This week the Chancellor of the Exchequer, Jeremy Hunt, delivered the Autumn Statement.
The annual Autumn Statement is an opportunity for the government to provide the House of Commons with an update on the state of the economy, whilst also announcing any tax and spending decisions. Thanks to the progress the government has made on the priorities to halve inflation, grow the economy and reduce debt, this Autumn Statement saw a shift in focus towards the long-term decisions required to strengthen the economy. This was an Autumn Statement for Growth, with a focus on reducing debt, cutting tax, backing businesses and rewarding hard work.
This year’s Statement was a particularly significant one, with the Chancellor announcing the biggest package of tax cuts since the 1980s. In a further boost for hardworking people, the National Living Wage will rise to a record level of £11.44 an hour. That is a 9.8% increase, which will benefit 2.7 million workers. Since the introduction has been introduced, those in full-time work will be over £5,000 per year better off.
The Chancellor announced that taxes would be cut for 27 million working people from January by cutting the main rate of National Insurance Contributions from 12% to 10%, providing on average a £450 tax cut per worker.
In addition, taxes will be both simplified and cut for 2 million self-employed people. We will see the abolishment of an entire class of National Insurance contributions (NICs) and the NICs top rate will be cut from 9% to 8%, worth on average £350.
As we continue to build on record employment figures, I very much welcomed the £50 million boost to apprenticeships. There is also assistance for those who are out of work as they will benefit from the government’s plans to reform welfare, with an additional £3.5bn to improve support for those seeking work. We will though also toughen up work requirements. Those out of work for 18 months will be offered a mandatory work placement to increase their skills.
There will also be further help for the most vulnerable households, who will see an average income boost of £800. 1.6 million of the families will have their Local Housing Allowance increased. Moreover, working age benefits will increase by 6.7 per cent – an average £470 a year boost in the benefit payments of around 5.5 million households who receive Universal Credit. Pensioners will also see their pensions boosted by 8.5 per cent, in line with the government’s Triple Lock. The basic State Pension will now be £3,750 higher than in 2010.
Business taxes will be cut by £11 billion, which is the biggest business tax cut in modern British history, as we seek to boost investment and recruitment. Business Rates will also be cut, with the small business multiplier being frozen once again. This will mean that the average shop will save £1,650. In addition, Business Rate Relief is to be extended and will save the average independent shop £20,000 a year and the average pub £12,800 a year. The government will also alleviate pressure on the hospitality sector by once again freezing alcohol duty.
The actions outlined in this Autumn Statement are further steps towards tackling the long-term economic challenges facing our country, helping us build a more dynamic economy that delivers prosperity across the country.
