Autumn Statement 2023: Live Speech Highlights

The Chancellor, Jeremy Hunt, made his 2023 Autumn Statement speech at 12.30 today. Highlights of his speech follow here. Further details will be published by the government online via HMRC and Treasury channels following the speech. 

£7 million pounds announced to tackle anti-semitism with more £3m funding to deal with racism and anti-terrorism education.

Growth: no recession, 110 measures to be put in place. The Office of Budget Responsibilities (OBR) says this will raise business investment, reduce inflation, and get more people back into work.

• Plans to boost business investment by £20bn per year.
  • Skills: £50m funding to increase apprentices in engineering and other key growth sectors.
  • Planning: prompt service from local authorities for businesses on their planning applications 'or your money back'.
  • £110m for nutrient mitigation schemes to help with new house building, £450m to the local authority housing fund, a consultation of the permitted development rules to allow a house to be split into two flats.
  • Foreign direct investment: concierge service for large international investors and increased funding for the office of investment.
  • Various pension fund reforms including a consultation on giving people a legal right to have new employers pay into their existing pension pot so that they have just one pension pot.

Inflation & cost of living:

• Inflation has fallen to 4.6% from 11.1%. OBR says will fall to 2.8% by the end of 2024.
• Four new measures to help with the cost of living:
  • Increases to Universal Credit & other benefits by 6.7% from April 2024.
  • Increase in local housing allowance to help with rents: £1.6m households will get an additional £800 in support.
  • Freezing of all alcohol duty until 1 August 2024. Tobacco duty will increase 10% however.
  • Pensions triple lock honoured, from April 2024 an increase in state pension of 8.5% to £221.20 a week and £900 per year.

Debt reduction:

• Headline debt predicted by OBR to be 94% of GDP this year, 91% in 2024, and 92.8% by 2028-29. Second lowest government debt in G7. This meets debt reduction targets.
• Government borrowing to be down to 1.1% by 2028-29 which meets target of being below 3% by that date.

Defence and Support for veterans:

• We will meet our NATO commitment to spend 2% of GDP on defence.
• Extension of NI relief for employers of eligible veterans by a year.

Public sector:

• A reduction in the size of the civil service to pre-pandemic levels with increased productivity of 0.5% per year.
• Resources for HMRC to ensure everyone pays tax they owe to raise £5bn across the forecast period.

Supporting innovative industries:

• £500m over two years to fund further innovation centres.
• Creative industries: a new call for evidence on TV tax credits.
• New combined single R&D tax relief scheme. Combined tax rate for loss-making companies within the merged scheme will be 19% instead of 25%, and there will be a lowering of the threshold for the additional support for R&D-intensive loss-making SMEs to 30%, benefiting a further 5,000 SMEs.
• Funding of £4.5 billion will be made available starting in 2025-26 lasting for five years for eight manufacturing sub-sectors: £2bn for Automotive (particularly zero-emission vehicles, their batteries and supply chains), £979m for
  aerospace, £520m for life sciences and £960m for green industries growth accelerator, including carbon capture, utilisation and storage, electricity networks, hydrogen, nuclear and offshore wind.

Investment zones and freeports:

• Extension of investment zone and freeport reliefs from five years to ten years.
• Three more investment zones in West Midlands, East Midlands and Greater Manchester
• A second investment zone in Wales in Wrexham and Flintshire.

Levelling up:

• £50m for new projects.
• £80m for new levelling up in Scotland, £3m for programme in Northern Ireland.

Small businesses & self-employed:

• From April 2024 any company bidding for government contracts must demonstrate they pay their own invoices within 55 days, reducing to 30, as late payments are the scourge of small businesses.
• Business rates: freezing Small Business Multiplier for a further year and extension of 75% business rates discount for retail hospitality and leisure for another year. 
• Major reform of self-employed NICs:
  • Class 2 NICs are to be abolished altogether with access to entitlements and credits being maintained in full.
  • 1% reduction in class 4 rate from 9% to 8%.

Business investment:

• Full expensing on qualifying expenditure on plant and machinery to be made permanent. Biggest business tax cut in modern history.

Benefits and support for individuals:

• New free childcare from April as previously announced.
• Reform fit note process, work capability assessment and spend £1.34bn to help people with health conditions find jobs. Also more support for those with mental health conditions. £1.3bn funding to help long-term unemployed without sickness or disability. A new programme for mandatory work placements for those not working for 18 months with benefits to be stopped if they refuse this.
• Increase in NMW and NLW as already announced to £11.44 per hour for 23-year-olds and older.

Individual taxes:

• Cut in the main rate of employee NICs by 2% from 6 January 2024. Average salaried individuals will save over £450 per year.