Dear Resident,
I hope you are well.
As I am sure many of you will be aware, the Chancellor of the Exchequer, Jeremy Hunt MP’s Autumn Statement was delivered in the Commons Chamber today. The Prime Minister has seen significant success in delivering on his economic pledges, as he continues to reduce inflation, reduce national debt and grow the economy. I recently spoke to the Chancellor ahead of the statement, where I pushed for the issues that really matter for the people of Scunthorpe. This included the Cost of Living and our steelworks.
The 2023 Autumn Statement has highlighted the Government’s commitment to continue delivering on these pledges for the betterment of people and the economy. We recently saw inflation drop to 4.6% in October of this year, and the Chancellor has shared that inflation is forecast to fall to 2.8% by the end of 2024. UK debt now equates to 94% of the UK’s annual GDP, and is forecast to drop annually. Finally, I am pleased to report that our economy is now 1.8% larger than pre-pandemic levels, and is forecast to continue growing.
There were a number of growth measures implemented that look to improve our economy while supporting British people and businesses. These measures will ensure that we fulfil the achievements forecast by the Office for Budget Responsibility. The Autumn Statement was defined by two key points; Backing British Businesses and Making Work Pay.
Please find below an outline of today’s Autumn Statement delivered by the Chancellor.
Cost of Living Support
While the Government continues to deliver on the Prime Minister’s three economic pledges, it is recognised that this does not mean that the Cost of Living is fully resolved. It is for this reason that the Autumn Statement has rightly accounted for an increase in Cost in Living support, which is as follows:
- Universal Credit and other benefits will be increased by 6.7% in April 2024, in line with September inflation rates. This provides a stronger safety net for all those who cannot work for legitimate reasons.
- The Triple Lock will be honoured. The basic State Pension, new State Pension and Pension Credit will all be uprated in line with the annual earnings growth of 8.5%.
- Local Housing Allowance rates will rise to the 30th percentile of local market rents in April 2024. This will help to further support 1.6 million low-income households with rising rent prices.
- The freeze on Alcohol Duty has been extended until 1 August 2024.
Backing British Businesses
The Government has determined that in order for our economy to thrive, we must create ideal conditions for the growth and support of businesses. This is through the removal of barriers to investment and responsibly cutting taxes for businesses where possible.
Following the introduction of super deduction in 2021, to incentivise business investment. The Government went further in this year’s Spring Budget, replacing this with full expensing for three years from 1 April 2023, allowing businesses to write off the full cost of qualifying plant and machinery investment. The Government are now making this change permanent. This alone is forecasted to increase annual investment by £3 billion. The Government is also making changes worth £280 million a year to simplify and improve R&D tax reliefs, helping to drive innovation in the UK.
Further to this, the Autumn Statement sees in a massive reform in the Planning System. These reforms will look to speed up approvals and set out a plan to reduce the time it takes for new projects to connect to the grid. Together these reforms will unlock new commercial developments that will enhance our energy security and help drive the transition to net zero.
Not only are the Government supporting big businesses, but they have introduced additional support for small businesses. This is through a business rates support package worth £4.3 billion over the next five years to support small businesses and the high street. The small business multiplier will be frozen for a fourth consecutive year, and Retail, Hospitality and Leisure (RHL) relief will be extended, ensuring the most vulnerable businesses continue to be supported. The standard rate multiplier will be uprated in line with inflation.
The Government continues to back the growth sectors of the future and is announcing further targeted support for digital technology, green industries, life sciences, advanced manufacturing and creative industries. This includes making available £4.5 billion to unlock investment in strategic manufacturing sectors – auto, aerospace, life sciences and clean energy – which are developing cutting edge technology and driving our transition to net zero. Together with existing manufacturing support and decarbonisation plans, this funding will level up communities across the country with higher-paid jobs, improve the UK’s energy security, and help grow the sectors of the future.
Making Work Pay
The Government is cutting taxes for over 29 million working people. The main rate of Class 1 employee National Insurance contributions (NICs) will be cut from 12% to 10% from 6 January 2024, with employees benefitting from January onwards. This means the average worker on £35,400 will receive a tax cut in 2024-25 of over £450. This will reward work and sustainably grow the economy, providing a combined rate of income tax and NICs for an employee paying the basic rate of tax of 30% – the lowest since the 1980s.
The Government is also cutting taxes for the self-employed from 6 April 2024. The Government is reducing the main rate of Class 4 self-employed NICs from 9% to 8%, and will abolish the outdated and needlessly complex Class 2 self-employed NICs, reforming and simplifying the tax system. Taken together these changes will benefit around 2 million self-employed individuals. These tax cuts are part of the Government’s long-term strategy for growing the economy and getting more people into work, ensuring that the UK has the labour market it needs for its future.
These changes come alongside a further substantial economic benefit from those in work increasing their hours. The Government is delivering on its commitment to end hourly low pay. From 1 April 2024, the National Living Wage (NLW) will increase by 9.8% to £11.44 with the age threshold lowered from 23 to 21 years old. This represents an increase of over £1,800 to the annual earnings of a full-time worker on the NLW and is expected to benefit over 2.7 million low paid workers.
Additionally, the Government is reforming the welfare system so it better supports people into work where they are able, focusing on the long-term sick and disabled, and long-term unemployed. The Government’s Back to Work Plan, supported by over £2.5 billion in funding over the next five years, is an ambitious new programme to help people look for and stay in work, manage their health conditions, and stem the flow into sickness related inactivity. There are now a record 2.6 million people who are economically inactive due to long-term sickness and disability, almost half a million more than before the pandemic.
As you can see above, the Chancellor has provided the UK with the right conditions to improve our economy and the lives of people in Scunthorpe and across the UK. I am really looking forward to seeing the positive impact that these measures, alongside many others, will have on our area for the long-term prosperity of Scunthorpe.
If you have any questions or concerns, on this matter or any other, please do not hesitate to get back in touch with myself and my team. We are here to help.
I look forward to seeing you all again in my next update.
My very best wishes,
Holly