The Chancellor has today (Thursday 17th November) announced his Autumn Statement, aiming to restore stability to the economy, protect high-quality public services and build long-term prosperity for the United Kingdom.

Please find below a top line summary of the major elements of today’s announcement. 

Fiscal Position

  • Stability, growth, and public services are the priorities in this statement.
  • High inflation is the enemy of stability. The Office for Budget Responsibility confirms global factors are the primary cause of current inflation.
  • The Bank of England has Chancellor's support to defeat inflation, and the Government will not change its remit.
  • OBR says lower interest rates generated by recent Government's U-turns are already beneficial.
  • The OBR forecast the UK's inflation rate to be 9.1 percent this year and 7.4 percent next year.
  • The UK is now in recession.
  • The UK economy is still forecast to grow by 4.2 percent.
  • GDP will fall by 1.4 percent next year.
  • Two new fiscal rules: underlying debt must fall as a percentage of GDP by the fifth year of a rolling five-year period; and public sector borrowing, over the same period, must be below 3 percent of GDP.
  • The OBR confirms that because of the statement the recession will be slower, inflation is reduced, and unemployment is lower.

 

Business, Economy and Financial Services

  • From April 2023, the rate at which people pay the additional rate of income tax, charged at 45 percent, will change from £150k to those earning over £125,140.
  • The tax-free dividend allowance will be reduced to £1,000 in 2023-24, and then to £500 in 2024-25.
  • Personal tax thresholds will be maintained at current levels for a further 2 years, until April 2028 to strengthen public finances. 
  • Tax free allowance for capital gains will reduce in 2023-24 from £12,300 to £6,000 and again to £3,000 in 2024-25.
  • Stamp Duty cuts announced in the Growth Plan will now be time-limited, ending on 31 March 2025. 
  • From 2025, road tax will be introduced for EVs, so all motorists begin to pay a fair share.  
  • The Government will invest £280m to help the Department of Work and Pensions crack down on fraud, error, and debt across the benefit system.
  • From 31 December 2023 the Government will introduce the OECD's historic global tax reforms to make sure multinational corporations – including big tech companies – pay the right tax in the countries they operate, generating over £2.3bn a year. 
  • The Energy Profits Levy is being increased from 25 percent to 35 percent and will be extended. They are also introducing a temporary 45 percent levy tax on proceeds from electricity generators. Together this will generate £55bn in tax revenue.
  • A package of £13.6bn business rates support will be provided to help businesses through the current economic climate.
  • Employment NICs threshold will be frozen until April 2028.
  • Employment allowance will be retained at higher level of £5,000.
  • To enable supply side transformation, by the end of the next year the Government will decide and announce changes to EU regulations in 5 industries: (1) life sciences (2) digital (3) financial services (4) advanced manufacturing (5) green industries.
  • The Government will remove import tariffs on over 100 goods used by UK business in production processes
  • The Government will change the approach to investment zones, which will now focus on leveraging research strengths by being centred on universities and left behind areas.
  • The Government will increase public funding for R&D to £20bn by 2024-2025 to make the UK a science superpower.
  • Solvency II decision will be published today unlock tens of billions of pounds for growth enhancing industries.
  • The Government will fund a Trade and Investment event in NI next year.
  • The government is giving local authorities in England additional flexibility in setting council tax by increasing the referendum limit for increases in council tax to 3 percent year from April 2023.

 

Devolution

  • There will be funding increases for health and education that will total £3.4bn over the next two years for devolved nations. £1.5bn for Scotland, £1.2bn for Wales and £650m for Northern Ireland.
  • Devolution deals will be concluded soon to provide directly elected mayors in Suffolk, Cornwall and "an area in the north east".
  • The Chancellor said that soon almost half of England will be covered by devolution deals.

 

Digital, Culture, Media and Sport

  • The Government would like to combine technology and science with financial services, to turn Britain into the "world's next Silicon Valley".
  • By the end of 2023, the Government will decide and announce changes to EU regulations in digital; life sciences; green industries and advanced manufacturing.
  • The Government will legislate to give the Digital Markets Unit new powers to challenge monopolies and increase the competitive pressure to innovate.
  • The Government will protect the research budget and will increase public funding for R&D to £20bn by 2024/25.
  • The Government will publish a decision on Solvency II, which will "unlock tens of billions of pounds of investment" for growth enhancing-industries.

 

Education and Skills

  • Sir Michael Barber has been appointed to advise the Chancellor and the Education Secretary on the implementation of a skills reform programme.
  • The schools budget will be increased with an additional £2.3bn per annum over next two years in schools.
  • The Government will support the Advanced Technology Research Centre in Wales
  • Using Brexit freedoms, Hunt said by the end of the next year the Government will decide and announce changes to EU regulations in their five growth industries: digital, life sciences, green industries, financial services, and advanced manufacturing. Hunt asked Chief Scientific Officer, Sir Patrick Vallance, to lead this work.
  • The Government will change their approach to investment zones which will leverage research strengths by being centred on universities in left behind areas to help build clusters for new growth industries. First decisions announced ahead of the spring budget.
  • Hunt said cutting the R&D budget would be a mistake. The UK was close to meeting the investment of 2.4 percent of GDP in R&D. the Government will protect the entire research budget and will increase public funding for R&D to £20bn by 2024-25.

 

Environment, Food and Rural Affairs

  • The Government are fully committed to the Glasgow pact, including a 68 percent reduction in UK emissions by 2030.

 

Energy and Utilities

  • There will be an increase in the Energy Profits Levy from 25 to 35 percent from 1 January to 28 March, and there will be a new temporary 45 percent levy on electricity generators from 1 January. Together these will raise £14bn next year.
  • The Government will proceed with a new nuclear power plant at Sizewell C, subject to final approvals. Contracts for the initial investment will be signed with parties including EDF in the coming weeks, creating 10,000 high skilled jobs and providing reliable low carbon power to the equivalent of six million homes for 50 years. The £700m investment is the first state backing for a nuclear project in over 30 years.
  • A new national ambition has been set to reduce energy consumption from buildings and industry by 15 percent by 2030, equivalent to a £28bn saving from our national energy bill, or £450 off the average household bill.
  • £6bn in new funding for energy efficiency will be provided from 2025, doubling existing funding in this Parliament of £6.6bn.
  • The Business and Energy Secretary will publish further details on the Government's energy independence plans and launch a new Energy Efficiency Taskforce shortly.
  • The Government will continue plans of previous government to spend £55bn to support households and businesses with their energy bills. They will continue the Energy Price Guarantee from April for a further 12 months at a higher level of £3,000 per year for the average household, equivalent to £500 support for every household.
  • The Government will introduce additional cost of living payments of £900 for households on means-tested benefits, £300 to pensioner households and £150 for individuals on disability benefits.
  • The Government will provide an additional £1bn funding to enable a further 12 month extension of the Household Support Fund to help local authorities assist the most vulnerable.
  • The Government will double support from £100 to £200 for households using alternative fuels such as heating oil or LPG, provided as soon as possible this winter.

 

Foreign Affairs, Defence and International Development

  • The Prime Minister and Chancellor recognised the need to increase defence spending, however said they will first update the Integrated Review. This will be completed before the next Budget.
  • In the meantime, defence spending will be at least 2 percent of GDP.
  • Hunt said it will not be possible to return to 0.7 percent of UK Aid spending, given the fiscal situation. The Government did however remain fully committed to this target. 0.5 percent spending would remain in the meantime, and the Chancellor looked forward to working with the International Development Minister to tackle global poverty.

 

Health and Social Care

  • DHSC and the NHS will publish an independently verified plan for the number of doctors, nurses and other professionals we'll need in 5, 10 and 15 years' time, taking account for the need for better retention and productivity improvements.
  • There will be a delay to the implementation of the Dilnot reforms for 2 years. Funding will be allocated to allow local authorities to provide more care packages.
  • For adult social care the Government will allocate an additional grant funding of £1bn next year and £1.7bn the year after. Combined with savings from the delayed Dilnot reform and council tax flexibility means there will be an increase in funding for the social care sector of £2.8bn next year and £4.7bn the year after.
  • This would mean 200,000 more care packages will be able to be delivered over the next 2 years, representing the biggest increase in care funding in history.
  • The NHS will create better efficiencies – the Government had asked former Health Secretary and Chair of the Norfolk and Waverley ICS, Patricia Hewett, to help the Government achieve this and to advise on how to make the new integrated care boards and local NHS bodies operate efficiently and with appropriate autonomy and accountability.
  • There will be an increase to the NHS budget in each of the next 2 years by £3.3bn.
  • The Government committed to the building of new infrastructure, including the new hospitals programme. It will be funded as promised with over £600bn of investment over the next five years.

 

Housing, Communities and Local Government

  • The stamp duty cut announced by Truss will carry on only until March 2025.
  • A £13.6bn package of business rates support was announced with the aim of helping businesses through this period of high bills and inflation.
  • New funding was announced for a further £6.6bn for retrofitting buildings starting from 2025.
  • Round two of the levelling up fund will "at least" match round one.
  • The Truss Government's investment zones policy will be changed to focus on skills and the powers of universities to build clusters of growth in left behind areas.
  • Social housing rent increases have been capped at 7 percent (down from 11 percent).
  • To help people with rising interest rates, homeowners on Universal Credit will be able to apply for Support for Mortgage Interest loans after 3 months instead of 9 months, including those in employment. 

 

Transport and Infrastructure

  • From 2025, electric vehicles will no longer be exempt from Vehicle Excise Duty. Company car tax rates will remain lower for EVs, and rate increases will be limited to 1 percentage point a year for 3 years, from 2025.
  • There will be no cuts from capital budgets for the next two years, they will also be maintained in cash terms for the subsequent three years.
  • Core Northern Powerhouse Rail, HS2 to Manchester, East-West Rail and gigabit broadband rollout will be funded as promised.
  • Round 2 of the Levelling Up Fund will go ahead, at least matching the £1.7bn of round 1
  • Feasibility study of the A75 will go ahead.

 

Welfare

  • Hunt said that about 70,000 jobs will be saved as result of decisions taken in the Statement.
  • Overall spending in public services will continue to rise in real terms.
  • The Prime Minister had asked the Work and Pensions Secretary to undertake a review of the issues that were holding back workforce participation. This would be early next year.
  • The Government will ask 600,000 more people already in work on Universal Credit to meet with a work coach to increase their hours or earnings.
  • There will be investment of £280m in DWP to tackle benefit fraud and error.
  • A Review on pension age will be released early 2023.
  • National Living Wage will rise to £10.42 from April 2023.
  • The pensions triple lock will be protected, and state pension will rise in line with inflation.
  • £55bn will be spent to help households and businesses with energy bills this winter
  • From April, there are plans to continue the energy price guarantee at a higher level of £3,000 a year, which will mean an average of £500 support per average household.
  • The Government announced support payments of £900 to households on means tested benefits, £300 for pensioners and £150 for people on disability payments next year.
  • £1bn of funding was announced to enable a further 12 month extension of the household support fund.
  • Energy support for those who rely on renewable energies will be doubled from £100 to £200 to be delivered asap this winter.
  • The Government will cap the increase in social rent to a minimum of 7 percent in 2023/24.
  • Working age and disability benefits will be uprated by inflation with an increase of 10.1 percent.
  • On average, a family on UC will receive £600 more next year.