Earlier today, the Chancellor of the Exchequer presented the Autumn Statement to Parliament, with an aim to restore stability to the economy, protect high-quality public services and build long-term prosperity for the country.
I am pleased to see the Government prioritising economic growth while also focusing on protecting public spending - with significant increases in funding for health, social care and education. The Government is also committed to protecting the most vulnerable in society, continuing the Energy Price Guarantee, protecting the Triple Lock for pensioners and uprating welfare benefits in line with inflation.
Highlights of today’s Statement include:
- Public Services:
- £7.7 billion in additional funding for health and social care in the next two years. Despite the challenging economic circumstances, the Government is providing £2–3 billion additional funding for the NHS in each of the next two years to bring down ambulance waiting times, tackle the Covid backlog and improve access to GPs. £2.8 billion next year and £4.7 billion the year after, will also be provided for adult social care, which will double the number of people leaving hospitals on time and into care by 2024, addressing unmet needs and boosting low pay in the sector.
- £4 billion in additional funding for schools over the next two years. The schools budget will increase by £2 billion this year and £2 billion next year to help schools with rising costs as a result of inflation.
- Defence spending will continue to exceed two per cent of GDP. The defence budget will continue to meet the commitment to exceed two per cent of GDP. Further detail on the path of the defence budget will be set out at the Spring Budget.
- £7.7 billion in additional funding for health and social care in the next two years. Despite the challenging economic circumstances, the Government is providing £2–3 billion additional funding for the NHS in each of the next two years to bring down ambulance waiting times, tackle the Covid backlog and improve access to GPs. £2.8 billion next year and £4.7 billion the year after, will also be provided for adult social care, which will double the number of people leaving hospitals on time and into care by 2024, addressing unmet needs and boosting low pay in the sector.
- Taxation:
- A fair approach to personal taxation. Instead of raising rates, the Government is freezing personal tax thresholds for a further two years. It is also reforming the Additional Rate threshold, so that a taxpayer who earns more than £150,000 will pay £1,200 more in tax per year. Changes to the dividends allowance and Capital Gains Tax Annual Exemption Amount will mean that alternative forms of income will be taxed more fairly.
- Small businesses shielded from most tax rises. Small businesses will be protected from the rise in Corporation Tax and reforms to employer National Insurance through the Small Profits Rate and Employment Allowance. This means only the largest ten per cent of companies will pay the top rate of Corporation Tax and 40 per cent of all businesses will be unaffected by the freeze in National Insurance thresholds.
- Windfall taxes on energy companies extended and increased. From 2023, the Energy Profits Levy rate will rise from 25 per cent to 35 per cent and will continue until the end of March 2028. A 45 per cent Levy will be applied to extraordinary returns made by electricity generators. In total these windfall taxes will raise £52 billion over six years.
- A fair approach to personal taxation. Instead of raising rates, the Government is freezing personal tax thresholds for a further two years. It is also reforming the Additional Rate threshold, so that a taxpayer who earns more than £150,000 will pay £1,200 more in tax per year. Changes to the dividends allowance and Capital Gains Tax Annual Exemption Amount will mean that alternative forms of income will be taxed more fairly.
- Boosting Economic Growth
- £600 billion in capital investment protected. The Autumn Statement maintains public capital investment at record levels, delivering over £600 billion of investment over the next five years. The Government remains committed to key national infrastructure projects such as High Speed Rail, Northern Powerhouse Rail, and Sizewell C.
- £1.7 billion Levelling Up Fund protected. Round two of the Levelling Up Fund will continue as planned and at already announced funding levels. This means at least £1.7 billion of projects will be shortly be announced.
- £14 billion business rates package to support high streets. Over the next five years the Government will provide a generous support package to help the high street and protect businesses from large business rate increases by freezing the multiplier and reducing bills by six per cent from what they would be. This support will particularly benefit the retail, hospitality and leisure sectors.
- Supporting business with the cost of their energy bills. By January 2023, the Government will bring forward proposals to support energy bills beyond April 2023. Full details will be made available then, but future support will be focussed where it is needed most - for energy intensive industries, small businesses, and the hospitality sector.
- £600 billion in capital investment protected. The Autumn Statement maintains public capital investment at record levels, delivering over £600 billion of investment over the next five years. The Government remains committed to key national infrastructure projects such as High Speed Rail, Northern Powerhouse Rail, and Sizewell C.
- Protecting low-income households
- The Energy Price Guarantee will continue to support everyone for another year. This winter, the price households pay for the energy they use will be capped, so that a typical household will pay £2,500. From April 2023, the price cap will rise so that a typical household will pay £3,000. The Energy Price Guarantee will then end in April 2024.
- Over £12 billion of additional targeted support to help the most vulnerable households. This year’s cost of living payments will continue and next year there will be extra one-off payments of £900 for the 8 million households on means-tested benefits, £300 to pensioners and £150 for disability benefit recipients. Through the Energy Price Guarantee, the average household will save a further £500, to help with their energy bills. £1 billion of extra funding will also be provided by extending the Household Support Fund for another year.
- Protecting the Triple Lock. In April, the State Pension will increase in line with inflation, which is the biggest cash increase in the State Pension ever.
- Uprating benefits in line with inflation. To protect the most vulnerable, benefits will be increased in line with inflation for 2023–24. More than 10 million households in receipt of working-age and disability benefits will see an increase in their benefit payments. The average uplift for households Universal Credit will be around £600.
- Increasing the National Living Wage to provide £1,600 to 2 million low paid workers. From 1 April 2023, the National Living Wage will increase by 9.7 per cent to £10.42 an hour for workers aged 23 and over. This represents an increase of over £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over 2 million low paid workers
- The Energy Price Guarantee will continue to support everyone for another year. This winter, the price households pay for the energy they use will be capped, so that a typical household will pay £2,500. From April 2023, the price cap will rise so that a typical household will pay £3,000. The Energy Price Guarantee will then end in April 2024.
To read the Autumn Statement in full, please see the following link: https://www.gov.uk/government/publications/autumn-statement-2022-documents
