Autumn Statement 2022: Key points at a glance

Posted on: 17/11/2022

Today, Chancellor of the Exchequer, Jeremy Hunt, delivered the Government’s Autumn Statement. This statement comes at a time of significant economic challenge for the UK and global economy. During opening remarks, the chancellor says the Government will deliver a plan to tackle the cost-of-living crisis and rebuild the UK economy, with his priorities being stability, and public services

Economic Growth

The chancellor says forecasts from the Office for Budget Responsibility show the economy will grow by 4.2% this year
The chancellor noted the economy is already in recession, with higher energy prices explaining the majority of the revision in growth forecasts
GDP would then shrink by 1.4% next year, before rising by 1.3% in 2024, 2.6% in 2025 and 2.7% in 2026
The chancellor also noted that the economy grew by 7.5% in 2021, after a fall of 11% in 2020 – the biggest decline for 300 years – during the first wave of the pandemic
The chancellor says the government will focus on economic growth, despite having to find budget savings. Energy, infrastructure, and innovation will be priorities
The chancellor says he will double investment in energy efficiency of homes and industry by £6bn from 2025
The unemployment rate is expected to rise from 3.6% to 4.9% in 2024

Personal taxes and wages

UK national living wage for those over 23 will increase from £9.50 to £10.42 an hour from April 2023
The top 45% additional rate of income tax will be paid on earnings over £125,140, instead of £150,000
Income tax personal allowance and higher rate thresholds will be frozen for a further two years, this is on top of an existing four-year freeze, taking it until April 2028
Main National Insurance and inheritance tax thresholds will also be frozen for further two years, until April 2028
Tax-free allowances for dividend and capital gains tax also due to be cut next year and in 2024
The household energy price cap will be extended for one year beyond April but made less generous, with typical bills capped at £3,000 a year instead of £2,500
Local councils in England will be able to hike council tax up to 5% a year without a local vote, instead of 3% currently
State pension payments and means-tested and disability benefits to increase by 10.1%, in line with inflation
Electric vehicles will no longer be exempt from vehicle excise duty from 2025

Business taxes

Windfall taxes will raise £14bn, including a new temporary 45% levy on electricity producers
The government will soften a blow for businesses-on-business rates with an almost £14bn tax cut on business rates, this will benefit about 700,000 businesses
Employment allowance will be retained at a higher level of £5,000

Infrastructure and innovation

Capital budgets will not be cut for the next two years, the plan is to then maintain them in cash terms for the next three years. They will not grow as planned but it will still increase
There will be £600bn of infrastructure investment over the next five years
There will be more devolution deals in England to boost levelling up
The chancellor says it would be a “profound mistake” to cut the Government’s research and development budget. He says funding will be protected, with an increase to £20bn by 2024-25
Tariffs will be cut to support business supply chains
Investment zones will be kept, centred on universities in “left behind areas” to help build growth clusters, with further announcements at the spring budget

Education, health, and social care

The Treasury will increase the school’s budget, with an extra £2.3bn a year
The chancellor says he wants to free up hospital beds by investing in social care and will allocate £1bn more next year and £1.7bn a year after, funded by savings from delayed reforms
The chancellor says there will be a £3.3bn increase in NHS funding

You can access the full Autumn Statement here.

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