What time the Autumn Statement is today, how to watch live and what to expect from Jeremy Hunt
Chancellor Jeremy Hunt will deliver his Autumn Statement today, with his focus firmly on reducing the nation’s deficit.
It comes in the wake of news that UK inflation rose to 11.1 per cent in October – a 41-year-high. High inflation, caused in large part by soaring energy prices, has led to a cost of living crisis that has left many households and businesses struggling to make ends meet.
The Chancellor has warned that “decisions of eye-watering difficulty” lie ahead, adding that the Government “will be asking everyone for sacrifices”.
Here’s everything you need to know about the Autumn Statement, including how to watch and what to expect.
What time is the Autumn Statement?
The Autumn Statement is expected to be delivered by the Chancellor at 11.30am in the House of Commons.
There will then be a statement on the state of the economy and a reaction to former chancellor Kwasi Kwarteng’s disastrous September min–budget at 2pm by the Office for Budget Responsibility.
There will be a live stream of the Autumn Statement right here on this page.
You can also watch it on BBC News and Sky News on television. BBC News can be accessed online via BBC iPlayer, while Sky News has a live YouTube feed.
The Chancellor’s plans will be in stark contrast to the tax cuts announced by Mr Kwarteng. In his first speech as Prime Minister, Rishi Sunak said the country was “facing a profound economic crisis”, pledging to “place economic stability and confidence at the heart of this Government’s agenda”.
Eliminating the deficit over the next five years could require more than £30bn of fiscal tightening. This could mean spending cuts of up to 2 per cent, similar to the levels of austerity seen under the Coalition government in 2010.
Mr Hunt is set to unveil a £54bn package of tax hikes and spending cuts. Here’s what he could announce.
It has been reported that the Chancellor may decide to limit public sector pay increases to 2 per cent, making it almost certain that NHS workers, police and teachers will once again suffer a real-terms pay cut, given the elevated levels of inflation.
This comes after nurses voted to strike over pay this week. This move would be unpopular, but the Chancellor may argue it is necessary, as public sector pay is the Government’s largest outgoing.
Mr Hunt looks set to keep the state pension triple lock intact, and could also raise benefits in line with inflation. This could cost a combined £11bn next year, but would prevent a rebellion from some Tory MPs and avert at least some criticism that the decisions are unfair.
Members of Cabinet, including Michael Gove, have previously warned against going back on the manifesto commitment of maintaining the pensions “triple lock” as inflation soars past 11 per cent.
The Government is also aware that raising pensions in line with inflation, but not doing so with benefits, would draw criticism that it does not care about society’s most vulnerable people. But with Mr Hunt considering up to £35bn of “fiscal tightening”, any extra spending would leave more severe savings and higher tax hikes required elsewhere.
The Chancellor could announce freezes to various tax thresholds, including income and inheritance tax. As chancellor, Rishi Sunak froze income tax thresholds until April 2026, and there are suggestions that this freeze could be extended for another two years – taking it to April 2028 – in an effort to net the Treasury around £4bn a year.
Freezing the income tax thresholds means that as wages rise, more people will be dragged into paying the 40 per cent higher-rate income tax bracket, and many more will start paying income tax for the first time. The current tax thresholds are £12,570 (basic rate), £50,270 (higher rate), and £150,000 (additional rate).
The Chancellor is also set to target higher earners by reducing the threshold for the higher rate of tax from £150,000 to £125,000, costing them around £580 a year. This will affect some 250,000 people.
The rate at which families start paying inheritance tax has been frozen since 2009, and this freeze could be extended. Had it kept pace with inflation, the starting point at which you pay tax should be £460,000 rather than £325,000.
Inheritance tax is forecast to raise £6.7bn for the Treasury this year – up from £6bn in 2021 and £3.1bn a decade ago – caused both by the frozen threshold and the increase of property prices.
Currently, most families in the UK will not have to worry about inheritance tax. It is only applied to assets worth more than £325,000. If you are passing on a family home to direct dependants, such as children or grandchildren, you get a further allowance of £175,000.
Married couples, or those in a civil partnership, can combine their allowances. So families may only have to pay inheritance tax, which has a tax rate of 40 per cent, on estates worth more than £1m.
Mr Hunt has already confirmed that corporation tax will rise to 25 per cent in April next year. There is also increasing speculation that the Chancellor could cut the tax-free dividend allowance from £2,000 to £1,000, and raise the dividend tax rate by 1.25 percentage points.
Such a move would be a major blow for small businesses and entrepreneurs – a total of six million pay their tax through a limited company and they would be impacted by any change. A limited company owner with a turnover of £50,000 a year would pay £5,000 more in tax under this combination of corporation and dividend tax rises than an employed person on the same salary.
The current dividend tax rates are 8.75 per cent for basic rate taxpayers, 33.75 per cent for higher rate taxpayers, and 39.35 per cent for additional rate taxpayers, and more money will fall under this tax if the tax-free rate is reduced.
It has been reported that the Chancellor may extend cost of living support, including a second £650 grant for people on means-tested benefits, another £150 payment for people on disability benefits, and another £300 payment for pensioners.
The Government has neither confirmed or denied these reports.
All households will, however, still face a significant rise in average energy bills, as the Government increases the energy price guarantee from an average of £2,500 to as much as £3,100 from April.
It also appears unlikely that the £400 energy rebate, that is being given to all households, will be extended.
The national living wage could reportedly increase to about £10.40 – a rise of almost 10 per cent – from April 2023. The rates for younger people could increase by a similar proportion.
The Chancellor is reportedly considering allowing local authorities to impose larger rises in council tax next year to raise money for social care.
It means the average Band D council tax bill could surpass £2,000 for the first time ever – another major blow for households already struggling to keep up with soaring inflation and energy bills.
Under current rules, councils with social care responsibilities must trigger a referendum to increase council tax by more than 2.99 per cent.
The Daily Telegraph has reported that this could be changed to allow rises up to 5 per cent without a public vote.
In a money-making move, the Chancellor may extend the Energy Profits Levy – also referred to as the windfall tax – on oil and gas companies.
Already set at 65 per cent by Mr Sunak, when chancellor, it could now be increased to 70 per cent and extend it from 2025 to 2028.
Officials are also said to be looking at extending the levy beyond oil and gas companies to electricity generators.