At 12:30 pm on 22nd November 2023, Chancellor Jeremy Hunt revealed his first Autumn Government Budget in the House of Commons.
This season’s budget statement outlines the government’s tax and spending plans for the year ahead, affecting the budgets of millions of people, alongside highlighting how much will be spent on key public services.
Information sourced from BBC.
Read on below for further summaries.
Taxation and wages
- The main National Insurance rate will drop to 10% from 12% starting January 6th, impacting 27 million individuals.
- Self-employed individuals earning over £12,570 will no longer pay Class 2 National Insurance starting in April 2024.
- Class 4 National Insurance for self-employed individuals on profits between £12,570 and £50,270 will decrease from 9% to 8% starting April.
- The National Living Wage, officially set at £10.42, will increase to £11.44 per hour from April.
- The new wage rate will extend to 21 and 22-year-old workers, not just those aged 23 and above, for the first time.
Benefits and pensions
- Universal Credit and other working-age benefits will rise by 6.7% starting April, matching September’s inflation rate.
- Local Housing Allowance rates, determining housing benefit and Universal Credit for rent, will unfreeze and increase to 30% of local rents.
- Work Capability Assessments will be revamped to account for the option of remote work post-Covid.
- £1.3 billion funding over five years will aid individuals with health conditions in securing jobs.
- An additional £1.3 billion will support those unemployed for over a year.
- Claimants able to work who refuse employment will lose benefit access and perks like free prescriptions.
- State pension payments will increase by 8.5% from April, in line with average earnings.
Economic and public finances
- The independent Office for Budget Responsibility (OBR) expects the economy to grow by 0.6% this year and 0.7% next year, rising to 1.4% in 2025; then 1.9% in 2026; 2% in 2027 and 1.7% in 2028.
- It forecasts that headline inflation – the rate prices are rising – will fall to 2.8% by the end of 2024 and to the Bank of England’s 2% target rate in 2025.
- Underlying debt forecast to be 91.6% of GDP next year; 92.7% in 2024-25; 93.2% in 2026-27; before declining to 92.8% in 2028-29.
- Borrowing forecast to fall from 4.5% of GDP in 2023-24; to 3% in 2024-25; 2.7% in 2025-26; 2.3% in 2026-27; 1.6% in 2027-28 and 1.1% in 2028-29.
Business and infrastructure
- The “full expensing” tax break, permitting companies to subtract new machinery and equipment expenses from profits, has been established as a permanent measure.
- The 75% discount on business rates for retail, hospitality, and leisure firms has been prolonged for an additional year.
- Households residing near new pylons and transmission infrastructure will receive up to £1,000 annually off energy bills for ten years.
Other measures
- All alcohol duty frozen until 1 August next year.
- Up to £7m over next three years for organisations like the Holocaust Educational Trust to tackle antisemitism in schools and universities.
- Funding of £5m for Imperial College and Imperial College Healthcare NHS Trust to set up a Fleming Centre to work on health innovations.
