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Autumn Statement 2023

Autumn Statement 2023

Top Announcements from Chancellor

Here are the main points outlined by Jeremy Hunt as part of his package aiming to grow the UK economy with 110 growth measures, including business tax cuts. A lot of detail has been edited out to keep this to salient points.

  • 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.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.
  • 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.
  • 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.
  • 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.
  • 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.
  • Business capital spending: 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.
  • All alcohol duty will be frozen until August. That means no increase in duty on beer, cider, wine or spirits.
  • People living closest to new pylons and electricity substations will receive up to £10,000 off their bills over 10 years.
  • 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 Sky News