22 NOV 2023
Autumn Statement 2023: Key Points
Aimed at building a stronger and more resilient economy, the Chancellor set out a plan to unlock growth and productivity by boosting business investment by £20 billion a year, getting more people into work, and cutting tax for 29 million workers – the biggest tax cut on work since the 1980s.
With higher revenues resulting from stronger growth than previously projected and the pledge to halve inflation having been met, the government has stabilised the economy through taking sound decisions. As set out by the Prime Minister this week, the stronger outlook means taxes can now be cut in a serious, responsible way.
To that end, Mr Hunt announced that a 2 percentage point cut to Employee National Insurance from 12% to 10% will come into effect from January 2024.
Accompanying forecasts by the OBR confirm that today’s measures will make the economy permanently bigger, with growth every year of the forecast period. Borrowing and debt as a share of the economy are lower than in Spring this year and next year, with borrowing also lower on average across the forecast by comparison. They also confirm that inflation is expected to return to target in line with the Prime Minister’s economic priorities.
Key highlights:
- Investment in Skills and AI: An allocation of £50 million is dedicated to enhancing skills and apprenticeships in engineering. A substantial £500 million investment over two years aims to position the UK as a leader in AI and innovation.
- Welfare and Workforce Reforms: The National Living Wage is set to increase to £11.44 per hour in April 2024. Additionally, a new policy mandates participation in a work placement for individuals unemployed for over 18 months.
- Taxation Adjustments: Notably, there are reductions in National Insurance charges. The abolition of Class 2 National Insurance benefits the self-employed, while employees will see a reduction from 12% to 10% starting January 6th.
- Economic Growth and Business Support: The Chancellor has outlined plans to enhance business investment by £20 billion annually. This includes a comprehensive package to support British businesses, ranging from Permanent Full Expensing to a £4.3 billion business rates support package.
- Infrastructure and Innovation Funding: The statement includes a £4.5 billion investment in high-growth industries, focusing on clean energy and AI, alongside significant funding for advanced manufacturing and life sciences.
- These measures are designed to bolster the UK's economic resilience, stimulate growth, and support innovation. They offer significant implications for our strategic planning and operational priorities.