Chancellor Jeremy Hunt has unveiled the 2023 UK Autumn Statement, a comprehensive plan for our economic future that includes a series of fiscal measures designed to promote significant economic growth going forwards. The Office of Budget Responsibility (the OBR) has published a forecast explaining the level to which growth has been weak, and how rising interest rates have impacted household budgets and consumer and business spending.
The chancellor has indicated the OBR’s forecast of 0.6% is correct, and will rise to 0.7% in 2024. The good news is official figures point to the economy being 1.8% larger than pre-Covid-19 levels and inflation is finally set to come down, something that'll benefit everyone. The chancellor went on to say in his speech that the statement was about halving inflation, growing the economy and reducing debt.
Other announcements included a cutting of National Insurance from the Class 1 NIiCs paid by the self-employed, from 9% to 8% from April 2024. The full expansion of capital allowance means companies being able to deduct spending on new machinery and equipment from profits, something that was introduced in the 2023 Spring Budget, albeit temporarily.
The chancellor's package includes hundreds of measures that aim at boosting serious economic growth and the OBR has concurred, having predicted the economy will grow by 0.6% this year and increase to 1.4% in 2024, then heading to at least 1.4% the following year. Meanwhile, Universal Credit and other in-work benefits across the UK are set to increase in line with inflation rates. The prediction is that living standards will grow incrementally, with local housing returning to pre-pandemic levels, whilst housing benefit is to be unfrozen and increased by 30%.
Funding over the next five years has been increased to £1.3 billion, enabling anyone with a health condition to find employment, whilst work capability assessment is to be reassessed, taking into account those working from home since the pandemic. This means a debt forecast of 91.6% of GDP next year, plus a full expensing tax break, allowing companies to deduct spending on a permanent basis.
Households living close to the new transmission structure are entitled to a £1,000 deduction on energy bills for the next decade. Meanwhile, funding to attract green energy, zero emissions vehicles and AI innovation are being given a priority. Across the county - including Scotland- £80 million is being invested, supporting regeneration projects that are set to make a real difference.
The chancellor also has plans to boost the economy by investing £20 billion a year so as to promote productivity. At the same time, financial incentives and tax for freeports have been extended from 5 to10 years, with new investment zones planned across the north of the country. There are also plans to raise the local housing allowance, which is expected to support 1.6 thousand households this coming year.
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