Chancellor Jeremy Hunt has delivered his long-awaited Autumn Statement in the House of Commons.
Hunt began his speech by acknowledging that the UK is in a recession and that things will get worse before they improve.
Among the measures announced is a reduction in the threshold for when the highest earners start paying the top rate of tax, from £150,000 to £125,140. This means those earning £150,000 or more will pay just over £1,200 more a year.
There will be a windfall tax on the energy industry of 35 per cent from 1 January 2023, until March 2028. This is up from 25 per cent. There will also be a temporary levy of 45 per cent on electricity generators. It is expected these two measures will raise about £14 billion next year.
Hunt has confirmed the government departments can expect a squeeze and that they will have to make “tough decisions to deal with inflationary pressures in the next two years”. He did say that overall spending on public services will rise for the next five years after accounting for inflation.
According to the chancellor, the health budget will be protected. However, he has called on the NHS to “join all public services in tackling waste and inefficiency. He said: “That doesn’t mean asking people on the frontline to work harder, but rather asking challenging questions on how to reform all public services for the better.” Hunt has announced that the NHS budget will be increased by £3.3 billion in each of the next two years.
The chancellor included an extra £1.5bn for the Scottish government, 31.2bn for the Welsh government and £650m for the Northern Ireland executive to tackle pressures on schools and the NHS.
Hunt has also announced that it is not possible to maintain the 0.7 per cent target of overseas aid spending, with spending to remain at around 0.5 per cent.
Sizewell C nuclear plant will be going ahead, which will create 10,000 jobs and provide power for six million homes for 50 years. Northern Powerhouse rail and HS2 will also be going ahead with £600 billion of investment over the next five years.
There will be targeted support for the cost of living, with additional payments of £900 to be paid to those on means-tested benefits, £300 to pensioner households and £150 to people on disability benefits.
The National Living Wage is set to rise for over 23s from £9.50 an hour to £10.42 This is equivalent to a pay rise of £1,600 for a full-time worker.
Benefits will also rise in line with inflation. From next April, means-tested benefits including Universal Credit will rise in line with September’s inflation figure of 10.1 per cent.
Pensions will also rise in line with the 10.1 per cent inflation increase.
Rent rises in the social rented sector will be capped at 7 per cent in the next financial year.
Shadow chancellor Rachel Reeves delivered a reply, saying “Here we are at the end of 2022, three prime ministers, four chancellors and four budgets later.”
“And where do we find ourselves? In a worse place than we started the year.”
She said: “What does the chancellor have to offer today?”
“More of the same – with working people paying the price for his failure. The Chancellor should have come today to ask for forgiveness, at the very least he could’ve offered an apology.”