Jeremy Hunt has outlined a package containing 鈥渄ifficult decisions鈥 that amounts to a 鈥渟ubstantial tax increase鈥 in an autumn statement he said would put the 海角视频 on a 鈥減ath to stability鈥.
The package represents a significant change from his predecessor Kwasi Kwarteng鈥檚 unfunded tax cuts in the disastrous mini-budget less than two months, ago which was widely blamed for having spooked the markets.
Here are the main points from Chancellor Jeremy Hunt鈥檚 autumn statement:
Growth and recession
鈥 The OBR has said that the 海角视频 is 鈥渘ow in recession鈥, Mr Hunt said, but he added 鈥渙verall this year, the economy is still forecast to grow by 4.2%鈥.
鈥 Mr Hunt promised his autumn statement will lead to a 鈥渟hallower downturn鈥 in the 海角视频鈥檚 finances.
鈥 Underlying debt as a percentage of GDP is expected to fall from a peak of 97.6% of GDP in 2025-26 to 97.3% in 2027-28.
鈥 Mr Hunt announced two new fiscal rules, that underlying debt must fall as a percentage of GDP by the fifth year of a rolling five-year period, and that public sector borrowing, over the same period, must be below 3% of GDP.
Pay and support with the cost of living
鈥 The energy price guarantee scheme will increase from 拢2,500 for the average household to 拢3,000 for 12 months from April, Mr Hunt confirmed.
鈥 The Government will introduce additional cost-of-living payments for the 鈥渕ost vulnerable鈥, with 拢900 for those on benefits, 拢300 for pensioners and 拢150 for those on a disability benefit.
鈥 The Chancellor said he will cap the increase in social rents at a maximum of 7% in 2023/24, saving the average tenant 拢200 next year.
鈥 Mr Hunt has accepted a recommendation to increase the national living wage by 9.7%, making the hourly rate 拢10.42 from April 2023.
Inflation
鈥 The Chancellor told MPs the Office of Budget Responsibility (OBR) has confirmed 鈥済lobal factors鈥 are the 鈥減rimary cause鈥 of inflation.
鈥 The OBR forecasts the 海角视频鈥檚 inflation rate to be 9.1% this year and 7.4% next year.
鈥 He said the autumn statement will cause inflation to 鈥渇all sharply from the middle of next year鈥.
鈥 The Chancellor confirmed the Bank of England鈥檚 remit will not be changed and it has his 鈥渨holehearted support in its mission to defeat inflation鈥.
Tax
鈥 Mr Hunt reduced the threshold at which the top rate of income tax is paid from 拢150,000 to 拢125,140, but said he was not raising headline rates of taxation. He said those earning 拢150,000 or more will pay just over 拢1,200 more a year.
鈥 Mr Hunt said he would protect the increases in departmental budgets already set out in cash terms, before growing resource spending at 1% a year in real terms over the next three years. He said public spending would grow 鈥渟lower than the economy鈥.
鈥 Electric vehicles will no longer be exempt from Vehicle Excise Duty from April 2025 to make the motoring tax system 鈥渇airer鈥.
鈥 Mr Hunt increased the windfall tax on oil and gas giants from 25% to 35% and imposed a 45% levy on electricity generators to raise an estimated 拢14 billion next year.
鈥 On business rates, Mr Hunt said the Government will proceed with the revaluation of business properties from April 2023.
鈥 The stamp duty cuts announced in the mini-budget will remain in place but only until March 31 2025. Mr Hunt told the House the OBR expects housing activity to slow over the next two years.
鈥 On business taxes, the Chancellor said he had decided to freeze the Employers National Insurance Contributions threshold until April 2028. 鈥淲e will retain the Employment Allowance at its new, higher level of 拢5,000,鈥 he said.
鈥 The Chancellor rejected calls to put VAT on independent school fees.
Health
鈥 Mr Hunt said he will increase the NHS budget by an extra 拢3.3 billion in each of the next two years.
鈥 The NHS will be asked to 鈥渏oin all public services in tackling waste and inefficiency鈥.
鈥 Mr Hunt said the NHS would publish an independently-verified plan for the number of doctors, nurses and other professionals needed in five, 10 and 15 years鈥 time.
鈥 He allocated for adult social care additional grant funding of 拢1 billion next year and 拢1.7 billion the year after.
Spending and benefits
鈥 Mr Hunt said 鈥渨ith just under half of the 拢55 billion consolidation coming from tax, and just over half from spending, this is a balanced plan for stability鈥.
鈥 The Chancellor said he will invest an extra 拢2.3 billion per year in schools over the next two years.
鈥 It will 鈥渘ot be possible鈥 to return to the 0.7% overseas aid target 鈥渦ntil the fiscal situation allows鈥, Mr Hunt said.
鈥 He said he will maintain the defence budget at at least 2% of GDP.
鈥 Mr Hunt said he would move back the managed transition of people from employment and support allowance on to Universal Credit to 2028.
鈥 The implementation of the Dilnot reforms will be delayed for two years, Mr Hunt confirmed, announcing an increase in funding for the social care sector of up to 拢2.8 billion next year and 拢4.7 billion the following year.
鈥 The Barnett consequentials of the autumn statement mean an extra 拢1.5bn for the Scottish Government, 拢1.2bn for the Welsh Government, and 拢650m for the Northern Ireland Executive.
鈥 The Chancellor said he would not cut 鈥渁 penny鈥 from Government capital budgets over the next two years, and would then maintain them at that level for the next three years.
鈥 Working age and disability benefits will increase in line with inflation, with a rise of 10.1%, costing 拢11 billion.
鈥 State pensions will increase in line with inflation in April, as Mr Hunt announced the 鈥渂iggest ever cash increase in the state pension鈥.
Climate and energy
鈥 Mr Hunt said 鈥渨e remain fully committed to the historic Glasgow Climate Pact agreed at COP26 including a 68% reduction in our emissions by 2030鈥.
鈥 The Chancellor said he would add an extra 拢6 billion of investment in energy efficiency from 2025 to help meet a new ambition of reducing energy consumption from buildings and industry by 15% by 2030, adding this could 鈥 according to today鈥檚 prices 鈥 save 拢28 billion from the national energy bill or 拢450 off the average household bill.
鈥 The Government will proceed with the new nuclear plant at Sizewell C.
