The Chancellor of the Exchequer, Jeremy Hunt, delivered his Autumn 2023 Statement in the House of Commons this afternoon. If you found the announcement too much to digest, we’ve put together all of the key information below.
The Chancellor began by saying there will be 110 measures in total, all of which are designed to "help grow the economy".
According to the Office for Budget Responsibility (OBR), headline inflation will fall to 2.8% by the end of 2024, before falling to the 2% target in 2025. Meanwhile, the latest figure for consumer price inflation is 4.6% for October, which is down from a peak of over 11%.
Benefits will increase next year by 6.7%, which is the inflation rate for September. This applies to working-age benefits and means-tested benefits, such as Universal Credit and disability benefits.
Local Housing Allowance rate to rise
The Chancellor pointed out that rent can constitute more than half the living costs of private renters on the lowest incomes, which is why he will increase the Local Housing Allowance rate to the 30th percentile of local market rents. This will give 1.6 million households an average of £800 of support next year. (The Local Housing Allowance helps people on benefits to pay their rent to a private landlord. It has been frozen since 2020 despite rents rising sharply but the freeze has now been lifted.)
Jeremy Hunt is increasing the duty on hand-rolling tobacco by an additional 10% above the tobacco duty escalator. Meanwhile, all alcohol duty (beer, cider, wine and spirits) is being frozen until 1st August 2024.
The Chancellor said he will honour the Government's commitment to the pensions triple lock in full. From April 2024, the government will increase the full new state pension by 8.5% to £221.20 a week, worth up to £900 more a year.
Following the Hamas attack on Israel and the subsequent war in Gaza, the Chancellor announced that up to £7m in the next three years will go to organisations like the Holocaust Education Trust, to tackle antisemitism in schools and universities.
Jeremy Hunt announced that the UK economy is set to grow by 0.6% in the current year, according to forecasts from the OBR. The Government then expects the economy to grow by 0.7% next year. For 2025, GDP is forecast to rise by 1.4%, then 1.9% in 2026, and 2.0% in 2027. While these figures are positive, they are lower than the original forecasts for 2024-25.
Hunt announced £50m in funding over the next two years to increase the number of apprentices in engineering and other key growth sectors.
The Government is making a commitment to reforming the planning system to allow for faster applications. Jeremy Hunt said he will allow local authorities to recover the full costs of major business planning applications in return for being required to meet guaranteed shorter timelines. If they fail, these fees will be refunded automatically, with the application being processed free of charge.
The Chancellor confirmed a plan to reform the time it takes for clean energy businesses to access the electricity grid. These measures will cut grid access delays by 90% and offer up to £10,000 off electricity bills over 10 years for those living closest to new transmission infrastructure.
The Chancellor said he will consult on giving pension savers a legal right to require a new employer to pay pension contributions into their existing pension. He added that these reforms could help to unlock an extra £1,000 a year in retirement for an average earner saving from the age of eighteen.
"Strategic manufacturing" is another focus area for the Chancellor, as he said there will be an additional £4.5bn of support between 2025 and 2030. This includes £975m for aerospace firms, £520m for life sciences such as medical research companies, and 960m for the new green industry firms.
The Chancellor plans to extend financial incentives for Investment Zones and tax reliefs for Freeports from five to ten years. He also said he will set up a new £150m Investment Opportunity Fund for the programme.
The Chancellor said that the Government will abolish Class 2 National Insurance altogether, which will save the average self-employed person £192 a year.
Jeremy Hunt announced the decision to make “full expensing” permanent for businesses. This means that for every £1 that a business invests in IT, machinery and equipment, they can claim back 25p in corporation tax. Also, companies can do this in one go as opposed to having to offset the cost against corporation tax over a longer period.
The Government will freeze the small business multiplier for a further year. Jeremy Hunt added that he will also extend the 75% discount on business rates up to a £110,000 discount for retail hospitality and leisure businesses for another year. According to the Chancellor, these measures will save the average independent shop over £20,000 and the average independent pub over £12,800 next year.
The Chancellor also followed through with his previous announcements of a clampdown on benefits. If a claimant has still not found employment after seeking a job for 18 months, they will have to take part in a mandatory work placement to increase their skills and improve their employability. If they choose not to engage with the work search process for six months, their benefits will be stopped.
Employee National insurance will be cut by two percentage points from 12% to 10% from 6th January 2024.
The minimum wage (which is known officially as the National Living Wage) will rise from £10.42 to £11.44 per hour in April 2024. This is a rise of 9.8% and worth up to £1,800 a year for a full-time worker. The higher wage will also be paid to 21- and 22-year-olds for the first time.
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