Autumn statement 2023: key points at a glance
Jeremy Hunts announced his financial update; here are the main points.
Personal tax
Hunt says he will cut the main 12% rate of employee national insurance contributions by two percentage points to 10%.
This tax cut will be brought in from 6 January 2024, the chancellor says.
He says this will affect 28 million people, saving someone on the average salary £450.
Growth
The chancellor says forecasts from the Office for Budget Responsibility show the economy will grow by 0.6% this year and 0.7% next.
It is now 1.8% larger than it was before the Covid-19 pandemic, according to the official figures, he says.
Inflation is expected to fall to 2.8% by the end of 2024 according to the spending watchdog, down from 11.1% last year when Hunt and Sunak took office.
GDP will then grow 1.4% in 2025, and 1.9% in 2026 and 2% in 2027 and 1.7% in 2028.
In March, the OBR had forecast the economy would shrink by 0.2% in 2023, before growing by 1.8% in 2024, 2.5 % in 2025, 2.1% in 2026 and 1.9% in 2027.
Inflation
Inflation is expected to fall to 2.8% by the end of 2024 according to the spending watchdog, down from 11.1% last year when Hunt and Rishi Sunak took office.
Wages and benefits
Hunt says he is making the biggest set of welfare reforms in a decade and will get 200,000 more people into work.
People claiming benefits will face mandatory work experience if they do not find a job within 18 months.
As pre-announced, the national living wage will increase by more than a pound an hour from April to £11.44. It will also be extended to 21-year-olds.
Benefits will be increased by 6.7%, and there will be tougher requirements for those who claim them to look for work.
The state pension will be increased by 8.5%.
Hunt says he will increase the local housing allowance, which has been frozen since 2020, in a measure worth £800 for some households next year.
Borrowing
Hunt says headline debt is to be worth 94% of GDP by the end of the forecast period, lower than forecast by the OBR in March.
In cash terms, the OBR estimates the budget deficit; the gap between spending and income is 4.5% of GDP in 2023-24.
In its previous forecasts in March, the OBR had estimated borrowing would be 5.1% of GDP or £132bn in cash terms, in 2023-24.
Business tax
Hunt will make so-called “full expensing” permanent. This allows businesses to offset investment in items such as new IT equipment and factory machinery against tax.
The chancellor adds that the total package of measures will help boost business investment by about 1% of GDP.
Hunt says he wants to reform taxes paid by self-employed people, and will abolish their “class 2” national insurance contributions, which count towards their state pension entitlements. This will cut taxes for 2 million people, he says. “Class 4” contributions will be cut by one percentage point. Together these will be worth £350 a year.
There will be a business rates discount for hospitality retail and leisure worth £4.3bn.
