Autumn Statement 2023: What Did it Really Mean?

15 Jan

At the end of 2023 the Chancellor, Jeremy Hunt MP, delivered his Autumn Statement regarding the government’s economic plans. In his opening remarks, the Chancellor said that the government made difficult decisions in order to halve inflation and stabilise the economy, but that “the work is not done”. He promised 110 measures aimed at boosting growth, whilst pledging to avoid large-scale public spending and also cut taxation [1].

This will have a significant impact on both individuals and businesses across the country. Some of the key points are detailed below:

Personal Tax: Main rate of employee National Insurance reduced by 2 percentage points to 10%. Hunt claims this will positively affect 28 million people from 6th January 2024 [1]
Public Spending: To create ‘a more productive state not a bigger one’, public services spending will focus on ‘tackling waste. The Office for Budget Responsibility (OBR) says ‘measures will reduce spending on public services by £19 billion’. [2]
Growth: Economic growth already 1.8% greater than pre-covid, and forecasted at 0.6% in 2023 and 0.7% in 2024 (OBR). However, economic growth to drop from a five year average of 1.6% to 1.3% [3]
Business Tax: It is claimed that a package of measures, including making full expensing permanent, will increase business investment by % of GDP. Business rates discount for hospitality, retail and leisure worth £4.3 bn [1]
Inflation: In January 2023, one of the Prime Minister’s 3 key economic priorities was to halve inflation. CPI inflation has dropped from more than 11% last autumn to 3.9% in November 2023. Inflation expected to fall to 2.8% by the end of 2024. [1]
Wages & Benefits: ‘Biggest set of welfare reforms in a decade, targeted at 200,000 more people into work’ [1] Benefits to be increased by 6.7% tougher requirements for those who claim them [1]. Local housing allowance raised, benefiting some households by £800 in 2024 (previously frozen since 2020).
Borrowing: Public sector borrowing predicted to fall from 4.5% to 1.1% in 2028/9 [4] Borrowing lower in 2023 and 2024, and across the forecast, by £0.7 billion every year, compared to spring forecast [4]
Economy: Treasury set to invest £1m in ‘green technology businesses’ and £4.5bn in manufacturing between 2025 and 2030. Sale of government stakes in NatWest to be explored, via a ‘retail share offer [5]

What the Chancellor has labelled as ‘an Autumn Statement for growth’, the OBR has taken a more conservative view on, stating that ‘the impact on growth will be modest’. Stay turned to our Deecon-struct blogs as we continue to monitor and analyse major government announcements.