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Hunt sets out plan to boost economy and cut taxes

22 Nov 2023 4 minute read
Chancellor of the Exchequer Jeremy Hunt leaves 11 Downing Street, London, for the House of Commons to deliver his autumn statement. Photo Stefan Rousseau/PA Wire

Jeremy Hunt cut national insurance for 27 million people in a highly political autumn statement ahead of a general election expected next year.

The two percentage point reduction in the main rate will save someone earning £35,000 more than £450.

The Chancellor also confirmed that a tax break allowing firms to cut their tax bills if the invest in new equipment will be made permanent in what he claimed was the “biggest business tax cut in modern history”.

He said his plan will “raise business investment, get more people into work, reduce inflation” and increase the size of the economy.

Growth forecast

The Office for Budget Responsibility (OBR) has upgraded its growth forecast for gross domestic product – a measure of the size of the economy – this year, but downgraded the figure for subsequent years.

The budget watchdog’s forecast in March was for the economy to shrink by 0.2% in 2023, but that has now been revised up to 0.6%.

But in 2024 growth is forecast to be 0.7% rather than the 1.8% expected at the time of the Budget, 2025 is expected to see 1.4% rather than 2.5% and 2026 could be 1.9% instead of 2.1%.

Growth is then expected to go beyond the previous forecast, with 2% in 2027, slightly above the 1.9% predicted in March, with 1.7% in 2028.

Mr Hunt said universal credit and other benefits will increase by 6.7%, in line with September’s inflation figure, ending speculation the Government could have used the cheaper October figure.

Mr Hunt also confirmed the triple-lock formula for state pension rises would be implemented as usual, meaning the state pension will rise by 8.5% in line with average earnings, worth up to £900 more a year.

Welfare

But he confirmed plans for a tougher welfare regime, saying it was “wrong economically and wrong morally” that every year more than 100,000 people were signed onto benefits with no requirement to look for work because of sickness or disability.

The Chancellor said: “We will reform the fit note process so that treatment rather than time off work becomes the default.

“We will reform the work capability assessment to reflect greater flexibility and availability of home working after the pandemic. And we will spend £1.3 billion over the next five years to help nearly 700,000 people with health conditions find jobs.”

Mr Hunt said the OBR projected these reforms will “more than halve the net flow of people who are signed off work with no work search requirements”.

There will also be £1.3 billion of funding to offer “extra help” to 300,000 people who have been unemployed for more than a year.

He said: “After a global pandemic and energy crisis, we have taken difficult decisions to put our economy back on track.

“We have supported families with rising bills, cut borrowing and halved inflation.

“Rather than a recession, the economy has grown. Rather than falling as predicted, real incomes have risen.

“Our plan for the British economy is working. But the work is not done.”

In other announcements, Mr Hunt:

– Promised £7 million over three years for organisations to tackle antisemitism.

– Said national debt was forecast by the Office for Budget Responsibility to be lower than previously expected in every year of the forecast through to 2028-29.

– Cut national insurance by an average £350 a year for around two million self-employed people.

– Committed to explore options for a NatWest retail share offer in the next 12 months, potentially offering investors the chance to buy some of the Government’s stake in the bank.

– Froze alcohol duties until August 2024.

– Extended 75% business rates relief for retail, hospitality and leisure until 2025.


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Jeff
Jeff
3 months ago

Early next year GE then? before the realty hits and the Freeport’s get a mention, we really need to stop that when Labour get in.
Pity the speaker cannot keep up and remind the chancellor that swinging the lead is frowned upon. But then all he does is threaten them with an early cup of tea.

Anyone spot the problem that the mess we are in is due to the conservative and just before an election they dangle small crumbs. Still, Hunt is OK, raised the rent by 18% on properties he owns.

karl
karl
3 months ago

Given the struggles of our NHS and the increase in the age we qualify for our state pensions, stupid move. We need investment, because whatever this saving is, it will be clawed back by further hike in pension age and a model in our NHS that brings in costs upfront.

Sarah Good
Sarah Good
3 months ago

More overblown promises from the worst government ever

hdavies15
hdavies15
3 months ago

Tells me that the Government has given up so it throws a few crumbs to us who are at work or existing on a state pension ( some state that is ) thinking that we’ll see some kind of new light and let Rishi’s sterile yet toxic regime back in for another 5 !! Who’s he effin’ kiddin’ ?

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