Autumn statement 2023: Key points at a glance

The chancellor has announced his financial update, here are the main points from the autumn statement.

Personal tax

• Employee national insurance contributions are being reduced by two percentage points from 12% to 10%.
• This tax cut will be brought in from 6 January 2024.
• This will affect 28 million people, saving someone on the average salary £450.

Growth

• Forecasts from the Office for Budget Responsibility show the economy will grow by 0.6% this year and 0.7% next.
• It is now 1.8% larger than it was before the Covid-19 pandemic, according to the official figures.
• Inflation is expected to fall to 2.8% by the end of 2024 according to the spending watchdog, down from 11.1% last year when Hunt and Sunak took office.
• GDP will then grow 1.4% in 2025, and 1.9% in 2026 and 2% in 2027 and 1.7% in 2028.
• In March, the OBR had forecast the economy would shrink by 0.2% in 2023, before growing by 1.8% in 2024, 2.5 % in 2025, 2.1% in 2026 and 1.9% in 2027.

Wages and benefits

• Making the biggest set of welfare reforms in a decade and will get 200,000 more people into work.
• People claiming benefits will face mandatory work experience if they do not find a job within 18 months.
• As pre-announced, the “national living wage” will increase by more than a pound an hour from April to £11.44. It will also be extended to 21-year-olds.
• Benefits will be increased by 6.7%, and there will be tougher requirements for those who claim them to look for work.
• The state pension will be increased by 8.5%.
• Increase the local housing allowance, which has been frozen since 2020, in a measure worth £800 for some households next year.

Borrowing

• Headline debt is to be worth 94% of GDP by the end of the forecast period, lower than forecast by the OBR in March.
• In cash terms, the OBR estimates the budget deficit – the gap between spending and income – is 4.5% of GDP in 2023-24.
• In its previous forecasts in March, the OBR had estimated borrowing would be 5.1% of GDP or £132bn in cash terms, in 2023-24.

Business tax

• Making so-called “full expensing” permanent. This allows businesses to offset investment in items such as new IT equipment and factory machinery against tax.
• The chancellor adds that the total package of measures will help increase business investment by about 1% of GDP.
• Reform taxes paid by self-employed people, and will abolish their “class 2” national insurance contributions, which count towards their state pension entitlements. This will cut taxes for 2 million people, he says. “Class 4” contributions will be cut by one percentage point. Together these will be worth £350 a year.
• There will be a business rates discount for hospitality retail and leisure worth £4.3bn.

Economy

• The chancellor will invest an extra £4.5bn between 2025 and 2030 in manufacturing.
• About £1m will go to aerospace companies and businesses working on green technologies.
• Accepting recommendations from a review of foreign direct investment into the UK, carried out by former business minister Lord Harrington.
• There will be a new “investment zone” in Wrexham, Wales, in a bid to increase employment in the area. There will be three others in England: Greater Manchester, and the west and east Midlands.