Autumn Statement 2023 live: Chancellor Jeremy Hunt announces national insurance cut - latest updates

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The Chancellor Jeremy Hunt has announced cuts to national insurance as he declared the economy is "back on track" in the 2023 Autumn Statement.

He delivered the government's plans for the economy today in the House of Commons, and also announced business tax cuts, benefit increases and pension reforms. The economy has been stagnant with inflation rampant over the last year, while Liz Truss' disastrous mini-Budget sent mortgage rates spiralling.

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The Chancellor now believes he has more headroom after the government hit it's own self-imposed target of halving inflation this year. He said: "Conservatives know that a dynamic economy depends less on the decisions and diktats of ministers than on the energy and enterprise of the British people.” Rishi Sunak will hope this gives him a boost with lagging poll ratings.

Follow the latest updates, news and analysis on the Autumn Statement on our live blog below.

What were the main points from Hunt's statement?

It was a statement full of cuts and increases as the Chancellor delivered his autumn statement to the house.

So what were the main announcements?

  • National insurance to be cut by two percentage points from 6 January - a worker on £35k will save £450 per year
  • Class 2 national insurance axed
  • Class 4 national insurance cut by one percentage point
  • Permanent tax breaks for businesses
  • Commitment to triple lock pensions "in full" by increasing the state pension by 8.5% to £221.20 a week from April 2024
  • Universal Credit and other benefits to increase by 6.7% in 2024, in line with September's inflation rate rather than October's
  • National Living Wage to be increased by 9.8% to £11.44 an hour

Help for first-time buyers absent

Apart from increasing the local housing allowance, there were minimal notable announcements from the Chancellor on housing - with mortgages and first-time buyers ignored completely.

Kate Steere, deputy editor and mortgage expert at personal finance comparison site, commented: "Help for first-time buyers was noticeably absent from today’s autumn statement. The housing market’s resilience in the past couple of months may have swayed the chancellor away from introducing any groundbreaking changes.

"However, the fact remains that first-time buyers are faced with a shortage of properties in their price range and significantly higher borrowing costs. The government’s decision not to address problems with the Lifetime ISA (LISA) scheme will leave many first-time buyers in limbo. It’s short-sighted for it not to acknowledge changes in the market and make adjustments to LISAs accordingly.

"The same can be said for the decision to leave stamp duty untouched. Ahead of the statement, there were rumours of a stamp duty cut or a green stamp duty rebate. Neither has materialised, signifying that the government is inclined to let the market sort itself out. While house prices remain steady, buyer confidence is still low. A change to stamp duty could have stabilised the market and shored up confidence."

Snap reaction - Hunt presents tax cuts spin

While the Autumn Statement is naturally packed with spending, figures and economic analysis, it still has some political spin attached. Jeremy Hunt has presented this as a "tax cut" budget - with the national insurance cut the headline figure.

However, despite this, the overall tax burden will continue to rise. This is because the government has frozen the income tax thresholds, while wages have risen because of inflation pushing more people into higher tax brackets. It's been described as a stealth tax, and HMRC raked in an additional £27billion because of it this year.

The Treasury says this is necessary because of the vast sums of money the government had to borrow over the pandemic and the energy bill crisis. However it's quite different to how Hunt presented it in the Commons.

Labour says that "too many families are struggling to make ends meet" and "nothing that has been announced today will remotely compensate" this.

The economy and cost of living crisis is the number one issue facing voters, and if they start to feel better off there's a chance Rishi Sunak may arrest his flagging poll numbers. However, with the Bank of England saying no one should get overconfident about inflation, that's still a big if.

Working people still 'worse off' because of Conservative 'damage' - Labour

Labour has blasted the Conservatives for making working people "worse off".

In response to today's statement, shadow chancellor Rachel Reeves said:  “Nothing that has been announced today will remotely compensate.

"Mortgages rising, taxing eating into wages. Inflation high, with prices still going up in the shops. Public services on their knees. And too many families struggling to make ends meet.

“As the sun begins to set on this divided, out-of-touch, weak Government, the only conclusion that the British people will reach is this: after 13 years of Conservatives the economy is simply not working, and despite all the promises today, working people are still worse off.”

Hunt to cut National Insurance by 2 percentage points from 6 January

Jeremy Hunt announces he is cutting headline national insurance from 12% to 10% from 6 January.

He told MPs in the chamber that the move will "help 27 million" workers.

Hunt said: “It means someone on the average salary of £35,000 will save over £450. For the average nurse, it is a saving of over £520 and for the typical police officer it is a saving of over £630 every single year.”

Fury at welfare reforms

There is anger and fury in the House of Commons over Hunt's announcement over the "biggest reform of the welfare system in a decade".

It involves taking away benefits if claimants are unable to find a job with government support after 18 months. One opposition MP shouted "disgusting" when this was announced.

Chancellor Jeremy Hunt delivers his Autumn Statement. (Credit: House of Commons/UK Parliament/PA Wire)Chancellor Jeremy Hunt delivers his Autumn Statement. (Credit: House of Commons/UK Parliament/PA Wire)
Chancellor Jeremy Hunt delivers his Autumn Statement. (Credit: House of Commons/UK Parliament/PA Wire)

Hunt betting on business

The Chancellor has announced a series of tax cuts for businesses which he hope will stimulate the economy.

This includes making permanent a tax cut for businesses who invest a million pounds in the UK, as well as tax cuts for self employed people.

Hunt said this is the "most effective way we can raise wages and living standards for every person in this country".

However, polling shows that the public actually want the government to increase businesses taxes, as they feel companies don't pay enough. Hunt will need to hope any growth filters through to the public.

Class 2 National Insurance axed

Around two million self-employed people will be impacted as Hunt announced that class 2 national insurance will be axed.

He said: “Today, after careful consideration and in recognition of the contribution made by self-employed people to our country, I can announce we are abolishing class 2 national insurance altogether, saving the average self-employed person £192 a year.

“Access to entitlements and credits will be maintained in full and those who choose to pay voluntarily will still be able to do so.”

Class 4 national insurance will also be cut from 9% to 8%, with Hunt adding that "these reforms will save around two million self-employed people an average of £350 a year from April.”

Economy forecast to grow in 2024

The Office for Budget Responsibility (OBR) has said that the economy will grow by 0.6% this year and again by 0.7% in 2024, according to Hunt.

But he added: “If we want those numbers to be higher, we need higher productivity.”

Government will honour pensions triple lock promise 'in full'

Hunt said that the government will commit to the triple lock "in full", with the state pension increase by 8.5% to £221.20 a week from April 2024.

He said: "That is one of the largest ever cash increases to the state pension – showing a Conservative government will always back our pensioners.”

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