It only feels five minutes since Rishi Sunak delivered his Autumn Statement: making promises to protect the economy and help households during the cost of living crisis, After seeing the UK thrown deeper into one of the hardest economic climates in recent times, we are back to hear what his predesessor suggests may change.
Today Chancellor Jeremy Hunt took to the House of Commons to deliver a very national debt-heavy speech to a raucous crowd in the capitol.
Doubling down on Tory values, he has listed 110 measures to promote growth and emphasised his focus on long-term measures, with claims that our economy is “back on track”.
Jeremy Hunt says benefits will be uprated next year by 6.7%
Hunt says benefits will be increased by 6.7%, in line with September’s inflation figure.
He says he chose not to use the lower October figure, as some people speculated he might.
Housing allowance increase
Hunt says he is increasing the housing allowance.
This will give 1.6 million people an extra £800 next year, he says.
Inflation to hit target by 2025.
Hunt “From April next year the state pension will go up by 8.5% – which will be worth up to £900 a year.” So the government is honouring the Triple Lock for pensioners.
He also unveiled that the UK are the fastest-growing economy since 2010, have the fourth highest literacy in the world and some of the most innovatice technologies and innovations in the world.
National Insurance to be cut
the National Insurance (NI) payments that employees are charged will be cut from 12% to 10%, meaning that someone earning over £35,000 would save them around £450 a year. This change will be brought in in January 2024
Class 2 National Insurance to be abolished
Hunt “We are abolishing Class 2 National Insurance altogether, saving the average self-employed person £192 a year.”
He says he will abolish the “Class 2” National Insurance charge for self-employed people earning more than £12,570. That will get rid of a flat rate compulsory charge of £3.45 a week.
He says that will save the average self-employed person £192 a year.
Meanwhile, self-employed people who pay “Class 4” National Insurance at 9% on all earnings between £12,570 and £50,270 will see that cut by 1 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.”
Jasmine Birtles, founder of MoneyMagpie.com, comments “the National Insurance cuts are certainly welcome and they will give a small boost to workers, but I was really hoping the Chancellor would raise the income tax thresholds to give workers a true incentive to get out of bed in the morning and be productive. In real terms our tax payments are going up because these thresholds have been frozen for a few years. Cutting NI is a nice cheap way to curry favour with voters because pensioners don’t pay NI although they could potentially pay income tax.
“Paradoxically, by increasing the state pension by 8.5% next year and not unfreezing the income tax thresholds, the Chancellor is pushing quite a lot of pensioners into paying more tax as more of them go above the basic threshold of £12.570 a year.”
Back to Work Programme
Perhaps the most controversial part of the statment hammers home the importance of work for the sick and mentally ill: the Tory Governement are looking for ways to force people back into work.
Responding to this Thomas Lawson, CEO of national anti-poverty charity Turn2us, said:
“There are measures in this budget that are good news for people who are struggling. But we remain worried about the impact on people with disabilities and physical and mental health conditions.
“Every day, around 250 people contact our helpline for information and support. They’re skipping meals and getting into debt to pay household bills and rent.
“By pushing people into any job rather than the right job, emphasising the punishments they could receive and axing some people’s benefits completely, the government will further damage people’s trust and worsen their health.
“We need a truly compassionate approach that centres understanding, dignity, and respect.”
Living and Minimum Wage Increase
30% take-home increase since 2010.
He says the minimum wage – known officially as the National Living Wage – will rise from £10.42 to £11.44 per hour in April next year.
This is a rise of 9.8% and worth up to worth up to £1,800 for a full-time worker, Hunt says this decision is “the largest ever cash increase” in the National Living Wage.
The higher wage will also be paid to 21 and 22-year-olds for the first time. At the moment, only workers over 23 years old receive £10.42 an hour.
Labour Responds to Autumn Statement
Shadow Chancellor Rachel Reeves responds to the statement: “Today the Chancellor has lifted the lid on 13 years of economic failure.” Labour responds to the autumn statement with claims of a “dead end” and the “damage done to our economy” at the hands of a Tory government.
“Despite all their promises, working people are still worse off.”
Reeves reminds the British public on the promises on tax made in the previous autumn statement and where it has failed. She reminds people of stealth taxes on working people – something the Conservatives have consistanty failed to rise to.
The tax decreases today “won’t make a dent on the tax increases that the conservative government have already put in place.”
She claims that: “they are the problem, not the solution” in reference to Sunak’s party.
As opposed to “punishing” the sick, she has suggested that a Labour party would focus on getting the NHS working and to help the people get on their feet.
Jasmine Birtles says “overall it was another somewhat disappointing statement. I was hoping for bold moves with serious tax cuts for workers and for small businesses. In the end, yet again, we saw the Chancellor tinkering around the edges. I welcome the tax cuts that have been announced and the extra funding for apprenticeships, the help for renters and (controversially) the incentives for those off work due to mental or physical illness to get back into the jobs market, but I wish he had done more. We are staring down the barrel of a recession and we need bold moves to get us out of it. This Autumn Statement didn’t have them!”