Live: Chancellor Jeremy Hunt delivers tax-cutting autumn statement

The Chancellor used the statement to reduce headline rates of national insurance, commit to the pensions triple lock and make permanent a £10 billion-a-year tax break for companies that invest in new machinery and equipment.

2.10pm

We’re now closing our live coverage of the 2023 autumn statement. Thank you for reading.

2.09pm

The tax burden is still set to reach a post-Second World War high of 38% of gross domestic product, the Office for Budget Responsibility said.

“While personal and business tax cuts reduce the tax burden by half a percentage point, it still rises in each of the next five years to a post-war high of 38% of GDP,” the OBR said.

2.05pm

Shadow chancellor Rachel Reeves described plans to make full expensing permanent as another thing that Labour “have been calling for”.

She added: “That doesn’t make up for the years of uncertainty that businesses have faced with taxes going up and down like a yo-yo, with small and medium businesses who play such a pivotal role in growing our economy left exposed to the Tories’ economic volatility.”

She welcomed the rise in the national living wage to £11.44 an hour, but added: “The reality is – of the Conservatives’ record – that average wages for working people have been held back.

“Under this Government real average weekly wages have increased by just 3% in 13 years, compared to a 27% increase under the last Labour government, worth an additional £120 more every week for someone going out to work every day.”

2.02pm

Living standards, as measured by real household disposable income per person, are forecast to be 3.5% lower in 2024/25 than before the Covid-19 pandemic, according to the Office for Budget Responsibility.

This represents “the largest reduction in real living standards since records began in the 1950s”.

Disposable income per person is forecast to return to its pre-pandemic level in 2027/28.

2pm

Ms Reeves said the Government had not gone far enough with its pension reforms.

The shadow Chancellor told the Commons Labour had led “the agenda on growth”, adding: “Today we see the Conservatives have released their own poor cover version of what we have already announced.

“The Chancellor today is talking about unlocking capital by reforming pensions, but Labour would go further, encouraging investment into British start-up firms and scale-up firms, and introducing measures to ensure the consolidation of pension funds so that our pension system gets better returns for savers and for the UK economy.”

She also hit out at Jeremy Hunt’s announcements on planning reform, telling the Commons: “On planning, the Conservatives are following Labour’s lead on providing money off bills for communities that host grid infrastructure and speeding up planning decisions. What has taken them so long?”

She also criticised the Government’s record on investment in public services, claiming voters would not trust them to “fix” the problems faced by the NHS and other services.

Ms Reeves said: “It says it all that after 13 years of Tory Government there are still nearly 12,000 NHS computers running on outdated software that is vulnerable to cyber attacks.”

1.56pm

Ms Reeves asked Jeremy Hunt if cutting inheritance tax was a “decision delayed or a decision abandoned”, before telling the Commons: “This autumn statement for growth is now the 11th Conservative economic growth plan from the fifth prime minister, the seventh chancellor and the ninth business secretary.

“And what do those numbers add up to? According to the most recent GDP data, a big fat zero. That’s zero growth in the most recent data in the third quarter of this year.”

Ms Reeves said the UK is “more world-following than world-beating” on economic growth under the Conservatives.

1.52pm

Jeremy Hunt may struggle to meet his target of reducing debt over the next five years if he keeps fuel duty frozen, the Office for Budget Responsibility (OBR) has said.

In its forecasts published alongside the Chancellor’s autumn statement, the OBR said holding fuel duty at its current level – as chancellors have done since 2011 – would mean “debt would no longer be falling in 2027-28” and remove 43% of Mr Hunt’s “headroom” in 2028-29.

1.48pm

Taxes will be higher at the next election than they were at the last, Ms Reeves has said.

She told the Commons that she has “long argued that taxes on working people are too high”.

She said: “From their failure to uprate income tax or national insurance bands, to forcing councils to raise council tax, the Conservatives have pushed the costs of their failure onto others.

“But the British people won’t be taken for fools. They know that what has been announced today owes more to the cynicism of a party desperate to cling onto power than the real priorities of this high-tax, low-growth Conservative Government.

“So I think we can forgive taxpayers for not celebrating when they see the truth behind today’s announcements. Going into this statement the Government had already put in place tax increases worth the equivalent of a 10p increase in national insurance.

“So today’s 2p cut will not remotely compensate for the tax (increases) already put in place by this Conservative Government. The fact is that taxes will be higher at the next election than they were at the last.”

1.46pm

Tax changes announced by Mr Hunt reduce the tax burden in the UK by 0.7% of GDP, but it is still forecast to rise in every year to reach a post-war high of 37.7% of GDP by 2028/29, according to the Office for Budget Responsibility (OBR).

Rises in income tax “explain most of the increase in this forecast, rising from 10.2% of GDP this year to 11.3% in 2028/29, driven by threshold freezes and strong nominal earnings growth,” the OBR said in its economic and fiscal outlook.

By 2028/29, frozen thresholds will result in “nearly four million additional workers paying income tax, three million more moved to the higher rate, and 400,000 more paying the additional rate”.

1.44pm

The Prime Minister is “arguing against himself” on national insurance, Ms Reeves told the Commons.

Addressing the cut in the headline rate of national insurance, she said: “I’m old enough to remember when the Prime Minister wanted to put up national insurance.

“As recently as January last year, he said and I quote, ‘we must go ahead with the increase in the health and care levy, it is progressive in that the burden falls most on those who can most afford it’.

“Utter nonsense. It was a tax on working people and we opposed it for that very reason.

“Yet again, the Prime Minister is left arguing against himself.”

1.41pm

Working people are “worse off” despite the Government’s promises, shadow chancellor Rachel Reeves told the Commons.

After describing the “damage” caused by the Conservatives, she said: “Nothing that has been announced today will remotely compensate.

“Mortgages rising, taxing eating into wages. Inflation high, with prices still going up in the shops. Public services on their knees. And too many families struggling to make ends meet.

“As the sun begins to set on this divided, out-of-touch, weak Government, the only conclusion that the British people will reach is this: after 13 years of Conservatives the economy is simply not working, and despite all the promises today, working people are still worse off.”

1.40pm

Concluding the autumn statement, Mr Hunt said the UK could become Europe’s “most prosperous” economy.

The Chancellor added: “In the face of global challenges, we have halved inflation, reduced our debt and grown our economy.

“As a country we are sticking to a plan that is working. This autumn statement for growth will attract £20bn more business investment a year in the next decade, bring tens of thousands more people into work, and support our fastest growing industries.

“In a package which leaves borrowing lower, debt lower, and keeps inflation falling, we are delivering the biggest business tax cut in modern British history, the largest-ever cut to employee and self-employed national insurance, and the biggest package of tax cuts to be implemented since the 1980s.”

1.39pm

Chancellor Jeremy Hunt said the Government will accept the Low Pay Commission recommendation to increase the national living wage by 9.8% to £11.44 an hour, saying: “That is the largest ever cash increase in the national living wage, worth up to £1,800 for a full-time worker.

“Since the national living wage has been introduced, the proportion of people on low pay, defined as earning less than two thirds of national median hourly income, has halved.

“But at the new rate of £11.44 an hour it delivers our manifesto commitment to eliminate low pay altogether.

“That means by next year someone working full-time on the national living wage will see their real take-home after-tax pay go up not by 25% but by 30% compared to 2010.”

1.37pm

Shadow chancellor Rachel Reeves said that growth had “hit a dead end” under the Tories, adding Jeremy Hunt’s autumn statement had “lifted the lid on 13 years of Conservative failure”.

1.36pm

The pound has fallen against the euro as Chancellor Jeremy Hunt delivered the Government’s autumn statement in the House of Commons.

Sterling dipped from highs of about 1.15 euros shortly before the statement was delivered, to about 1.148 after.

The pound was also down slightly against the US dollar, from 1.255 dollars before the announcement, to 1.2525 after.

1.35pm

The Chancellor said he would cut the main rate of national insurance for workers from 12% to 10% as of January, telling MPs this change would “help 27 million” by putting extra money in their payslips.

Jeremy Hunt told the Commons he would bring forward urgent legislation to Parliament to introduce the cut in national insurance for employees “from January 6, so that people can see the benefit in their payslips at the start of the new year”.

He added: “It means someone on the average salary of £35,000 will save over £450. For the average nurse, it is a saving of over £520 and for the typical police officer it is a saving of over £630 every single year.”

1.35pm

Chancellor Jeremy Hunt said the Government will “ask for something in return” when providing a further £1.3 billion of funding to help 300,000 people who have been unemployed for more than a year.

He said: “If after 18 months of intensive support jobseekers have not found a job, we will roll out a programme requiring them to take part in a mandatory work placement to increase their skills and improve their employability.

“And if they choose not to engage with the work search process for six months, we will close their case and stop their benefits.

“Taken together with the labour supply measures I announced in the spring, the OBR says we will increase the number of people in work by around 200,000 at the end of the forecast period, permanently increasing the size of the economy.

“I know some on the benches opposite would prefer to fill those vacancies in a different way. They hanker after a more liberal immigration regime or even dream of bringing back free movement.

“But Conservatives say we should unlock the potential we have right here at home, which we do with the biggest set of welfare reforms in a decade in today’s autumn statement for growth.”

1.34pm

“Urgent” legislation will be used to introduce the national insurance cut from January 6, Jeremy Hunt said.

1.32pm

The Chancellor confirmed he would make full expensing permanent, describing it as the “largest business tax cut in modern British history”.

Jeremy Hunt told the Commons: “It means we have not just the lowest headline corporation tax rate in the G7 but its most generous capital allowances.”

He said the reform had been estimated to cost £11 billion a year, and stressed he had only brought it forward now it was “affordable”.

Mr Hunt claimed the tax change was “a huge boost to British competitiveness”, having told MPs: “The OBR say it will increase annual investment by around £3 billion a year and a total of £14 billion over the forecast period. We on this side of the House know that the way to back British business is not to borrow more or subsidise more but increase the incentives to invest.”

The Chancellor went on to claim that measures throughout the autumn statement taken together would help to “increase business investment in the UK economy by around £20bn a year within a decade”.

1.32pm

The Chancellor said he would cut the main rate of national insurance for workers from 12% to 10% as of January

1.24pm

The Chancellor pledged not to “take risks with inflation”.

1.21pm

Mr Hunt also announced changes designed to help self-employed workers, hailing them as the people who “kept our country running during the pandemic”.

Mr Hunt said: “Class 2 national insurance is a flat rate compulsory charge, currently £3.45 a week, paid by self-employed people earning more than £12,570 which gives state pension entitlement.

“Today, after careful consideration and in recognition of the contribution made by self-employed people to our country, I can announce we are abolishing class 2 national insurance altogether, saving the average self-employed person £192 a year.

“Access to entitlements and credits will be maintained in full and those who choose to pay voluntarily will still be able to do so.”

Mr Hunt also turned to class 4 national insurance paid at 9% on all earnings between £12,570 and £50,270.

Mr Hunt said: “I have decided to cut that tax by one percentage point to 8% from April. Taken together with the abolition of the compulsory class 2 charge, these reforms will save around two million self-employed people an average of £350 a year from April.”

1.20pm

Mr Hunt said that from April 2024 the Government will introduce a condition that any company bidding for large government contracts should demonstrate they pay their own invoices within an average of 55 days, which will reduce “progressively” to 30 days.

Mr Hunt said he also decided to freeze the small business multiplier for a further year, adding: “I have also decided to extend the 75% business rates discount for retail, hospitality and leisure businesses for another year too.

“This will save the average independent pub over £12,800 next year and at a cost of £4.3 billion, it is a large tax cut which recognises the role of pubs and high street shops in our communities.”

1.19pm

Some two million self-employed people will benefit from the axing of class 2 national insurance and a cut to class 4 national insurance to 8%, saving them around £350 a year, Mr Hunt said.

1.18pm

The “full expensing” scheme for businesses introduced in March will become permanent, the Chancellor confirmed, calling it the “largest business tax cut in modern British history”.

1.15pm

Freeports and investment zones will be given 10 years of “financial incentives” rather than five as previously planned, the Chancellor said.

Jeremy Hunt said: “Following tenacious representations by the Member for Ynys Mon (Virginia Crosbie) and the unstoppable Mayor of Tees Valley (Ben Houchen), I have today decided to extend the financial incentives for investment zones and tax reliefs for freeports from five years to 10 years. I will also set up a new £150 million investment opportunity fund to catalyse investment into the programme.”

The Chancellor also announced there would be a further three investment zones in the West Midlands, East Midlands and in Greater Manchester, which would “help catalyse over £3.4 billion of private investment and 65,000 new jobs”.

He said a new investment zone would be based in Wales, “in the fantastic region of Wrexham and Flintshire”, which he said he would be visiting on Thursday.

Mr Hunt also made a jibe at Sir Keir Starmer as he announced a devolution deal in Surrey, telling the Commons: “One of those areas will be the leafiest and most charming county in the country, namely Surrey, where of course, the Leader of the Opposition grew up. We don’t always get it right.”

1.14pm

The Chancellor also said the Government would be investing £3 million more in tackling paramilitarism in Northern Ireland.

He told the Commons: “Because we are proudly the Conservative and Unionist Party, I’m announcing £80 million for new Levelling Up Partnerships in Scotland, £500,000 to support the Hay Festival in Wales and £3 million of additional funding to support the successful Tackling Paramilitarism programme in Northern Ireland.”

1.12pm

1.11pm

1.10pm

Mr Hunt said he would invest a further £500 million over the next two years to fund further “innovation centres to help make us an AI powerhouse”.

He also said he would create a “new simplified R&D tax relief”, adding: “I will also reduce the rate at which loss-making companies are taxed within the merged scheme from 25% to 19% and lower the threshold for the additional support for R&D intensive loss-making SMEs that I announced in spring to 30%, benefiting a further 5,000 SMEs.”

Mr Hunt said he would give £5 million to Imperial College and Imperial College Healthcare NHS Trust to set up a Fleming Centre because 2028 marks the centenary of the invention of penicillin by Alexander Fleming.

Mr Hunt said he would also publish a longer-term strategy for advanced manufacturing and green energy sectors, adding the Government will make available £4.5 billion of support over the five years to 2030 to attract investment into strategic manufacturing sectors.

1.09pm

Pension savers will have the right to have “one pension pot for life”, Jeremy Hunt said.

The Chancellor told MPs: “I will also consult on giving savers a legal right to require a new employer to pay pension contributions into their existing pension pot if they choose, meaning people can move to having one pension pot for life.

“These reforms could help unlock an extra £75 billion of financing for high-growth companies by 2030 and provide an extra £1,000 a year in retirement for an average earner saving from 18.”

Mr Hunt said he would also take forward “further capital market reforms, to boost the attractiveness of our markets, and the UK one of the most attractive places to start, grow and list a company”.

1.08pm

The Chancellor said he would be publishing the Government’s plans to tackle energy grid connection problems after speaking to clean energy companies.

“After talking to businesses such as National Grid, Octopus Energy and SSE, we today publish our full response to the Winser review and Connections Action Plan,” Jeremy Hunt said.

He added: “These measures will cut grid access delays by 90% and offer up to £10,000 off electricity bills over 10 years for those living closest to new transmission infrastructure. Taken together these planning and grid reforms are estimated to accelerate around £90bn of additional business investment over the next 10 years.”

1.07pm

1.05pm

Mr Hunt said he would “explore options” for a potential NatWest share offer in the next 12 months, but said it would be “subject to supportive market conditions” and “value for money”.

1.04pm

Mr Hunt announced £50 million over the next two years to try to increase the number of apprentices in engineering and “key growth sectors” where there are shortages.

On planning, Mr Hunt said it takes “too long” to approve infrastructure projects and business planning applications.

He said: “Many businesses say they would be willing to pay more if they knew their application would be approved faster.

“So from next year, working with the Communities Secretary, I will reform the system to allow local authorities to recover the full costs of major business planning applications in return for being required to meet guaranteed faster timelines.

“If they fail, fees will be refunded automatically with the application being processed free of charge.”

On housing, Mr Hunt said the Government would invest £110 million over this year and next to deliver “high-quality nutrient mitigation schemes, unlocking 40,000 homes” and consult on a new permitted development right to allow any house to be converted into two flats provided the exterior remains unaffected.

1pm

The Chancellor said he planned to introduce 110 measures to increase the UK’s productivity.

Jeremy Hunt told the Commons that the OBR “expects the economy to grow by 0.6% this year and 0.7% next year. After that, growth rises to 1.4% in 2025, then 1.9% in 2026, 2% in 2027 and 1.7% in 2028”.

But he added: “If we want those numbers to be higher, we need higher productivity.”

He pointed to countries like France and the US where the private sector “invests more”, adding: “The 110 measures I take today help close that gap by boosting business investment by £20bn a year.

“They do not involve borrowing more and ramping up debt as some advocate.

“Instead, they unlock investment with supply-side reforms that back British business in the following areas.”

12.57pm

The Office for Budget Responsibility has forecast that the economy will grow by 0.6% this year and 0.7% in 2024, the Chancellor said.

12.55pm

The Chancellor said he wanted to create a “more productive state not a bigger one”, as he announced plans to reform public services.

Jeremy Hunt said: “That is why I want the public sector to increase productivity growth by at least half a percent a year, the level at which the size of our state starts to reduce as a proportion of GDP.”

He said Laura Trott, the Chief Secretary to the Treasury, had met “police, fire and ambulance personnel to understand where bureaucracy is holding them back”.

He added: “Through this vital work we will ensure that over time the growth in public spending is lower than the growth in the economy whilst always protecting the services the public value.”

Chancellor Jeremy Hunt said the Government would continue to meet its Nato commitment to spend 2% of GDP on defence

On veterans, Mr Hunt said: “I will extend national insurance relief for employers of eligible veterans for a further year and provide £10 million to support the Veterans’ Places, Pathways and People programme.”

12.54pm

Mr Hunt said the Government wanted to reduce borrowing, saying: “As the late Lord Lawson said, borrowing is just a deferred tax on future generations.”

Mr Hunt, in a message aimed at Labour leader Sir Keir Starmer and a dig at former Labour leader Jeremy Corbyn, said: “Both he and I wanted to make a Jeremy Prime Minister.

“In fairness his party and mine are probably equally relieved we didn’t succeed. But whereas this Jeremy is growing the economy, his one would have crashed it.”

Mr Hunt said, according to the OBR, borrowing is “lower this year and next” before saying: “It falls from 4.5% of GDP in 2023/24, to 3%, 2.7%, 2.3%, 1.6% and 1.1% in 2028/29.

“That means we also meet our second fiscal rule – that public sector borrowing must be below 3% of GDP – not just by the final year, but in almost every single year of the forecast. Some of this improvement is from higher tax receipts from a stronger economy, but we also maintain a disciplined approach to public spending.”

12.51pm

The Chancellor said the UK would meet its goal of having debt falling as a percentage of GDP.

Mr Hunt said the economy had “outperformed expectations” since last year’s autumn statement, adding: “We therefore meet our fiscal rule to have underlying debt falling as a percentage of GDP in the final year of the forecast, with double the headroom compared to the OBR’s March forecast.

“And we continue to have the second lowest government debt in the G7 – lower than the United States, Canada, France, Italy or Japan.”

12.49pm

The Chancellor said his fourth measure to help with the cost of living would be to uprate state pensions by 8.5%, “one of the largest-ever cash increases of the state pension”.

Jeremy Hunt said: “The triple lock has helped lift 250,000 older people out of poverty since it was instituted in 2011 and been a lifeline for many during a period of high inflation.

“There have been reports that we would uprate it by a lower amount to smooth out the effect of high public sector bonuses in July, but that would have been particularly difficult for one million pensioners whose only income is from the state.

“So instead, today we honour our commitment to the triple lock in full. From April 2024, we will increase the full new state pension by 8.5% to £221.20 a week, worth up to £900 more a year. That is one of the largest ever cash increases to the state pension – showing a Conservative government will always back our pensioners.”

He added: “Including today’s measures, our total commitment to easing cost of living pressures has risen to £104 billion.

“That includes paying around half the cost of the average energy bill since last October and amounts to an average of £3,700 per household.

“We are able to do that only because we reduced the deficit by 80% ahead of the pandemic, which the party opposite might reflect on, having opposed us every step of the way.”

12.46pm

The Government is delivering on all three of the Prime Minister’s economic pledges, Jeremy Hunt claimed.

“Three of the Prime Minister’s five pledges at the start of the year were economic: to halve inflation, grow the economy and reduce debt. Today I can report to the House that we are delivering on all three,” he said.

The Chancellor also jibed at shadow chancellor Rachel Reeves, telling the Commons: “Let’s start with inflation. The shadow chancellor didn’t mention it in her conference speech. My conference speech was before hers so all she had to do was a bit of copying and pasting which I’ve heard she’s good at.”

On Ms Reeves’ Labour’s conference speech, he added: “It speaks volumes that during the worst global inflation shock for a generation, it didn’t even get a mention.

“Well, if controlling inflation isn’t a priority for Labour, it is for us. When the Prime Minister and I took office, inflation was at 11.1%. Last week, it fell to 4.6%. We promised to halve inflation and we have halved it.

“Core inflation is now lower than in nearly half of the economies in the EU, and the OBR say headline inflation will fall to 2.8% by the end of 2024, before falling to the 2% target in 2025.”

12.45pm

Universal Credit and other benefits will increase by 6.7% next year in line with September’s inflation figure, Jeremy Hunt said.

12.44pm

Mr Hunt expressed his “horror” at the attack on Israeli citizens on October and the subsequent loss of life on both sides.

He said: “I am deeply concerned about the rise of antisemitism in our country, so I am announcing up to £7 million over the next three years for organisations like the Holocaust Educational Trust to tackle antisemitism in schools and universities.

“I will also repeat the £3 million uplift to the Community Security Trust.

“When it comes to antisemitism and all forms of racism, we must never allow the clock to be turned back.”

12.43pm

Mr Hunt said Conservatives know that a “dynamic economy depends on the energy and enterprise of people more than any diktats or decisions by ministers”.

He told MPs: “Today’s measures do not just remove barriers to investment, they reward effort and work.”

12.41pm

The Government will “reduce debt, cut taxes and reward work”, the Chancellor said.

Jeremy Hunt told the Commons: “In today’s autumn statement for growth our choice is not big government, high spending and high tax because we know that leads to less growth, not more.

“Instead we reduce debt, cut taxes and reward work.

“We deliver world class education. We build domestic sustainable energy.

“And we back British business with 110 growth measures – don’t worry, I’m not going to go through them all – which remove planning red tape, speed up access to the national grid, support entrepreneurs raising capital, get behind our fastest growing industries, unlock foreign direct investment, boost productivity, reform welfare, level up opportunity to every corner of the country, and cut business taxes.”