism in schools and universities
- Funding of £5m for Imperial College and Imperial College Healthcare NHS Trust to set up Fleming Centre to work on health innovations
